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TechServe Alliance Legislative History: 1996-2019

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

116th Congress: 2019-Present

TechServe Achieves Significant Victory in Final 20% Pass-Through Deduction Regulations

The Department of Treasury and Internal Revenue Service (IRS) on January 18, 2019 released the final regulations to implement the 20% pass-through deduction included in the Tax Cuts & Jobs Act (TCJA) of 2017, P.L. 115-97.

The final regulations made clear that TechServe member firms that operate as sole proprietorships, limited liability corporations, partnerships, or S corporations would be eligible for the full 20% pass-through deduction. To ensure that field agents had no questions regarding what constitutes “consulting,” TechServe urged the IRS to include specific examples in the final regulations. The changes made in the final regulations clarify that staffing firms do not fall within the definition of a specified service trade or business. (See “What’s New in Washington.”) More information is in the Spring 2019 Washington Report.

Preserving Access to the H-1B Visa Program: Riding Out the "Perfect Storm" 

Anti-H-1B visa efforts, through proposed legislation, executive order, and agency action, will dominate government affairs through the 2020 election. TechServe Alliance will continue to work with association members and coalition partners to respond to the administration’s efforts to gut the H-1B visa program.

TechServe Alliance Files Comments Opposing Proposed Changes to H-1B Visa Lottery Process

TechServe Alliance CEO Mark B. Roberts on January 2, 2019 submitted comments opposing Department of Homeland Security/U.S. Citizenship and Immigration Services (USCIS) proposed changes to federal regulations that could jeopardize the FY 2020 H-1B visa lottery and disadvantage many IT and engineering staffing firms.

On January 30, 2019, less than 30 days after the comment period closed, DHS/USCIS announced the finalization of a regulation to create an electronic pre-registration system for the H-1B visa lottery and to revise the H-1B visa selection process.

In a concession to the business community, the final regulation suspends the proposed electronic registration requirement for the FY 2020 cap season to complete user testing and ensure the system and process are fully functional. TechServe expressed strong opposition to implementing an untested registration system for the FY 2020 cap season.

The final regulation partially adopts the proposed rule and reversed the order by which USCIS selects H-1B petitions under the H-1B regular cap and the advanced degree exemption. USCIS projects that the change will increase by up to 16% (or 5,340 workers) the number of selected petitions for H-1B beneficiaries with a master’s degree or higher from a U.S. institution of higher education. While noting that many member companies reported that they already employ mostly H-1B workers who hold U.S. master’s degrees, TechServe urged that this proposed selection process change also be delayed pending further consideration of unintended consequences.

DHS/USCIS Regulatory Agenda Focuses on H-1B "Reform"

The Administration in its Fall Unified Regulatory Agenda promised major, disruptive changes to the H-1B visa program. (A Spring Unified Regulatory Agenda has not yet been released.) USCIS’s Fall Agenda anticipates several delayed rules may be issued in August 2019, including regulations to revise the definition of “specialty occupations” and “employee-employer relationship.” After threatening action for over a year, DHS on February 20, 2019 transmitted to OMB a proposed rule for review which would eliminate employment authorizations for H-4 Dependent spouses. The proposed rule 1615-AC15 is still under review. TechServe will monitor developments and remain engaged in this process as it moves forward.

Congress: 2017-2018

Preserving Access to the H-1B Visa Program: Surviving the “Perfect Storm”

H1-B visa reform, through proposed legislation, executive order, and agency action, has dominated TechServe Alliancie activities since the beginning of the 115th Congress. Given the potential for significant, detrimental impacts on the IT and Engineering Staffing and Solutions industry, immigration reform will be a primary focus for our 2017/2018 legislative efforts.

While Congress has not yet enacted legislation that would reform the H-1B visa program, the Administration is aggressively implementing the Buy American/Hire American (BAHA) Executive Order (EO)

President Trump on April 18, 2017 signed BAHA which directs the Secretaries of Homeland Security, State, and Labor, and the Attorney General to review regulations that allow H-1B visa holders to work in the United States. Over the past year, each department has acted to carry out BAHA and other executive orders intended to limit immigration as detailed in this Timeline. In addition to increasing audit site visitsRequests for Evidence, and Information Collection, agencies arguably are making regulatory changes without proper notice and public comment. One of the most egregious examples of this is the USCIS’s February 22, 2018 Third-Party Worksite Policy Memorandum. TechServe Alliance continues to work with association members and coalition partners to respond to the administration’s efforts to gut the H-1B visa program. 

At the same time, a bipartisan group of long-time opponents of the H-1B visa program have introduced legislation that would impose additional restrictions on staffing firms. Some of the proposals (S. 180/H.R. 1303would place an absolute bar on IT Staffing firm access to H-1Bs—prohibiting “labor for hire” (another term for staffing) or placements of H-1Bs at client locations—an essential element of the staffing model. 

In January 2018, retiring Senators Orrin Hatch (R-UT) and Jeff Flake (R-AZ) introduced S. 2344, the “Immigration Innovation Act of 2018, I2.” While I2 enjoys wide-spread support from a diverse group of businesses (including TechServe Alliance), immigration groups, and universities, the prospects for enactment this Congress are low.

