On June 15, 2012, President Barack Obama stepped into the Rose Garden and announced a bold and sweeping policy change, affecting the status of young undocumented individuals in the United States, a policy that would defer any deportation action and allow for employment authorization to an undocumented person who had entered the United States before her 16th birthday and had resided in this country for five consecutive years, as of June 15, 2012.1
It is estimated that this announcement could impact up to 1.3 million individuals. It was so controversial a move that 10 days later, Justice Antonin Scalia, when reading from his dissent in Arizona v. United States, departed from established judicial protocol to comment on the president's decision. He describes "[a] Federal Government that does not want to enforce the immigration laws as written and leaves the States' borders unprotected against immigrants whom those laws would exclude."2
No such drama is associated with the administration's attempts to further and promote pro-business immigration initiatives. In fact, whereas the administration is taking giant leaps with regard to the status of undocumented aliens in the United States, its efforts on behalf of the business community could best be described as timid and tentative small steps. Ironically, most of these reforms seek to fix problems in the system that result from the Department of Homeland Security's (DHS) own internal policy guidance, rather than restrictions enacted by Congress, and they have had relatively little impact.
The additional irony is that pro-business initiatives, particularly those that encourage foreign entrepreneurs and would facilitate job creation, have support on both sides of the aisle in Congress, though there are many who won't admit it publicly. However, the political deadlock in Congress has made it next to impossible to enact meaningful amendments to immigration law that would encourage foreign investment in the U.S. economy and allow U.S. businesses to sharpen their global edge by attracting and retaining foreign talent.
On Jan. 31, 2011, the White House issued a press release launching "Startup America."3 Its goal was to promote
high-growth entrepreneurship across the country with new initiatives to help encourage private sector investment in job-creating startups and small firms, accelerate research, and address barriers to success for entrepreneurs and small businesses.
On Aug. 2, 2011, marking the six-month anniversary of Startup America, DHS Secretary Janet Napolitano reported on the U.S. Citizenship and Immigration Services' plans to promote startup enterprises and spur job creation.4 Napolitano indicated that "today's announcements will help our nation fully realize the potential of existing Immigration laws." The department outlined a series of policy, operational and outreach efforts that included clarifying entrepreneurs' eligibility for certain visa classifications, revamping of the EB-5 Investor Visa Program, expanding Premium Processing Program, engaging entrepreneurs to stream-line the visa process and reaching out to the world's best and brightest science and technology graduates.
Similar to the "off-the-hill" approach it has taken to the problem of undocumented aliens, in order to implement Startup America, the Obama administration has introduced a number of extra-legislative, executive initiatives to improve the business immigration landscape in a manner that will encourage foreign investment of money and talent in the U.S. economy.
We must review the most significant initiatives that have been proposed and implemented and ask what in fact has actually been accomplished. The answer at this point may still be very little.
Sole and Small Businesses
We are repeatedly told by our politicians and economists that small businesses are the backbone of the U.S. economy and the incubators of U.S. innovation. And yet, despite the Napolitano's August pronouncement that Startup America will "help our nation fully realize the potential of existing Immigration laws," those very existing immigration laws continue to make it extremely difficult for a foreign national to start a small business in the United States or for an existing small business to hire foreign talent. This is largely because the DHS and its immigration benefits adjudications armU.S. Citizenship and Immigration Services (USCIS)operate with a rebuttable presumption that petitions by small and new businesses are fraudulent, and a petitioning small business must overcome that presumption in order to succeed in its petition.5
DHS exacerbated the difficulty for a petitioning small business when it issued a memorandum in January 20106 further limiting H-1B visas to situations where the employment satisfies a heightened test of the employer-employee relationship.7 As part of that memorandum, which was issued as guidance to USCIS adjudicators, USCIS all but completely foreclosed the possibility of a sole proprietor obtaining an H-1B visa to establish a business in the United States because the small business owner does not report to an employer.
In response to a public outcry that challenged the appropriateness of such a limitation at a time when the United States was struggling to attract foreign investments, USCIS issued a special FAQ in March 2012 to dull the deterrent impact of this memorandum on would-be foreign small business owners.8 USCIS clarified that small business owners may still apply for H-1B visas when the owner reports to someone else representing the entity, such as a Board of Directors. At the end of the day, however, these clarifications apply to very few small businesses, and the FAQ has had a limited impact on the damage done by the January 2010 memorandum.