Sept. 15 2017 05:27 PM

This past May, the Department of Homeland Security (DHS) held a conference call to gather comments about the H-2B visa program from anyone affected by it. This was because DHS Secretary John Kelly had been empowered by Congress to temporarily enlarge the program by up to 70,000 more visas.

First, some background. H-2B is a temporary work visa program which allows foreign workers to apply for low-skill, entry-level jobs. You’ll often see it referred to as the ‘nonagricultural visa program,’ to avoid confusion with the H-2A program, which does the same thing for the agricultural industry. Both are seasonal programs, and companies can hire employees to work a maximum of ten months of the year. Neither is an immigration program, and there is no path to citizenship through them.

H-2B is intended to provide an outlet for businesses who can’t find Americans willing to work for them. It is not intended to freeze Americans out of working in those industries if they want to. In order to accomplish that goal, the program puts a cap on the number of work visas which can be approved. The cap is currently set at 33,000 visas, starting between April 1st and September 30th, and another 33,000 for the rest of the year.

According to the Economic Policy Institute, the green industry accounts for roughly 40 percent of H-2B jobs, so when the DHS held its 90-minute conference call for comments, I sat in on the whole thing. It was an enlightening experience. Callers from across the country painted very different pictures of what the program is, and although the discussion was civil, it was clear that emotions ran high on both sides.

To the small business owners who use it and called in, H-2B is a saving grace. It keeps their businesses afloat when local unemployment levels are well below the national average, and year-round recruitment efforts fail. Said Allison Medrano, owner of CLIP Lawn Care in Frederick, Maryland, “I’ve almost cried about ten times, listening to people on this call. We’ve been in business for 29 years, and we’re looking at shutting our business down. We’ve already had to let half of our customers go.”

To H-2B opponents, the program is a ready source of cheap labor that undercuts American workers and artificially suppresses wages. Rosemary Jenks, director of government relations for Numbers USA, a non-profit that advocates for reduced immigration, expressed frustration with the program.

“We have the lowest labor force participation rates that we have had since the 1970s,” she said. “Among low-skilled, working-age Americans, the employment rate is about 55 percent, so it would be unconscionable to exceed the H-2B cap under these circumstances.”

So how did we get here? The history of the visa program is an article unto itself, but the program seems to have gone through some significant changes in recent years. Whether or not you’re thinking of using the program, it behooves you to know at least a little bit about how it works, the state it’s in now, and why it’s so polarizing. This month we’re going to cover that ground, and take the uncertainty out of H-2B.

According to the DOL’s Employment and Training Administration (ETA), the application process looks something like this. First, you determine your local prevailing wage from the National Prevailing Wage Center (NPWC), using ETA form 9141. Then, you file with the State Workforce Agency (SWA), specifying your work period, location, how many positions you need filled, and what the work is.

You must also advertise for the positions, with at least two print advertisements including all relevant information, one of which must run on a Sunday. With those efforts made, you can then file an H-2B application, using the wage information from the NPWC, or a private wage survey. Provided the application is in order and the cap has not been reached, you will receive as many workers as you request, minus however many Americans you hired as a result of your advertising efforts.

If that process seems confusing or complicated, that’s because it is. Policywise, it is impossible to set a bar for hiring Americans that is high enough to prove that all other options have been exhausted, while still allowing for the finite recruitment budgets of small business owners. So the H-2B program doesn’t really try. Instead, it discourages abuse by making sure that visa workers are always the more expensive option.

That’s why, for instance, employers are required to pay H-2B employees a prevailing wage. Once they have worked half the season, H-2B employees must also be reimbursed for all their travel costs to and from the country, including any meals and hotel rooms.

According to Marty Goguen, owner of Morin’s Landscape in Hollis, New Hampshire, these checks are working as intended. “The H-2B program is not cheap; it is not a vehicle to grow our profits,” he said. “If there were a way to hire local American workers, we would do that in a heartbeat, and then we would see some growth in our profits. We have a 2.5 percent unemployment rate in New Hampshire, and we cannot get workers.”

So if the program is working as intended, what’s all the hubbub about?

Some of it can be traced back to changes to the program which have been made in recent years, the most major of which was in 2015. That was when Congress approved a measure that exempted any H-2B worker approved in the previous three years from counting towards the cap.

The DHS and DOL received between two and four times the number of applications they normally do, but without increased funding to meet the new demand. Budgets for H-2B auditing also did not scale to meet the influx. About 136,000 applications were approved, but delays in the process were systemic and horrendous, and many employees arrived weeks or even months after their original start dates.

Because it was a mess, Congress elected not to re-up the exemption for this year, and the cap returned to 66,000. However, the number of applications stayed high, and more than 82,000 applications were submitted for the summer season alone. The overapplication to the program could be due to the exemption encouraging more applicants (those who applied and were accepted are more likely to reapply), or it could just be the nationwide labor shortage, but the results are the same.

Groups like the Southern Poverty Law Center (SPLC), Friends of Farmworkers, the Center for Immigration Studies (CIS) and labor unions are concerned by any rise in the number of H- 2B applications. They argue that the program is deeply flawed, and needs to be significantly overhauled, if not dissolved entirely.

