Hiring High-Skilled Foreign Nationals | Business Roundtable

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The State of ImmigrationHiring High-Skilled Foreign Nationals

The ability to hire high-skilled foreign nationals allows employers to access skills not readily available domestically (a knowledge of other markets, for example) and to combine the skills with those of native-born workers. In the United States, generally the only practical way to hire a high-skilled foreign national long term is on an H-1B visa. The shortcomings of the H-1B category have concerned U.S. employers for years.

The ability to hire high-skilled foreign nationals allows employers to access skills not readily available domestically (a knowledge of other markets, for example) and to combine the skills with those of native-born workers. In the United States, generally the only practical way to hire a high-skilled foreign national long term is on an H-1B visa. The shortcomings of the H-1B category have concerned U.S. employers for years.

The low quota on H-1B visas is considered a significant obstacle to attracting and retaining highly educated workers in the United States, including international students who graduate from U.S. universities. In every year since FY 2004, employers have exhausted the annual quota on H-1B visas before the fiscal year has ended (both the 65,000 annual standard quota and the 20,000 exemption from the quota for graduate students from U.S. universities). In April 2014, employers sent the U.S. Citizenship and Immigration Services (USCIS) 172,500 H-1B applications — nearly 90,000 more than the quota and exemption — for workers who would start jobs on October 1, 2014, the start of FY 2015.13 Those unable to gain an H-1B visa generally could work only for a U.S. company outside of the United States or for a foreign competitor overseas.14 Absent a legislative fix, U.S. employers who are prevented from hiring these skilled professionals and researchers due to the low annual quotas will no doubt remain frustrated.

Germany
Other nations have better policies for attracting and retaining high-skilled foreign nationals. Because Germany is a member of the European Union (EU), its labor market is open to the approximately 500 million EU citizens who can work in Germany at lower-skilled or high-skilled jobs without the need for any immigration paperwork. That distinction is important when comparing Germany’s immigration system to those of other nations not in the EU.

“The way to understand the EU is that Europe is like the states of the United States,” said French immigration attorney Karl Waheed. “Within the EU there are no border controls, and no work permits are needed for any citizen of an EU nation to work in another EU nation.”15 The right of free movement is a cornerstone of the EU, and its policies are clearly stated: “As an EU national, you’re entitled to work — for an employer or as a self-employed person — in any EU country without needing a work permit.”16 Family has a right to live with the EU national in that new country as long as he or she works there. In addition, “If you have lived legally in another EU country for five years continuously — as an employee, a pensioner or a self-employed person — you automatically acquire the right of permanent residence there.”17

The equivalent of the H-1B visa category in Germany for high-skilled foreign nationals is the D visa, which has no numerical limit and thereby avoids the key problem plaguing the H-1B visas in the United States. “Very seldom do we see a denial,” said Lucy Jacobs, an associate at Palladium Mobility Group in Dresden. “If someone is denied it is likely they have either fake credentials or authorities consider them a national security threat. Highly skilled people are very rarely turned down for work visas in Germany. The country needs highly qualified people.”18 According to Jacobs the process is sufficiently clear that some employers do not even use attorneys when filing cases, although most still do. All applications and accompanying materials can be filed online.19

An individual may also be eligible for a Blue Card issued by the EU, which greatly facilitates the process. The Blue Card has the advantage of avoiding the need to file with German immigration authorities. An individual earning a sufficient salary level (at least 1.5 times the country’s average salary) with a German university degree (or one recognized in Germany) and a local work contract may be eligible for a Blue Card. France and more than 20 other EU nations issue Blue Cards. (The U.K. and Switzerland do not issue Blue Cards.)

Hong Kong
Hong Kong is known for its laissez-faire economic policies, and its immigration policies are consistent with that reputation. No annual quota exists for employers hiring skilled foreign nationals on temporary visas in Hong Kong, and only about 2 to 3 percent of cases are denied, according to immigration attorneys. Employers are not required to advertise or pay a specific salary when petitioning for a skilled foreign national under the General Employment Policy. However, in practice, a case could be denied if the individual does not possess the relevant education or experience or if, in the eyes of the Immigration Department, the position is not sufficiently specialized or the salary is not “broadly commensurate with the prevailing market rate of Hong Kong.”20 In such cases, advertising prior to filing may be a good idea to show the Hong Kong labor market is unable to fill the relevant vacancy, according to Christopher Hooley, partner at Oldham, Li & Nie.21

An additional way Hong Kong admits foreign nationals is via a points-based system, within a quota, aimed at attracting high-skilled, talented people from Mainland China or overseas. The system is not directly tied to employers since successful applicants are not required to secure employment before taking up residence in Hong Kong. 

