Companies that rely on foreign workers brought to the U.S. through a popular visa program would face new restrictions in North Carolina, under a plan by Senate Republican leader Phil Berger to shake up the rules for state economic development incentives.
The proposed changes would block companies from counting H-1B visa workers toward the jobs they commit to create in North Carolina in exchange for funds from the Job Development Investment Grant program. The grants, North Carolina's main incentives tool, have helped secure major expansions and relocations in recent years — from MetLife and Allstate to appliance company Electrolux and Bubble Wrap maker Sealed Air.
Berger, who unveiled the proposal in draft legislation this month, said the restrictions on visa workers are designed to ensure state incentives go to companies intent on hiring North Carolinians. The idea seems to have the backing of Democratic Gov. Roy Cooper, whose office said Cooper "believes we need to encourage a diverse workforce but that state jobs incentives should be narrowly tailored to benefit North Carolinians."
Companies receiving the incentives grants could still hire H-1B workers, just not apply them to job-creation targets, Berger's office said.
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The proposal appears to be the first of its kind for any state, according to industry officials.
Critics of the measure say it could harm North Carolina's ability to attract companies, especially technology firms that rely heavily on the visa workers, such as Apple and Amazon. Berger's push comes as both tech giants are considering putting operations in North Carolina.
"In terms of the specific legislation in North Carolina, we aren't aware of other states that have taken this approach," Fwd.us, an advocacy group backed by Bill Gates and Mark Zuckerberg, said in a statement.
The organization, a major supporter of the H-1B program, said highly skilled immigrants provide a boost to the U.S. economy through their spending and by creating jobs for native-born Americans.
"They buy homes and vehicles here, dine at local restaurants and shop at local stores, helping to make our economy stronger and contributing their skills and talents to the American workforce," the group said, adding: "Areas and industries with higher concentrations of high-skilled immigrants have seen wage growth for native-born Americans that has outpaced the rest of the country."
Nimish Bhatt, board vice chair at the Carolinas Asian-American Chamber of Commerce, is among those concerned about the move. North Carolina is already grappling with a shortage of skilled tech workers, and Berger's ban could cause such companies to chose another state for expansions or relocations, he said.
"New companies will not come," Bhatt said. "We will hurt our own economy and our own employment."
The Charlotte Regional Partnership and the Charlotte Chamber of Commerce — the two main groups that recruit jobs to the Charlotte area — declined to comment.
Part of state budget
The ban is among other revisions Berger and Republican House Speaker Tim Moore are seeking to the grant program, which last year awarded more than $200 million to companies. The incentives changes, which include eliminating a $6,500-per-job cap on grants for large projects, have been incorporated into the state budget. Berger and Moore have previously said they plan to hold a vote on the budget this week.
Berger said his proposal comes after Observer coverage on the state's practice of awarding tens of millions in grants to companies that hire foreign workers.
In one case cited by the Observer, India-based outsourcing firm HCL Technologies was awarded more than $19 million by North Carolina in 2014 to create 1,237 new jobs by the end of 2018. The following year, the company filed applications for more than 2,000 H-1B workers based in the state, the vast majority in Wake County.
It's the latest scrutiny of H-1B visas, a decades-old federal program that lets companies bring foreign workers to the U.S. temporarily to fill jobs requiring highly skilled labor. Many of the workers are from India and employed in information technology.
Employers say the program helps them fill jobs that draw too few qualified applicants. In the Charlotte metro area, as many as 14,000 H-1B workers are spread across banking and other industries, according to Bhatt, of the Asian-American Chamber.
Critics, including President Donald Trump, have said the visas are being abused to replace American workers with cheaper foreign labor.
North Carolina has 19,518 open computing jobs — 4.8 times the average demand rate in the state, according to Code.org, a nonprofit focused on increasing access to computer science education in schools. The state had only 1,284 computer science graduates in 2015, according to the group.
Tariq Bokhari, co-founder of the Charlotte-based Carolina Fintech Hub, sees pros and cons to the move. On the one hand, Berger's proposal would benefit the state by making sure technology jobs go to North Carolinians, Bokhari said.
On the other hand, the financial technology industry has more job opportunities than available workers, creating tremendous need to arm people with such skills, he said.
"The bill seems to make sense as long as it's connected to, or at least indirectly or loosely in some way, to the efforts of uptraining in the region," said Bokhari, a Republican member of Charlotte City Council.
Reached before the bill was introduced, Sen. Joel Ford, a Democrat said it was important that the state not enact policy that makes it hard for companies to fill jobs.
"I am supportive of putting North Carolinians first, but I want to do that cautiously and making sure that we do not hurt businesses from being able to recruit and retain these jobs," Ford said. "What I'm concerned about is our major financial centers in Charlotte that use a lot of these H-1B visa workers and technology firms that use them."
Berger's office said the lawmaker is not concerned about the ban impacting job recruitment: "This is a win-win for companies looking to move to or expand in North Carolina and for workers in our state."
Berger's office would not comment on specific job recruitment efforts, but said the state's economic development policy is designed to attract companies interested in hiring North Carolinians.
The rule would only apply to workers on H-1B visas or who are classified as H-1B status, and it would not apply to other visa holders, Berger's office added.
Attorney John Miano, who works for the Immigration Reform Law Institute, the legal arm of the conservative Federation for American Immigration Reform, said he wrote emails to Berger and Moore encouraging the leaders to broaden the scope to exclude other visa holders.
"I said the way to do it would be to conform to the federal law, which is to require the job creation to be protected individuals," Miano said, referring to U.S. citizens, permanent residents and asylum seekers. "So if you say 'protected individuals,' you're covering all those that you're required to hire that have free access to the U.S. labor."
Miano said he received no response from either lawmaker.