Comparisons between the UK’s Tier 2 visa and the USA’s H-1B visa.
With the UK being the top destination for foreign workers and the USA being a popular destination for IT outsourcing companies, it is no surprise that hundreds and thousands of applications are submitted for the UK’s Tier 2 visa and the USA’s H-1B visa every year.
The Tier 2 visa and the H-1B visa are work visas, which permit foreign workers to gain temporary employment, and both are highly sought.
The Tier 2 visa and the H1-B visa both consist of different visa categories for which a foreign worker can submit an application under.
Under the Tier 2 visa there are four categories: Tier 2 (General), Tier 2 (Intra-Company Transfer), Tier 2 (Sportsperson) and Tier 2 (Minister of Religion).
Whereas, only three categories exist under the H1-B visa: H1-B Speciality Occupations, H-1B2 Department of Defence Researcher and Development Project Worker, and H-1B3 Fashion Model.
The Tier 2 (General) category is open for any job position that was unable to be filled by a settled worker in the UK, the Tier 2 (Intra-Company Transfer) category are for “employees of multi-national companies, transferring between offices”[i], the Tier 2 (Sportsperson) category are for international coaches and sportspersons[ii], and the Tier 2 (Minister of Religion) category is applicable for those “who perform pastoral duties in recognised religions”[iii].
In terms of the categories within the H-1B visa category, the H-1B Speciality Occupations category is open for any position which requires a bachelor’s or master’s degree, the H-1B2 Department of Defence is specifically aimed for foreign workers who will be working on a cooperative research and development project or a co-production under a government-to-government agreement administered by the Department of Defence[iv], and the H-1B3 Fashion Model category is solely for fashion models.
Both visas require a different level of skill. The Tier 2 visa generally requires a ‘skilled’ foreign worker without further elaboration, with the exception under the Tier 2 (Sportsperson) visa which requires international recognition. The H-1B visa can be viewed as requiring a slightly higher level of skill. According to the Code of Federal Regulation, alongside a bachelor’s or master’s degree a speciality occupation requires “theoretical and practical application of a highly-specialised body of knowledge’[v]. The H-1B visa additionally requires ‘exceptional merit and ability’[vi] relating to the Department of Defence cooperative research and development project and ‘distinguished merit or ability’[vii] for the services of fashion modelling.
A possible reason for the differing skill level is that the H-1B visa is extremely popular within the IT, engineering, medical and science sector, which all require highly specialised skill and knowledge.
There is a substantial difference in the numerical limit of how many applications can be submitted yearly. Under the Tier 2 visa the limit is fixed to 20,700 whereas the H-1B visa consists of two caps with the total of both fixed to 85,000. The H-1B cap for applicants who have a bachelor’s degree is 65,000 and the H-1B cap for applicants who have a master’s degree is 20,000. “For the fifth consecutive year, the US Citizenship and Immigration Services reached the mandated 85,000 H-1B visa cap for fiscal year 2018 within 5 days of the pipeline opening”[viii]. Regarding, the Tier 2 visa, in 2016 there were 56,058 Tier 2 skilled work sponsored visa applications and 56,012 applications in 2015[ix].
In deciding which applications to approve, there is a stark difference. Whilst visa applications under the Tier 2 category are assessed, the H-1B visa is described as the ‘lottery visa’ as applications are approved on a total random basis and therefore not taking any thorough consideration into the actual skill and credentials of the foreign worker. This has been criticised by President Donald Trump, as only “the most-skilled and highest-paid applicants”[x] should be considered. The “Labor Department data shows that about 40 percent of the visas go to entry-level workers and another 40 percent go to people with limited experience and skills”[xi].
Resident Labour Market Test
A critical difference between both of the visas is that the H-1B visa does not require the employer to source for a suitable US employee before offering a role to a foreign worker. Under the Tier 2 visa UK employers are obligated to advertise a job position within the UK to find a suitable settled worker with the relevant skills and experience before extending the advertisement to foreign workers, unless an exemption applies which the UK employer can prove. This is known as the Resident Labour Market Test (UK employers must prove that a suitable settled worker in the UK is unavailable for the position they are seeking to assign to a foreign worker under the Tier 2 visa) which aims to protect the settled workforce by encouraging UK employers to train settled individuals in the UK. Whether the absence of a Resident Labour Market Test in the USA has a significant impact is a question to consider. Research conducted by The National Academies of Sciences, Engineering and Medicine in which the report assembled 14 leading economists, demographers and scholars who found little to no negative effects on overall wages and employment in the US of native-born workers in the longer term[xii]. However, as the USA is the prevailing destination for IT professionals, foreign workers with the H-1B visa have displaced many American technology workers from their jobs in recent years[xiii].