Australia
Australia has no numerical quotas for the 457 visa, the country’s equivalent of an H-1B visa. Employers must pay the market wage for the position, as in the United States, but they must also conduct a labor market test for some workers.29 “Generally, occupations that require an associate or bachelor’s degree are exempted from the test,” said Noah Klug, formerly a senior lawyer with Nevett Ford in Melbourne (now a senior associate with Berry Appleman & Leiden). “However, there are some exceptions to that rule, such as engineers. Meeting the requirement usually is not difficult. The sponsor simply must provide evidence that they advertised locally for the role for at least one day in the last 12 months. Even job ads through social media can suffice.” Overall, the process for petitioning for skilled professionals is considered fairly easy for employers, according to Klug.30

In December 2014, the Australian government proposed a new type of visa that would create minimal bureaucracy for employers. The visa would allow high-skilled foreign nationals to work in the country for up to one year. Employers would not need to engage in labor market testing or skills or language requirements. “A visa such as the proposed short-term mobility visa would assist the Australian economy to remain competitive and assist to create economic growth,” according to Tim Denney with Berry Appleman & Leiden in Australia.31

“Having practiced both U.S. and Australian immigration law, I have found there are many ways in which the Australian immigration system is more advanced,” said Noah Klug. He points to a list of qualifying occupations for the 457 work visa. “That makes the process infinitely simpler and clearer for employers as compared to the U.S. system, where you are always worried about whether the immigration service will consider your employee’s role to be a ‘specialty occupation’ as required for the visa.” He said the U.S. problem is even worse on L-1 visas for intracompany transferees since “USCIS is constantly moving the goal posts” on interpreting various terms. “Another example: Australian work visas have been filed and processed electronically for a number of years now. The paper filing system used by USCIS is simply an embarrassment for the United States from the perspective of its global neighbors. It is so archaic.”32

Singapore
In comparing countries, Klug believes Singapore is better than Australia for obtaining temporary visas, but Australia is much easier for permanent residence.33 One change in Singapore in 2014 required employers seeking foreign nationals first to post a position in a government-run job bank with the related expectation to interview qualified Singaporeans. Individuals exempt from the Jobs Bank requirement include intracompany transferees, those hired by companies with 25 or fewer employees, existing employees, and those earning the equivalent of 12,000 Singapore dollars a month (about $9,000). Since the unemployment rate in Singapore hovers around 2 percent, few skilled professionals are available. Given Singapore’s traditional openness toward immigration, the new policies do not overly concern the country’s immigration professionals. “Companies are still likely to get the person they want,” said Mark Chowdhry, managing associate at Magrath Global in Singapore.34

The U.K.
The equivalent of an H-1B visa in the U.K. also works much better for employers and those sponsored than its American counterpart. “Across the board, the denial rates for employment visas are exceptionally low in the U.K.,” said attorney Emily King, the EMEA regional director at Berry Appleman & Leiden’s London office.35 Under a Tier 2 general “unrestricted” visa there is no quota and no labor market testing required if the position pays 153,500 British pounds (about $250,000) a year or the skills required are considered in short supply by the Migrant Advisory Committee. Although there is a monthly quota under Tier 2 for skilled workers, it has never been reached.

If the position is not considered in shortage and pays less than 153,500 British pounds, then an employer must undertake a Resident Labor Market test. The employer must advertise for 28 calendar days using two different sources, usually a government job board and a newspaper or website. If an applicant meets the criteria but is not right for the job, then an employer needs to document why the person is not suitable. The process is “self-certified” by employers, but the government conducts audits. The U.K. government has tightened the rules to ensure that a job opening is genuine, but attorneys do not expect it to affect clients, except perhaps some information technology consulting companies and employers in the retail and hospitality industries.36 Although there is nominally a points-based system for temporary work visas in the U.K., Emily King said, “It’s complete nonsense to call it a points system.” The “points-based system” name was added for political purposes, she said, and mirrors what was already required under the law.37

The process generally takes two to three months. That is the biggest complaint from employers, according to Rose Carey, a partner at Speechly Bircham LLP in London.38 Carey concedes that the two to three months of delay for employers in the U.K. is preferable to the 12 months or longer U.S. employers typically experience without even the guarantee of approvals of H-1B visas due to the quota. “If someone has the right skills, the position is skilled enough and the salary is high enough, then the prospects for approval are good in the U.K.,” said Supinder S. Sian, national partner at Squire Patton Boggs in London.39