There are a number of reasons that these groups oppose the program, but they center on some of the negative effects it can have on a large scale, and the ways it can be abused. “Employers want these workers because they are effectively indentured,” said David North with CIS. “If H-2B workers lose their jobs, they face deportation. That makes them work hard and work scared.”

Given that there is no path to citizenship through the program, why should they fear deportation? First off, if it’s less than halfway through the season, they will not be reimbursed for their travel costs. What’s worse, some H-2B recruitment companies out there are corrupt, and they have countless opportunities to abuse and indenture visa applicants with high fees, and control over their living conditions.

Take the case of International Labor Management Corporation, a small H-2B recruitment business from Vass, North Carolina. They were indicted by a federal grand jury in 2014 on 41 different charges, centered around a conspiracy to defraud the federal government. The charge sheet was 57 pages long, and the owner pled guilty to everything from collecting illegal fees to instructing employers on how to avoid hiring American.

There are some bad apples among H-2B employers as well. In 2015, Culpepper Enterprises, a landscape company in Mississippi, was charged with abusing the program to meet its lucrative Department of Transportation contracts. The company paid its workers the federal minimum wage, well below the prevailing wage it had listed, and illegally deducted the cost of its overpriced housing and protective equipment from the workers’ wages.

It doesn’t end there, either. Case records of H-2B abuses include employers threatening to rip up visas if workers complain, and employers colluding with local police to get their workers pulled over if they try to go into town, to trap them onsite. In the case of Signal International, conditions were so bad that, in 2006, one of its workers tried to commit suicide. The company filed bankruptcy two years ago, to fund a $20 million settlement after the workers successfully filed suit.

It is important to remember that in all of these cases, laws were flagrantly ignored. As written, the H-2B program sets guidelines for worker treatment that are equal to, if not better than, those afforded to American workers. It is even more important to remember that these are not representative of H-2B employers, and that many owners treat all of their employees with respect, and even warmth.

Certainly, the ones who called in to comment were adamant that their own employees were not coerced. “We usually get two returning H-2B workers, and they’re paid well above the prevailing wage,” said Christina Rodelo, of A Perfect Lawn, LLC, in Morganville, New Jersey. “We take care of them; we pay for their airline tickets—the whole nine yards. We’ve really gotten to know them; they’re very kind, and we have a great relationship with them. So I take a little offense to callers saying they’re exploited.”

As Goguen put it, “We have kept the same people coming back to us for the last 20 years. They bring their brothers; they bring their kids whenever we have additional positions open. Exploited workers wouldn’t do that.”

The back-and-forth between pragmatic small business owners facing possible bankruptcy on the one hand, and economic policy experts trying to prevent wage suppression and worker exploitation on the other, reflects the uncertainties on both sides. H-2B employers see their immediate issues, but they may be ignorant about the program’s vulnerabilities. Policy gurus, on the other hand, see the historic issues, but lack the comprehensive statistics that would prove or disprove whether the program’s problems are systemic. They see the program’s evils, but they don’t have a day-to-day window into the good it does.

On top of that, as we hinted at earlier, the program has become something of a political football. After the job was foisted upon him, Secretary Kelly expressed to the media that he did not want to be in charge of this decision, and that Congress should not have passed the buck. Meanwhile, Republican Senator Thom Tillis put a hold on President Trump’s pick for heading up USCIS, pressuring Kelly to approve the extra visas.

These are just the latest salvos in a political back-and-forth that goes back decades, to the program’s inception. At the time of this writing, Kelly has approved 15,000 more visas, but requires new applicants to attest that they would suffer ‘permanent and severe financial losses’ if not approved.

Economists could likely spend the next hundred years arguing back and forth about whether H-2B is good for employers, employees, or American citizens, and never come to a conclusion. Without the wisdom of Solomon, all we can be certain of is whether or not it can be helpful for our own businesses.

When you’re making that determination for yourself, consider the lengths that other business owners are willing to go to, in an attempt to avoid relying on the program. Jane Hey of Doctors Lawn and Landscape in Lake of the Ozarks, Missouri, described hiking wages, offering incentive packages, and advertising in a 150-mile radius, with little results. “The people that have responded are usually with us for an average of just two or three days,” she said. “Then they’ll state that the work is too hard, or that they’ve found a permanent position elsewhere.”

Other callers recruited year-round, instituted internship programs, or offered education and advancement opportunities. Even though all of these efforts are ideal for promoting both their companies and the industry as a whole, for these folks, it all fell short. They reported hiring parolees or heroin addicts, and having newly-hired employees quit midweek, or even midday. Trying to fill summer crews in regions where the unemployment rate is three percent or lower is like trying to eat soup with a fork.

So if the difficulties these owners describe sound all too familiar, the H- 2B program may be a lifeline for your business. If, on the other hand, your own recruitment efforts are not quite so intense, and you decide that the expense of H-2B is worth avoiding the time and energy lost hunting for new hires, do everyone a favor. Mind your P’s and Q’s, do your homework, and make sure that you follow the program’s guidelines closely. Using the H- 2B program responsibly isn’t just good for our industry’s reputation; for some small businesses, it’s a matter of survival.