CW extension: What it does and what it doesn’t; and the H-1B prevailing wage crisis

On May 28, 2014, we received a news release from Congressman Gregorio Sablan’s office that the long awaited decision regarding the extension of the CW program has been made and that the CW-1 transition period would be extended for an additional five years, to Dec. 31, 2019. The official announcement by U.S. Department of Labor Secretary Thomas E. Perez was made and published in the Federal Register on June 3, 2014.

This was very welcome news to most of the people in the CNMI, especially employers and foreign workers. As the analysis in the Federal Register pointed out: “According to the 2010 Island Areas Census…the CNMI population was 53,883, with 24,168 U.S. citizens and 29,715 non-citizens. The total number of U.S. citizens age 16 and over was 13,016. The [U.S. Labor] Department’s calculation, using the 2010 Island Areas census, found that 24 percent of U.S. workers residing in the CNMI were unemployed. …The total number of unemployed U.S. workers in the CNMI in 2010 amounted to only about 20 percent of the 14,958 foreign workers. Even if all the U.S. workers in the labor force were employed, more than 11,000 jobs would still need to be filled by foreign workers.” “Secretary of Labor Extends the Transition Period of the Commonwealth of the Northern Mariana Islands-Only Transitional Worker Program,” 79 FR 31988 (June 3, 2014) (emphasis added). These numbers may be somewhat inaccurate for a number of reasons: it is now four years later; the workforce calculation is based on total population over age 16 and does not subtract students, retired people, and those who never held a salaried job. Nevertheless, the trend is clear: the CNMI simply does not have the population to support the economy we have, much less the economy we would like to have. This is a matter of numbers, not politics. Do the math.

That being said, let us look to see what the extension affects and what it doesn’t.

• What’s clear: the CW program continues. The CW program will continue, as we have come to know it, for another five years.

• Spouses and children under 18 of CW-1 workers will continue to be eligible for CW-2 status for the same duration as the CW-1 worker. CW workers, and their spouses, who have U.S. citizen children between the ages of 16 and 21 will be eligible to apply for green cards as those children reach age 21 before the end of the extended CW program.

• Legitimate CNMI businesses will continue to be able to hire foreign workers to meet their current and projected future needs. Employers will need to comply with the same regulations and procedures as before. They will need to post JVA’s; give preference in hiring to U.S. qualified workers, pay filing fees, and file Forms I-129CW (or other Forms I-129, for other nonimmigrant visas such as H-1B).

• Unfortunately, those employers who renewed their CW workers in the last few months, and received CW status only until Dec. 31, 2014, will need to renew those workers again, with the same fees and procedures, with no credit or adjustment made in consideration of the prior filing.

• The CRNA still mandates the reduction of foreign workers to zero by the end of the transition period. The federal government has been fairly generous in this respect up until now and has not cut the number of available CW slots below the approved applications for the prior year. But policies are political and subject to change. However, we really have no way of knowing how this aspect of the CW program will play out under a new presidential administration.

• Please also note that this is the first five-year extension. The CNRA, which terminated the CNMI’s immigration authority, authorizes additional five-year extensions under the same parameters as this first one. In addition, the CNMI-related sections of the immigration bill now pending in Congress would also extend the CW program to the end of 2019, but then cut it off with no renewal. We think that is a bad, politically-driven decision in a bill we otherwise fully support, but the language is there and the provision was favorably reported by the House committee that recently considered it. So that is one more unknown, subject to the winds of political change.

• What’s not clear: Administration of other nonimmigrant visa categories. At first, the U.S. DOL press release appeared clear, and well thought out. And it is, as far as it goes. But then we noticed that the U.S. DOL press release is written entirely in terms of the CW program. There is no mention of the possibility of extending the E-2C CNMI-only investor program; no mention whether asylum will become available in the CNMI on Jan. 1, 2015; and the only mention of H-1B temporary workers is to note that most CW positions do not qualify because they are specialty occupations, with nothing said about the CNMI’s current exemption from the nationwide numerical cap on H-1B (and H-2) visas.

So we went back to the CNRA. The CNRA amends the Covenant to insert new language, including the following definition of the terms “transition period” and “transition program,” as part of the law on application of the Immigration and Nationality Act to the CNMI:

TRANSITION PERIOD – There shall be a transition period beginning on [Nov. 28, 2009] and ending on Dec. 31, 2014, except as provided in subsections (b) [exemption from the numerical cap on H-1 and H-2 workers] and (d) [the CW program], during which the Secretary of Homeland Security, in consultation with the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of the Interior, shall establish, administer, and enforce a transition program to regulate immigration to the Commonwealth, as provided in this section (hereafter referred to as the ‘transition program’).

CNRA, section 702(a).

The CNRA does not specify that the terms “transition period” and “transition program” apply only to CW-1 and CW-2. However, subsection (d)(5)(A) of the new Covenant language tasks the DHS Secretary, in consultation with the usual departmental suspects plus the CNMI governor, to “ascertain the current and anticipated labor needs of the Commonwealth and determine whether an extension of up to 5 years of the provisions of this subsection is necessary to ensure an adequate number of workers will be available for legitimate business in the Commonwealth.” (Emphasis added.)