France
Hiring high-skilled foreign nationals in France is considered simple. No quotas exist, and adjudicators deny few cases (only about 1 percent), according to immigration attorneys. France has three categories that, in combination, overlap the H-1B and L-1 visa categories in the United States — Skills and Talents (for individuals with unusual talent, including athletes and corporate executives), international service provider, and occupations on the skill shortage list. Those who fall outside these three designations are subject to labor market testing, although Raphael Apelbaum, a partner with LexCase in Paris, said that “the market test is very flexible” for high-skilled professionals and normally does not prevent employers from hiring the person they want.40

Many potential employees in France might also qualify for the EU Blue Card, which lasts for three years and is renewable, noted Karl Waheed, founder of an immigration firm in Paris.41 One complication for employers is that all foreign nationals must adhere to French labor regulations, which are more bureaucratic for hiring, firing and other labor rights than in the United States.

Switzerland
Nina Perch, an attorney with Sgier und Partner GmbH in Zurich, estimates a 95 percent approval rate for her clients in Switzerland hiring high-skilled non-EU nationals, primarily in finance and information technology.42 Sara Rousselle-Ruffieux, an attorney with BCCC Avocats Sàrl in Geneva, concurs that few clients experience denials when the rules are followed.43 A labor market test in Switzerland is needed, and the failure of this test must be documented before a non-EU national from outside the country can be hired. The salary level offered must be as high as that paid to Swiss workers.

Even though Switzerland is not a member of the EU, an EU national retains the ability to work in Switzerland on a local employment contract without the need to go through the immigration process. A referendum in 2014 may result in the country imposing quotas on EU nationals, although it does not affect the hiring of non-EU nationals. However, the Swiss government announced it has reduced the quota in 2015 for high-skilled workers from non-EU countries.44

Canada
Canada has no numerical quota for the equivalent of its H-1B visa for skilled foreign professionals. That absence of a quota gives it an edge over the United States. However, it has established a labor market opinion process that has become more onerous in the past year. The process can take three to five months and involves advertising similar in respects to the labor certification process used in the United States for green cards. Attorneys say the process has become “significantly” more difficult due to higher fees; strict advertising rules; and other requirements, including asking companies to produce transition plans to reduce the number of foreign workers in the future.45

Japan
Japan does not have a numerical limit, such as the H-1B cap, for skilled foreign nationals. In 2012, it introduced a type of points system for admitting skilled workers that has been considered unsuccessful in attracting workers. One problem in attracting workers to Japan is the language barrier, noted Yoshio Shimoda, an attorney with ILS Shimoda in Tokyo.46 In general, an Indian professional would rather work in an English-speaking country, he noted. The lack of a good system to be sponsored for permanent residence is also a problem.


13. “USCIS Reaches FY 2015 H-1B Cap,” Press Release, U.S. Citizenship and Immigration Services (April 10, 2014).
14. Those eligible for Optional Practical Training (OPT), primarily international graduate students, could stay in the country and work for a time period in OPT status. However, the low annual quota on H-1B visas means there is no guarantee individuals on OPT will obtain an H-1B visa in the future.
15. Interview with Karl Waheed. The only current exception is certain limits that have been placed on Croatia, the newest of the EU’s 28 member countries.
16. Your Europe, “Work-related rights,” at europa.eu.
17. Your Europe, “Workers’ and pensioners’ residence rights,” at europa.eu.
18. Interview with Lucy Jacobs.
19. Interview with Stefan Lenz. The qualifications for a D visa are straightforward. “For the D visa the applicant needs to have a job offer, needs to be a specialist, executive employee or the job requires a university degree in Germany. Furthermore, the applicant needs to have a salary that is comparable with a German employee,” according to Stefan Lenz, head of the legal department at ICUnet.AG. To apply for an appropriate visa at the German Embassy the original application and signed documents are usually necessary. “For high qualified jobs (IT, mechanical engineering, doctors, etc.) no labor market check will be done by the German labor office,” according to Lenz. “But when an assignee in these jobs applies for a Blue Card in the case of a shortage occupation or according to another article of the German immigration law, the labor office generally will check the conditions of employment (e.g., salary, working hours, vacation entitlement etc.). These need to be comparable with the conditions of employment of German employees. In a case that the assignee fulfills the requirements of the Blue Card and receives a minimum salary of currently 48,400 euros (in 2015), the labor office will not be involved. Furthermore non-EU country citizens graduating from a German university also do not require the approval by the German labor office as long as the job in Germany is in line with their studies. This is also true for executive managers, where the labor office will also not be involved.”
20. Hong Kong: The Facts, “Immigration,” Information Services Department, Hong Kong Special Administrative Region Government.
21. Interview with Christopher Hooley.
29. Sponsors for 457 visas are required to prove they spend an amount each year on training their Australian citizen and permanent resident staff at least equivalent to 1 percent of total payroll. Alternatively, they can donate each year to a qualifying Australian training fund an amount that is at least equivalent to 2 percent of total payroll. Most businesses in Australia that petition for foreign workers, particularly high-skilled workers, meet this obligation without great difficulty, according to legal experts.
30. Interview with Noah Klug.
31. “Australia — Visa Proposal,” Client Alert, BAL Corporate Immigration (January 9, 2015).
32. Interview with Noah Klug.
33. Ibid.
34. Interview with Mark Chowdhry
35. Interview with Emily King. EMEA is Europe, Middle East and Africa.
36. Ibid.
37. Ibid.
38. Interview with Rose Carey.
39. Interview with Supinder Sian.
40. Interview with Raphael Apelbaum.
41. Interview with Karl Waheed.
42. Interview with Nina Perch.
43. Interview with Sara Rousselle-Ruffieux.
44. Interview with Nina Perch.
45. Fragomen Worldwide in Canada; interview with Peter Rekai.
46. Interview with Yoshio Shimoda.