Under the Tier 2 visa the minimum salary threshold is £30,000 for skilled workers and £41,500 for multinational companies who are transferring a foreign worker into their UK branch. In comparison to the H-1B visa, the Department of Labour has an input in the salary threshold. The US employer is required to pay the higher wage out of the either the actual wage paid by the employer to workers with similar skills and qualifications, or the prevailing wage which is the “average wage paid to the similarly employed workers”.[xiv]
Immigration Skills Charge
Due to recent reforms to the Tier 2 visa an Immigration Skills Charge has been implemented which requires UK employers to pay a charge for hiring a foreign workers in skilled areas. The charge is £1,000 per foreign worker for every year they are employed, and a reduced rate of £364 per foreign worker for smaller companies and charities. The Migration Advisory Committee strongly supported the introduction of an Immigration Skills Charge to incentivise employers to reduce their reliance on migrant workers and to invest in training and upskilling UK workers[xv].
The H-1B visa does not include an Immigration Skills Charge. US employers are not obligated to pay any charge for the foreign workers they employ.
Labour Condition Application
US employers are required to make attestations in the form of a Labour Condition Application, which is not entirely required for UK employers. The application requires the employer to attest that certain labour requirements will be complied with: the foreign worker will be paid “no less than the wage paid to similarly qualified workers or, if greater, the prevailing wage”[xvi], “the employer will provide working conditions that will not adversely affect similarly employed workers”[xvii], “there is not a strike or lockout at the employer’s place of business”[xviii], and notice of the filing of the Labour Condition Application has been given[xix].
Fraud and abuse
A significant difference between both visas is the level of fraud and abuse of the visa programme. Whilst it does not appear that UK employers have used the Tier 2 visa programme for fraud, abuse or exploitation of foreign workers, however, little of this can be said for the H-1B visa.
A notorious case demonstrating this emerged in 2015 when “American IT employees at the Walt Disney Company were made to train their foreign replacements, who were hired on H-1B visas, before getting laid off”[xx]. Additionally, about “80% of H-1B workers are paid less than the median wage in their fields”[xxi] demonstrating that the H-1B visa has opened a doorway for cheap labour to replace American workers. This can be further shown by the exemption under the visa that allows US employers “to ignore the requirement about protecting American jobs as long as they pay foreign workers at least $60,000 a year, or hire a foreign worker with a master’s degree”[xxii]. Considering the average IT worker in the US earns far more than $60,000, the exemption makes it legal for US companies to displace American workers with cheaper H-1B workers[xxiii], which in turn exploits foreign workers.
President Donald Trump’s executive order to revamp the H-1B visa programme, calls on government departments “to take prompt action to crack down on fraud and abuse”[xxiv]. The US Citizenship and Immigration Services have now stated that they will take a more targeted approach when making site visits to the worksites of H-1B employees and determine whether H-1B employers are evading their obligation to make a good faith effort to recruit US workers[xxv]. It is said, “employers who abuse the H-1B visa programme negatively affect US workers, decreasing wages and job opportunities as they import foreign workers”[xxvi].
For a foreign worker to gain employment under either of the visas, an employer must sponsor the foreign worker. Under the Tier 2 visa, the foreign worker must have a valid Certificate of Sponsorship from an employer with a Tier 2 Sponsorship licence, and under the H-1B visa an employer must offer a job and petition for the foreign worker to have a H-1B visa.
Protecting the settled workforce
Giving priority and fair consideration to the settled workforce over foreign workers has been a clear requirement under both visas, despite the fact that the implementation method of this requirement is not the same. As already mentioned above, under the Tier 2 visa a Resident Labour Market Test, however, under the H-1B visa programme, US employers have an obligation only to act in good faith to recruit US workers. Whilst the UK government has advocated its encouragement for UK employers to train settled individuals in the UK instead of relying on foreign workers, President Donald Trump, who campaigned on an ‘American First’ ideology, required US companies to prioritise American job applicants – “no exception”[xxvii].
