In enacting the American Competitiveness and Workforce Improvement Act, Congress gave the benefit of a doubt to the widespread belief that the United States is facing a severe shortage of workers who are qualified to perform skilled information technology jobs, although it recognized that evidence of a shortage is inconclusive. The Act increases H-1B visa quotas from 1999 through 2002 leveling off in following years.

Congress recognized that "job contractors" or "job shops," many of which make no pretense of looking for American workers and are in business to contract their H-1Bs out to other companies, are the employers most prone to abuse of the H-1B program. The companies to which the H-1Bs are contracted benefit in that the wages paid to the foreign workers are often well below what comparable Americans would receive, and in not shouldering the obligations of legally recognized employers (the job shop remains the "employer.")

Under the Act, two new attestations--the no-lay off/non-displacement and recruitment attestations--will apply to those employers 15% or more of whose workforces are composed of H-1B workers. These businesses, designated as "H-1B-dependent,'' will be subject to the attestations where they petition for H-1Bs without masters degrees in high technology fields or where they plan to pay the H-1Bs less than $60,000 a year. Congress intends thereby to target companies most likely to abuse the system--job contractors/shops who are seeking aliens without extraordinary talents (only bachelors degrees) or offering relatively low wages. Other employers, who use a relatively small number of H-1Bs, will not have to comply with the new attestations unless they have been found to have willfully violated the rules of the H-1B program.

The no-lay off attestation prohibits an employer from laying off an American worker from a job that is essentially the equivalent of the job for which an H-1B alien is sought during the period beginning 90 days before and ending 90 days after the employer files a visa petition for the alien. The recruitment attestation requires an employer to have taken good faith steps to recruit American workers for the job an H-1B alien will perform and to offer the job to an American worker who applies and is equally or better qualified than the alien. The attestations sunset after 2001.

The Labor Department will enforce all aspects of the program except in instances where an American worker claims that a job should have been offered to him or her instead of an H-1B alien. In such cases, an arbitrator appointed by the Federal Mediation and Conciliation Service will decide the issue.

The Labor Department will be able to investigate an employer using the H-1B program without having received a complaint from an aggrieved party in certain circumstances. An employer must offer an H-1B alien benefits and eligibility for benefits on the same basis, and in accordance with the same criteria, as the employer offers to American workers. Potential penalties include back pay, civil monetary penalties of ,000 per violation ($5,000 per willful violation, and $35,000 per violation where a willful violation was committed along with the improper layoff of an American worker), and debarment from the H-1B program for from 1 to 3 years.

The Act also has a new "whistleblower" provision for employees who cooperate with the DOL regarding potential violations.