TechServe Alliance Legislative History: 1996-2013

Below you'll find the history and outcome of TechServe Alliances' IT governance recommendations.

2013 Preserving Access to the H-1B Visa Program for U.S. IT and Engineering Staffing Firms: Successfully Lobbying on Behalf of Industry Interests during the Comprehensive Immigration Reform Debate
On April 17, 2013, the Senate "Gang of Eight" completed its work and introduced its comprehensive immigration reform bill. TechServe Alliance successfully lobbied against inclusion of a proposed "No Labor for Hire" provision in the original draft — a provision if enacted into law would have completely prohibited the placement of H-1Bs by all staffing firms. Since introduction, the TechServe Alliance Government Affairs team has been actively engaged during the Senate Judiciary Committee’s consideration of the bill. On May 21st, the amended bill was approved by the Senate Judiciary Committee with all key elements of importance to the staffing industry intact. The legislation now moves to the Senate floor for consideration.
2011-2012 Preserving Access to the H-1B Visa Program for U.S. IT Staffing Companies: Advocacy before USCIS and the Department of State
On June 17, 2011, following meetings between TechServe Alliance and Sen. John Cornyn (R-Texas) regarding the Neufeld Memo restrictions, the Senator sent a letter to USCIS weighing in on behalf of IT staffing companies. The Senator’s efforts led to a meeting in August with TechServe Alliance leadership, the U.S. Chamber of Commerce and USCIS Director Mayorkas and his senior staff to discuss the U.S. IT staffing industry and the need for clarification of the Neufeld memo. As a result of this meeting, on March 12, 2012, USCIS released new guidance to clarify that staffing firms are eligible to sponsor H-1B workers even when placing at third party sites.

Clarification of the Computer Professional Exemption
October 20, 2011, Senator Kay Hagan (D-NH), along with the bipartisan support of Senators Bennet (D-CO), Isakson (R-GA), and Enzi (R-WY), introduced The Computer Professional Update Act (CPU Act), which would modernize the Computer Professional Exemption. TechServe Alliance was a key member of the coalition of associations and companies which led to the bill’s introduction on a bipartisan basis.
2007-2010 Preserving Access to the H-1B Visa Program for U.S. IT Staffing Companies: Legal Action
Beginning in 2007 through the present, TechServe Alliance (formerly known as the National Association of Computer Consultant Businesses) has been actively engaged in defending the industry against legislation that would restrict or outright prohibit U.S. IT staffing firms from accessing the H-1B visa program. While we support efforts to eliminate fraud, any reform of the H-1B visa program should not discriminate against U.S. IT staffing companies. In 2010, TechServe Alliance filed suit against USCIS over the Neufeld Memo, which drastically inhibited IT staffing company access to the H-1B program. While the court declined to issue an injunction, the government conceded that the Neufeld Memo was not binding on adjudicators.
2006 Small Business Health Plans
In 2006, TechServe continued its active support of association health plan legislation. Although the "Small Business Health Fairness Act of 2005", passed the House (H.R. 525), the companion Senate bill (S. 406) fell short of the 60 vote super-majority required to invoke cloture.

Clarification of the Computer Professional Exemption
During the 109th Congress, TechServe was working behind the scenes meeting with key staff members on Capitol Hill to attach TechServe's legislative language clarifying the computer professional exemption to minimum wage legislation. Ultimately, the political environment in late 2006 prevented consideration of any amendments (other than a minimum wage increase) to the Fair Labor Standards Act, including our CPE provision.
2005 Small Business Health Plans
In 2005, TechServe added support of association health plan legislation to the TechServe Legislative agenda. We participated in a coalition that advocated for passage of the legislation.

The Small Business Health Fairness Act of 2005 was introduced in both the Senate (S. 406) and in the House (H.R. 525). These bills would allow association-sponsored health plans by permitting associations to provide insurance to association members and their members' employees under the Employee Retirement Income Security Act (ERISA), which preempts state mandated benefits. The plans would be administered under the Department of Labor, much like what is enjoyed by large corporations and unions already. On Wednesday, March 16th, H.R. 525 passed the House Committee on Education and the Workforce. In the 108th Congress, the House passed similar legislation (H.R. 660) by a vote of 262-162 with bipartisan support.
2004 Closing the L-1B Visa Loophole
On November 20, 2004, TechServe's legislative provision (S. 1635 Substitute) designed to close the L-1B Visa Loophole was incorporated verbatim into the Omnibus Appropriations Bill. TechServe worked with Chairman Saxby Chambliss (R-GA) to craft a bill that would prohibit the abuse of the L-1B visa by foreign IT consulting firms. The bill was approved by both the House of Representatives and Senate and was signed into law by the President on December 8, 2004.

Against the backdrop of a challenging employment environment for U.S. IT workers and the U.S.-based IT services companies that place many of them, offshore companies were bringing in thousands of lower wage IT workers to place at client sites using a loophole in U.S. immigration law. The L-1 visa (intra-company transfer) program was intended to permit multinational companies to transfer foreign nationals who were company executives or managers or employees with specialized knowledge of the company's products and operations. It was never intended to allow offshore companies to bring in lower wage IT workers (often as supplemental staff at client sites) by circumventing Congressionally mandated safeguards and rules imposed under the H-1B program.