With the above similarity, it is arguable whether the requirement to protect the settled workforce is actually portrayed in reality. Although under the Tier 2 visa employers are required to test the labour market, “the test is based on attestation”[xxviii]; employers simply have to state that they have carried out the Resident Labour Market Test and were unable to find any suitable settled worker[xxix]. Few or no routine checks are made about the validity of this statement before the foreign worker is admitted[xxx]. Almost all of the enforcement of the Resident Labour Market Test occurs after the foreign worker has been admitted[xxxi]. Similarly, under the H-1B visa “enforcement appears to be very low”[xxxii] which in turn has resulted to fraud and abuse of the H-1B visa programme.
Both the Tier 2 visa and the H-1B visa explicitly require foreign workers to have a sound educational background, the minimum of a bachelor’s degree. Combining the level of skill both visas require it is not surprising that a degree is needed. However, under the H-1B visa a master’s degree may also be required and the bachelor’s degree or master’s degree must be directly related to the H-1B position, a requirement which is not asked for under the Tier 2 visa.
A dependent spouse and children are permitted to reside with the foreign worker under both visas, however, there are some differences.
Under the H-1B visa the foreign worker’s spouse and unmarried children under the age of 21 “may seek admission in the H-4 nonimmigrant classification”[xxxiii] and the dependent spouse can also seek employment by submitting Form I-765 for Employment Authorisation, “as long as the foreign worker has started the process of seeking employment-based lawful permanent residence status”[xxxiv].
Under the Tier 2 visa, the foreign worker’s spouse is also permitted to enter the UK along with any children who are under the age of 18[xxxv]. The foreign worker is required to show that the dependants can be supported whilst they are in the UK. Dependants must have £630 available to them regardless of whether they apply to stay with the foreign worker together or separately[xxxvi]. This is in addition to the £945 which the foreign worker must show that they have as evidence that they can support themselves[xxxvii] (a requirement which is not sought for under the H-1B visa).
Both visas permit the foreign employee to apply for permanent residency. A foreign employee under the H-1B visa, after having stayed and worked in the US for a period of 6 years, the foreign worker can either return back to their native country or apply for permanent residency, which is also known as the Green Card, and begin the H-1B to the Green Card process[xxxviii]. Only the sponsoring employer can petition for an employee to change from the H-1B status to the Green Card status[xxxix]. A more restricted approach is taken under the Tier 2 visa, in which a foreign worker earning £35,000 or more is able to qualify for permanent residence under the Tier 2 (General), Tier 2 (Sportsperson) and Tier 2 (Ministry of Religion) visas. The UK Prime Minister Theresa May defended this requirement as a way to help reduce the number of non-EU nationals and their dependents that are granted residence each year from 60,000 to 20,000[xl].
[i] ‘Recruiting under the Tier 2 visa UK’, (DavidsonMorris Solicitors, Lexology, 18th June 2016), < https://www.lexology.com/library/detail.aspx?g=e8d410a5-9a12-4245-8401-31139d17053e>, accessed: 1st December 2017
[iv] US Citizenship and Immigration Services, ‘H-1B Speciality Occupations, DOD Cooperative Research and Development Project Workers, and Fashion Models’, < https://www.uscis.gov/working-united-states/temporary-workers/h-1b-specialty-occupations-dod-cooperative-research-and-development-project-workers-and-fashion-models>, accessed 1st December 2017
[v] Jon Velie, ‘H-1B Visa: What is a Speciality Occupation?’, (OnlineVisas), <https://onlinevisas.com/usa/h1b-visa-specialty-occupation-definition/>, accessed: 1st December 2017
[vi] US Citizenship and Immigration Services, ‘H-1B Speciality Occupations, DOD Cooperative Research and Development Project Workers, and Fashion Models’, < https://www.uscis.gov/working-united-states/temporary-workers/h-1b-specialty-occupations-dod-cooperative-research-and-development-project-workers-and-fashion-models>, accessed: 1st December 2017