That phrase, “of the provisions of this subsection”—a subsection that deals only with the CW program—suggests that only the CW program has been extended. But the answer is not so simple and clear-cut, and we hope that USCIS and USDOL will provide guidance on the following issues:

• The exception to the asylum law. The CNRA provides that the asylum provisions of the INA shall not apply during the transition period to persons physically present in the Commonwealth or arriving in the Commonwealth…” That seems pretty clear, but the CNRA elsewhere states that the termination date of the exception is “Dec. 31, 2013.” 2013, not 2014. On Oct. 28, 2009, DHS published “conforming regulations” to implement provisions of the CNRA in conjunction with existing law, and concluded that the 2013 date was a “technical oversight,” and that the DHS Secretary and the U.S. Attorney General concluded “that asylum will be unavailable to persons physically present in or arriving in the CNMI during the entire time of the transition period.” Unclear: guidance needed.

• The H-1 visa cap exemption. Subsection 6(b) of the language added to the Covenant by the CNRA provides that the CNMI is not subject to the nationwide numerical cap on H-1 and H-2 workers. This is particularly important because if the CNMI becomes subject to the H-1B cap, it is doubtful we will be able to secure specialty occupation workers. If the definition of the transition period means that the transition period will end Dec. 31, 2014, except for subsections dealing with the H numerical cap and the CW program, that fact should be clarified by USCIS. USCIS should also clarify whether it considers that the apparent extension of the H-1B cap exemption stands on its own, or whether it needs an administrative extension, like the CW program, or, possibly, U.S. congressional action.

• The E-2C program. The CNRA made the E-2C CNMI-only investor status available to existing holders of CNMI investor visas, “during the transition period.” There is no discussion of extension, and we have generally assumed—and advised—that the E-2C program will die at the end of the year. That is particularly hard on mid-level investors who may not meet the qualifications for an EB-5 immigrant investor visa, but who nonetheless have legitimate businesses that contribute to the CNMI’s economy. Extension of this program needs clarification, and consideration.

• The H-1B prevailing wage crisis. We generally avoid the term “crisis,” but that’s what we have here. Even if the CNMI becomes subject to the numerical caps on H-1 visas, we will still need these technically trained, specialty occupation employees. Under the current rules, an application cannot be filed with USCIS until U.S. DOL approves the wage level offered to the worker. If there is a local prevailing wage survey, whether done by private organizations or government agencies, then U.S. DOL will usually accept that survey as authoritative. If not, then U.S. DOL looks either to a neighboring jurisdiction—Guam in our case—or instead applies the national averages.

In October 2011, the Saipan Chamber of Commerce (of which we are members) stepped up to the plate and, with the help of a small grant, provided a prevailing wage survey that was accepted by U.S. DOL. That was followed in late April 2012 by a much more detailed prevailing wage survey, published by the CNMI Department of Commerce.

Prevailing wage surveys are good for two years and, if not updated, are no longer credited by U.S. DOL. That is what has happened to the CNMI. We are starting to get prevailing wage determinations that state that the survey on which we rely is outdated, and which then apply the national average wage for the position. In one case, that resulted in an increase of $20,000 per year—from $45,000 to $65,000—which may be beyond the employer’s resources. (We are reapplying, using the Guam figures, which are still accepted by U.S. DOL.)

This situation could be cured easily, by doing another survey like the Chamber’s 2011 survey, which took a couple of months and was readily accepted by U.S. DOL. We contacted the Chamber nearly a year ago, and were told that the Chamber was seeking a grant. There has been no grant, and no new survey.

We understand that the amount of money needed to update the Chamber’s prevailing wage survey is relatively small, in the range of $21,000 to $22,000. We think it’s time—past time—for the Chamber to seek donations from members and from non-member employers who benefited from the 2011 survey.

This is an urgent employment issue, which affects all of the CNMI, not just the businesses that employ H-1B specialty workers. These workers fill the critical technical positions that allow both government and private businesses to keep our islands, and our economy, running. Consider also that the bulk of H-1B positions were applied for, and backdated to, the end of November 2011, when all the umbrella permits expired. H-1B visas are good for three years, and then must be renewed. It is now time to renew all of those positions, so that critical H-1B employees remain employed. It’s time for a new prevailing wage survey, as soon as possible.

You can find the U.S. DOL press release at http://tinyurl.com/krgsgx7, and the actual Federal Registrar Notice at http://tinyurl.com/ohcc3kq. USCIS has published what we hope is only a preliminary fact sheet, at http://tinyurl.com/q42xb7x.

The information contained in this column is intended as general information only, and not as individual legal advice. Readers should obtain professional legal advice before taking action with respect to their individual situations. Readers may submit questions regarding federalization or immigration issues to the authors by email to lexmarianas@pticom.com. Readers may also e-mail written questions through the Saipan Tribune at editor@saipantribune.com.