The legislative changes included in the new law are:
  • Ban the use of L-1B visas where the foreign national is supervised principally by the client at the client's worksite
  • Ban the use of L-1B visas in a staff augmentation arrangement
  • Requires L-1B applicants to have been continuously employed for at least a year (increased from 6 months)
  • Directs the Department of Homeland Security to collect statistics on L-1B use
  • Directs the Inspector General of the Department of Homeland Security to investigate and report to the Congress on L-1B abuses
  • Establishes an Interagency Task Force on L visas
  • Collects a $500 Fee for each L visa to be used to fund fraud detection
2003 TechServe Testified at a Senate Hearing on L-1 Visa Abuse; Proposed A Legislative Fix
TechServe testified on July 29, 2003, before the Senate Judiciary Subcommittee on Immigration and Border Security, and Citizenship at a hearing entitled the "L1 Visa and American Interests in the 21st Century Global Economy" on the abuse of L-1B visas.
2001 Technology Education and Training Act of 2001
On April 24, 2001, S. 762, the Technology Education and Training Act of 2001 (TETA) was introduced in the U.S. Senate by Senator Kent Conrad (D-ND). On May 9, 2001, as part of a TechServe Lobby Day event, Gerald Weller (R-IL) and Jim Moran (D-VA) introduced the companion bill HR 1769 in the U.S. House Representatives. TETA authorizes a $1500 tax credit to employers (per enrolled individual) who provide employee training that leads to an approved IT certification. The credit is increased to $2000 if the training is provided to individuals in economically disadvantaged areas.
2000 Computer Professional Exemption
On March 9, 2000, the U.S. House of Representatives approved H.R. 3081, the Small Business Tax Fairness Act of 2000. This legislation which provides for an increase in the minimum wage and tax cuts, included the TechServe-sponsored clarification of the federal computer professional exemption. Our legislative language on the computer professional exemption would make clear that overtime wages (1-1/2 times the regular hourly rate) need not be paid to highly skilled workers employed in Internet and World Wide Web-related positions (as well as other high-tech occupations). However, in light of the highly partisan environment, the minimum wage bill itself was not enacted during the 106th Congress.

Immigration
Given the shortage of high-tech workers, TechServe joined other business groups advocating for a modest but temporary increase in the H-1B visa cap. In October 2000, Congress passed legislation raising the cap to 195,000 H-1B visas, which was signed by the President. The legislation adopted several other TechServe-endorsed modifications to H-1B program.
1999 Y2K Liability Limitations
In early 1999, TechServe joined in the "Y2K Coalition." The coalition, comprised of more than 100 companies, associations and lobbying firms, went to battle to ensure that real protection was offered from frivolous and unwarranted lawsuits to those individuals who were attempting to correct the Y2K problem. The passage of the "Y2K Act" represented a major legislative victory for TechServe and its members. In fact, it was TechServemembers who, in a break through meeting with Congressional staff, provided the momentum and the "real life" experience which helped to push passage of this key legislation.
1998 IRS Restructuring
More than six years ago, TechServe called for new taxpayer rights for small businesses engaged with the IRS in audits or legal proceedings. In 1998, with significant input from TechServe, Congress enacted legislation restructuring the IRS. One of the bill's major provisions shifts the burden of proof in civil court cases from the taxpayer to the IRS on matters involving income, estate and gift taxes.

Immigration
In 1998, heavy hitters in the information technology industry descended on Washington seeking an increase in available visas for foreign temporary high-tech workers. Opponents of an increase moved to exact the highest price possible for any additional visas. With these lines drawn in the sand, TechServe entered the fray to protect interest of IT services firms. A strong TechServe voice blocked the enactment of the most onerous proposals for new regulation on all employers using foreign temporary high-tech workers. TechServe worked closely with Senators Abraham and Hatch to produce a bill that would increase the number of available high-tech worker visas, but would not add new requirements for employers. TechServe maintained high visibility throughout the debate of this issue. As a result, sources close to the Congressional-White House negotiations continually kept TechServe apprised of developments and provided TechServe an opportunity for input. TechServe was pleased the compromise legislation allowed the vast majority of IT services firms to continue to operate without being subjected to burdensome new regulations.
1997 Staffing Firm Status As An Employer
TechServe worked to have Congress codify the long-standing judicial precedent that high-tech professionals employed by staffing firms on a W-2 basis are employees for tax purposes of IT services firms and not the employees of clients. In the past few years some IRS auditors have claimed that "leasing firms" — which differ from IT services firms — are not employers; but rather clients are the true employers. TechServe and other associations supported legislation that would prevent the IRS from taking this same position for IT services firms and other types of alternative employment arrangements.

Increased Role for U.S. Tax Courts in Worker Classification Cases
In 1996, TechServe appeared before the House Ways and Means Committee to call for changes in the judicial review procedures of employment tax worker reclassification cases. At that time, the procedures resulted in an automatic employment tax lien on a business even before the business had had its day in court. These liens were often very harmful as banks and suppliers shunned businesses under scrutiny. In the 1997 Taxpayer Relief Act, Section 7436 gave the Tax Court jurisdiction to review IRS determinations in worker reclassification cases. As a result, collection activity, assessments, and interest are suspended while the matter is pending in Tax Court.
1996 Overtime Exemption for Computer Professionals
During the 1996 legislative season, TechServe led the successful campaign to have exempt hourly paid computer professionals from time and one-half overtime through the use of a high hourly wage instead of the previous practice of utilizing a multiple of the minimum wage. The rate is now set at $27.63 per hour.

Leased Employee Laws
In 1996, TechServe led a successful legislative effort to exempt high-tech professionals employed by IT services firms from the federal definition of "leased employees." Under prior law, a client had to collect detailed wage and benefits data and apply complex mathematical tests to ensure that continued use of these professionals for more than one year did not affect the tax-exempt status of the client's pension plans. To avoid this onerous testing requirement, some clients arbitrarily terminated IT consultant at the end of a year. Incorporating the TechServe-proposed definition a "leased employee," Congress passed legislation that eliminates the requirement for this burdensome testing.