[viii] Nikhila Natarajan, ‘H1B visa applications reach 85,000 cap in 4 days – all you need to know’, (First Post, 8th April 2017),< http://www.firstpost.com/world/h1b-visa-applications-reach-85000-cap-in-4-days-all-you-need-to-know-3374166.html>, accessed: 1st December 2017
[ix] National Statistics Work, (23 February 2017) < https://www.gov.uk/government/publications/immigration-statistics-october-to-december-2016/work>, accessed: 1st December 2017
[x] Nikhila Natarajan, ‘Trump signs executive order on H1B visa review, says lottery system is all wrong’, (First Post, 19th April 2017), <http://www.firstpost.com/world/trump-signs-executive-order-on-h1b-visa-review-says-lottery-system-is-all-wrong-3391920.html>, accessed: 1st December 2017
[xi] Vindu Goel, ‘How Trump’s ‘Hire American’ Order May Affect Tech Worker Visas’, (The New York Times, 18th April 2017) https://www.nytimes.com/2017/04/18/technology/h1b-visa-facts-tech-worker.html>, accessed: 2nd December 2017
[xii] Julia Preston, ‘Immigrants Aren’t Taking Americans’ Jobs, New Study Finds’, (The New York Times, 21st September 2016), <https://www.nytimes.com/2016/09/22/us/immigrants-arent-taking-americans-jobs-new-study-finds.html>, accessed: 2nd December 2017
[xv] James Brokenshire, ‘Tier 2 (Skilled Workers): Written Statement – HCWS660’, (24th March 2016), < https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2016-03-24/HCWS660/>, accessed: 1st December 2017
[xvi] US Citizenship and Immigration Services, ‘H-1B Speciality Occupations, DOD Cooperative Research and Development Project Workers, and Fashion Models’, < https://www.uscis.gov/working-united-states/temporary-workers/h-1b-specialty-occupations-dod-cooperative-research-and-development-project-workers-and-fashion-models>, accessed: 2nd December 2017
[xx] Cherlynn Low, ‘US cracks down on the tec industry’s go-to work visa’, (4th March 2017), <https://www.engadget.com/2017/04/03/us-visa-program-cracks-down-on-employers/>, accessed: 2nd December 2017
[xxi] David Smith, ‘Donald Trump to overhaul H-1B visa program that admits foreign workers’, (The Guardian, 18th April 2017), < https://www.theguardian.com/us-news/2017/apr/17/donald-trump-temporary-worker-h1b-visa-executive-order>, accessed: 2nd December 2017
[xxii] Alexia Fernamdez Campbell, ‘There’s a Clear Way to Fix the H-1B Visa Program’, (The Atlantic, 6th December 2016), < https://www.theatlantic.com/business/archive/2016/12/fixing-h-1b-visa-loophole/509639/>, accessed: 2nd December 2017
[xxiv] David Smith, ‘Donald Trump to overhaul H-1B visa program that admits foreign workers’, (The Guardian, 18th April 2017), < https://www.theguardian.com/us-news/2017/apr/17/donald-trump-temporary-worker-h1b-visa-executive-order>, accessed: 3rd December 2017
[xxvi] US Citizenship and Immigration Services, ‘Combating Fraud and Abuse in the H-1B Visa Program’, <https://www.uscis.gov/news/news-releases/putting-american-workers-first-uscis-announces-further-measures-detect-h-1b-visa-fraud-and-abuse>, accessed: 3rd December 2017
[xxvii] Tracy Jan, ‘This one group gets 70 percent of high-skilled foreign worker visas’, (The Washington Post, 3rd April), <https://www.washingtonpost.com/news/wonk/wp/2017/04/03/this-one-group-gets-70-percent-of-high-skilled-foreign-worker-visas/?utm_term=.d48a32a036dc>, accessed: 3rd December 2017
[xxviii] Cathryn Costello and Mark Freedland, ‘Migrants at Work: Immigration and Vulnerability in Labour Law’, (Oxford University Press), page 73
[xxxiii] US Citizenship and Immigration Services, ‘H-1B Speciality Occupations, DOD Cooperative Research and Development Project Workers, and Fashion Models’, < https://www.uscis.gov/working-united-states/temporary-workers/h-1b-specialty-occupations-dod-cooperative-research-and-development-project-workers-and-fashion-models>, accessed: 3rd December 2017
[xxxviii] ‘H1B to Green Card Process’, <https://www.path2usa.com/h1b-to-green-card-process>, accessed: 3rd December 2017
[xl] Daniel Waldron and Sanwar Ali, ‘UK Tier 2 Visa Immigrants must earn £35,000 to settle from April 2016’, (Work Permit, 7th July 2015), <http://workpermit.com/news/uk-tier-2-visa-immigrants-must-earn-£35000-settle-april-2016-20150707>, accessed: 2nd December 2017