Score Breakdown by Country on Hiring High-Skilled Foreign Nationals

Germany
Germany 5.0

Applications for high-skilled people are rarely turned down, there is no annual quota and Germany’s membership in the European Union (EU) provides access to 500 million people who can work without any immigration processing. The process is clear enough that some employers do not need attorneys to apply. The EU Blue Card provides an easy option for hiring non-EU skilled professionals, including no labor market test.

View Germany Profile
Australia
Australia 4.0

There are no quotas on temporary visas for high-skilled foreign nationals. There are market wage requirements and a labor market test for a number of positions (but exemptions exist and advertising could be for just one day). Most employers meet the training requirement.

View Australia Profile
Singapore
Singapore 4.5

There is no quota, and cases are typically approved for high-skilled foreign nationals. Employers must pay a market wage. A Jobs Bank requirement was recently added, but exemptions exist. Singapore is highly rated for economic freedom.

View Singapore Profile
United Kingdom
United Kingdom 4.0

The monthly quota on high-skilled foreign nationals has never been reached and causes only minor delays. Employers must pay the market wage and conduct a labor market test (but exemptions exist). Since the United Kingdom (U.K.) is a member of the European Union (EU), employers have access to 500 million citizens to hire without immigration processing. 

View United Kingdom Profile
France
France 4.0

Applications for high-skilled people are rarely turned down. There is no annual quota, and France’s membership in the European Union (EU) provides access to 500 million people who can work without any immigration processing. The EU Blue Card provides an easy option for hiring non-EU skilled professionals. Strict French labor rules apply to foreign nationals, adding layers of bureaucracy for employers.

View France Profile
Hong Kong
Hong Kong 4.5

There are no quotas on high-skilled foreign nationals. There are low denial rates, few bureaucratic rules and a general guideline of salary “commensurate with market wage.” Hong Kong is highly rated for economic freedom.

View Hong Kong Profile
Switzerland
Switzerland 3.5

Applications for high-skilled people are rarely turned down. However, employers must pay a market wage and conduct a labor market test. Although not reached in 2014, quotas exist for non-European Union (EU) workers. Switzerland’s agreement with the EU provides access to 500 million people who can work without any immigration processing. That will remain the case unless the government imposes quotas on immigration from the EU due to the 2014 referendum.

View Switzerland Profile
Canada
Canada 3.5

There is no annual quota for hiring high-skilled foreign nationals. Employers must pay a market wage; recent requirements for employers to test the labor market have made the process much more difficult for employers.

View Canada Profile
United States
United States 2.0

More than half of applicants for H-1B visas each year are denied the opportunity to work due to the low H-1B quota.

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Japan
Japan 2.0

There is no annual quota on hiring high-skilled foreign nationals. The lack of a good system for permanent residence, as well as language and cultural issues, limits Japan’s ability to hire high-skilled foreign nationals on temporary visas.

View Japan Profile

About the Report

Business Roundtable selected the evaluated countries based on five criteria:

1. Worldwide university rankings;
2. Per-capita income;
3. Gross domestic product growth rate;
4. Net migration rate; and
5. Research and development investment.

After comparing each advanced economy relative to the five criteria, the top 10 countries (including the United States) were selected for the study: Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland and the United Kingdom (U.K.). Not coincidentally, these are the countries with which the United States competes most for foreign talent, particularly in science and technology fields.

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