According to the Migration Policy Institute (MPI), 32% of all immigrant adults in the U.S. have a bachelor’s degree or higher. To get the full picture, 33% of U.S.-born adults have the same educational background, which means that immigrants make up a large pool of higher-educated individuals in the U.S.
Filling a role that requires a highly qualified individual is not easy and having an immigration strategy is crucial however, you should be aware of the rules in terms of immigration if you want to do it right and avoid potential penalties.
First things first, you want to find an individual that has specific experience for that role, that’s an obvious one. But if your company collaborates with foreign countries that the U.S. restricts or regulates trade with, that’s another story and certainly another level of complication as the “deemed export” rule which applies to the release of controlled information to foreign nationals in the United States, even if the information is not physically exported!
That’s right! You may need an export license just to collaborate with a foreign national that you’ve hired. Not only that, but you may need to partition off your technology within your ERP system!
Export Control Laws:
- The Export Administration Regulations (EAR) regulate the export of dual-use items, including technology and software, to foreign nationals.
- Understand your product or technology, what is it’s ECCN number?
- The deemed export rule applies to the release of controlled information to foreign nationals in the United States, even if the information is not physically exported.
Anti-Discrimination Laws:
- The Immigration and Nationality Act (INA) and Title VII of the Civil Rights Act of 1964 prohibit employers from making hiring, firing, recruitment, or referral decisions based on an employee’s national origin.
- Employers are not required to hire foreign nationals who require visa sponsorship (e.g., H-1B, etc.).
- Outside of that exception, employers can only request documents for the sole purpose of determining that the new employee’s status complies with export control laws to determine whether an export license will be needed.
What are the EAR and ITAR regulations?
The Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) govern what may be exported from the United States to other countries. The controls are designed to restrict access to “dual-use” (i.e., having both civil and military applications) technology or software to countries or persons that might use such items contrary to U.S. interests. Most notably, controls are designed to stem the proliferation of nuclear and weapon technologies and limit the military and terrorism support capability of certain countries. Thus, the regulations concern what the technology is and what country or foreign national will be receiving it.
What are some examples of controlled technologies?
Examples include telecommunications and information security technology, GPS technology, sensors and lasers, navigation and avionics systems, nanotechnology, biotechnology and high-performance computing capabilities. The EAR provides exceptions for technologies that are, among other things, already “publically available” or educational in nature. Yet purely commercial items without an obvious military might be subject to the EAR (e.g., sonar fish finders), so a proper inquiry requires an evaluation of EAR and ITAR.
Why should compliance be an issue for a company that does not export controlled technologies?
Under the regulations, “export” means more than just shipment overseas. The “deemed export rule” requires companies to seek and receive authorization from the U.S. government before releasing controlled technology or technical data to foreign persons within the United States. Under both the EAR and the ITAR, release of controlled technology or technical data to foreign persons in the United States, even by an employer, is deemed to be an “export” to that person’s country or countries of nationality. The major implication of the new rule is that a U.S. company must seek and receive a license from the U.S. government before it releases controlled technology or technical data to its nonimmigrant workers employed as H-1B, H-1B1, L-1A, L-1B or 0-1A beneficiaries.
What are some situations that may trigger the deemed export rule?
Common situations that can involve release of U.S. technology or software include foreign national employees involved in certain research, development and manufacturing activities; foreign students or scholars conducting research; and an employer hosting a foreign scientist.
Are certain foreign nationals exempt from the deemed export rule?
The deemed export rule applies to any foreign national, except a person who: (1) is granted permanent residence status (i.e., issued a Green Card); (2) is granted U.S. citizenship; or (3) is granted status as a “protected person” under the regulations.
What are the penalties for noncompliance?
While it is unclear how strict the USCIS will be in enforcing this new section of Form I-129, an employer who knowingly makes a false statement or conceals a material fact to the U.S. government is subject not only to a denial of the visa petition, but also to civil and criminal penalties. Not obtaining an export license when required, even if the employer mistakenly believes one is not required, can subject the employer to export enforcement action by the BIS and DDTC, or criminal prosecution by the U.S. Department of Justice. Civil fines can amount to $500,000 per violation and criminal penalties can amount to $1 million per violation and up to 10 years in prison, and the employer can also be subject to a denial of export privileges and debarment from U.S. government contracts.
Key Considerations:
- Employers must ensure that hiring practices do not violate anti-discrimination laws and export control regulations.
- Employers must verify the eligibility of foreign nationals for employment and ensure that they comply with export control laws.
- Employers must maintain accurate records of hiring and employment decisions to demonstrate compliance with anti-discrimination laws and export control regulations.
Best Practices:
- Conduct thorough background checks on foreign national employees to ensure compliance with export control laws.
- Verify the eligibility of foreign national employees for employment and ensure that they comply with export control laws.
- Ensure that hiring practices do not violate anti-discrimination laws and export control regulations.
- Maintain accurate records of hiring and employment decisions to demonstrate compliance with anti-discrimination laws and export control regulations.
By understanding the U.S. export laws and regulations that apply to hiring foreign nationals, employers can ensure compliance with both anti-discrimination laws and export control regulations, while also maintaining a diverse and talented workforce.
As always, the SBDC and the Go Global Initiative are here to assist in growing your international business. Our services remain free and confidential. How can we assist you today?
