2017-03-30 / News

With H2B Visa Cap Reached, Area Businesses Preparing for a Possible Shortage of Workers

By Kevin Hess

With a federal cap on temporary foreign workers reached early this year, some local tourist businesses are evaluating whether they will have to open later, reduce services, or change the way they operate. Legislation introduced this month could allow more workers into the country by exempting returning workers from the cap. The longtime exemption was removed last year, and the time period in which to apply was shortened, and these changes were significant in putting stress on the program this year.

Businesses in the Straits area rely heavily on the H2B visa program, which allows U.S. employers to bring foreign nationals to the United States to fill temporary, nonagricultural jobs that American workers are not available, or able, to fill. The federal cap for H2B workers is 66,000 for the fiscal year from October 1 to September 30, and this year the cap was reached March 16, two full months earlier than 2016. This means that, other than several small exemptions, no more applications for H2B visas will be accepted by the United States Citizen and Immigration Services (USCIS). Student visas and other programs are also used by some businesses in the area, but the majority rely on the H2B program.

In 2016, employers who hired H2B workers saw changes in the process. Previously, businesses were able to apply for workers 120 days before they needed them. Last year, that time frame was reduced to 90 days. Although businesses had to wait a month later than before, most were able to still get the workers they needed, as the cap for H2B workers was not met until May. The recent non-renewal of a “returning worker exemption” by Congress significantly reduced the number of international workers available for U.S. businesses in fiscal year 2016-2017.

The returning worker exemption allowed workers who had been in the U.S. on an H2B visa from 2012- 2015 to return without counting against the cap. This enabled businesses to request the same workers without fear that the cap would be met. There were numerous other benefits to bringing back workers with experience, and with whom business owners had developed a good working relationship.

But now, some businesses may find themselves with a shortage of workers, especially those who have later opening dates, as that determined when they could request the workers. Joe Lieghio, who owns a bevy of restaurants and hotels in Mackinaw City, believes the impact of this cap will be significant.

“We’re taking our foot off the gas,” he said. “We may have to open later than we would like to because we don’t have the workers.”

Mr. Lieghio believes many businesses will not be able to completely fill their need for workers, forcing owners to possibly reduce hours, or forcing other employees to do more than they were hired to do.

“It’s a tragedy for the area,” said Mr. Lieghio. “Twenty years ago, our tourist season was just summer. Now we’ve extended... We depend on the tourism culture.”

He thinks as many as 1,400 foreign nationals work in this area under the H2B visa program.

Mr. Lieghio is already thinking ahead to what he might have to do if he cannot fill his quota of workers. In the hotels, he has looked into outsourcing the front desk and reservations to a call center, acquiring kiosks for check-ins, and automating some of the housekeeping tasks. By using automation, he says, tasks that required 55 people could be done with 12.

“Technology is expensive, and I would much rather hire people to do the jobs, but if we have to go another route, we will,” said Mr. Lieghio.

He admits that his businesses may be in better shape than others, but he is not to the capacity he would like to be.

“We’re short,” said Mr. Lieghio. “We’ve been hiring pretty much everyone who walks in the door. We’ve gotten approval for a lot of workers, but we’re still in a reduced capacity stage.”

Efforts have been made throughout the years to raise the cap, and reduce the stress on businesses in areas like the Straits that rely so heavily on tourism. Jim Clapperton of Michigan Works in St. Ignace says that the issue in the Straits is a microcosm of all that goes on in the bigger areas.

“I’ve been told that in places like Washington and Lansing, the phrase ‘foreign worker’ is a dirty word,” said Mr. Clapperton. “We rely on H2B workers because we don’t have enough locals to fill all of the jobs.”

Mr. Lieghio agrees.

“Some people think this has to do with immigration and cheap labor,” he says. “We pay more for the foreign workers when you consider fees, travel, housing, and the advertising we are required to do when requesting (H2B) workers. We prefer locals, but there aren’t enough. If anyone wants a job, they can find one.”

Mr. Clapperton says that the H2B situation puts a lot of pressure on business owners. He was in the restaurant business for several years and could never fill all of the positions he needed.

“The extended tourism season can cause problems because of a lack of workers,” said Mr. Clapperton. “I was still listing jobs in October of last year because business were short employees. College kids (foreign and local) leave in midsummer and the tourism season is still going on. Business owners need those workers.”

Some businesses have been successful in filling their needs before the cap was reached, or by finding other workers to fill their ranks.

Jennifer King, general manager at Grand Hotel on Mackinac Island, says they will be fine.

“I don’t believe it will affect us,” said Mrs. King. “We, along with places like Mission Point, prepared accordingly and made sure we started the process as early as we could. It’s not a perfect scenario, but we’re not sounding the alarm here.”

One of the options that business owners have is to recruit H2B workers who are already in the country working elsewhere. Since these workers are already approved, they would not count against the cap. Some businesses take trips to areas that employ a lot of H2B workers, such as ski resorts out west, for this very purpose. Businesses have options, but those options are more limited than they have been in years.

“It’s going to be an interesting season,” said Mr. Lieghio.

There is some hope that the returning worker exemption will be reinstated.

State Senator Wayne Schmidt and Representative Lee Chatfield expressed their concerns about the program to U.S. Congressman Jack Bergman and, on March 20, he introduced H.R. 1627, the “Small Business Assistance Act of 2017” to amend the Immigration and Nationality Act to reinstate the returning worker exemption for H-2B visas for fiscal year 2017, retroactive to October 1, 2016. The bill was referred to the House Committee on the Judiciary. If it is passed, international workers who were in the United States on an H2B visa in 2014, 2015, or 2016 would not count against the cap.

No action has been taken at this time.

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