Tax Cuts & Jobs Act of 2017, P.L. 115-97

In December 2017, Congress passed a “once-in-a-generation” tax bill. Among the key provisions is a 20% deduction for some services businesses organized as pass-through entities (e.g., S Corps, LLCs). The legislation was passed in record time – 50 days from introduction in the Senate to P.L. 115-97. Many provisions had been around from previous reform proposals; 119 provisions were brand-new ideas, many of which had not been the subject of hearings or thoroughly vetted – including the pass-through provision.

The 20% pass-through deduction is available to business owners of partnerships, S corporations, and sole proprietorships. Very generally, the deduction is 20% of the owner’s business income, subject to a number of restrictions and limits. Above certain income thresholds, the deduction is not available to “specified service trades or businesses.” TechServe Alliance is working with Congress and Treasury to ensure that staffing firms are eligible to receive the full 20% pass-through deduction.

Revising the independent contractor provision, which was not addressed in the 2017 legislation, remains a TechServe Alliance priority. Collaborating with coalitions, TechServe is following potential legislation addressing "gig" economy challenges that may impact the independent contractor issue.

114th Congress: 2015-2016

Preserving Access to the H-1B Visa Program: Gridlock Stalls Reform

A half-dozen bills at cross-purposes were introduced in the 114th Congress aimed at either restricting or expanding access to the H-1B visa program. Supporters of the legislation opposing an increase on H-1B visas—and in some instances reducing the annual cap of 85,000—pointed to highly publicized program abuses in which U.S. workers at Southern California Edison and Disney World were replaced by H-1B non-immigrants working for offshore outsourcing firms.

While the political climate and legislative gridlock blocked progress of immigration legislation, TechServe Alliance continued to educate lawmakers on the need to address the systemic technical talent shortage while continuing to meet near-term needs. Additionally, we continue to urge lawmakers to oppose legislative language that would unfairly and discriminatorily restrict our industry’s access to the H-1B visa program. 

113th Congress: 2013-2014

Preserving Access to the H-1B Visa Program: Successfully Advocating Industry Interests during the Comprehensive Immigration Reform Debate

On April 17, 2013, the Senate “Gang of Eight” completed its work and introduced a 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. The TechServe Alliance Government Affairs team actively was engaged during the Senate Judiciary Committee’s consideration of the bill, S. 724. On June 27, 2013, the Senate passed S. 744 with all staffing industry priorities intact. However, the bill died at the end of the 113th Congress after the House failed to take action. 

112th Congress: 2011-2012

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.

110th & 111th Congress: 2007-2008/2009-2010

Preserving Access to the H-1B Visa Program: Legal Action

Beginning in 2007 and through 2010, TechServe Alliance was actively engaged in defending the industry against legislation that would restrict or prohibit U.S. IT staffing firms from accessing the H-1B visa program. While TechServe Alliance supports 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 USCIS’s Neufeld Memo, which dramatically restricted 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. 

109th Congress: 2005-2006

Small Business Health Plans

In 2005, TechServe Alliance added support of association health plan legislation to the TechServe Alliance legislative agenda. We participated in a coalition which 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 their 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, similar to plans enjoyed by large corporations and unions. On March 16, 2005, the House Committee on Education and the Workforce reported out H.R. 525. In the 108th Congress, the House passed similar legislation (H.R. 660) by a vote of 262-162 with bipartisan support.

In 2006, TechServe Alliance continued its active support of association health plan legislation. Although H.R. 525 passed the House, the companion Senate bill (S. 406) fell short of the 60 vote super-majority required to invoke cloture. 

Clarification of the Computer Professional Exemption (CPE)

In 2005, TechServe Alliance worked behind the scenes meeting with key staff members on Capitol Hill to attach TechServe Alliance’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. 

108th Congress: 2003-2004

Closing the L-1B Visa Loophole: TechServe Alliance Testified at Senate Hearing; Successfully Proposed a Legislative Fix

In 2003, TechServe Alliance focused on closing the L-1B Visa Loophole. 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, 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.

TechServe Alliance testified on July 29, 2003 before the Senate Judiciary Subcommittee on Immigration and Border Security, and Citizenship at a hearing entitled the “L-1 Visa and American Interests in the 21st Century Global Economy” on the abuse of L-1B visas.

On November 20, 2004, TechServe Alliance’s legislative provision (S. 1635 Substitute) designed to close the L-1B Visa Loophole was incorporated verbatim into the Consolidated Appropriations Act, 2005, H.R. 4814. TechServe Alliance worked with Judiciary Subcommittee Chairman Saxby Chambliss (R-GA) to craft bill language which would prohibit the abuse of the L-1B visa by foreign IT consulting firms. H.R. 4814 was approved by both the House of Representatives and Senate and was signed into law (P.L. 108-447) by President Bush on December 8, 2004.

Key provisions of P.L. 108-447, Title IV, L–1 Visa and H–1B Visa Reform Act —

  • 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 arrangemen
  • Require L-1B applicants to have been continuously employed for at least a year (increased from 6 months)
  • Direct the Department of Homeland Security to collect statistics on L-1B use
  • Direct the Inspector General of the Department of Homeland Security to investigate and report to the Congress on L-1B abuses
  • Establish an Interagency Task Force on L visas
  • Impose a $500 fee for each L visa to be used to fund fraud detection

107th Congress: 2001-2002

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 Alliance Lobby Day event, Gerald Weller (R-IL) and Jim Moran (D-VA) introduced the companion bill H.R. 1769 in the U.S. House of Representatives. TETA authorized a $1,500 tax credit to employers (per enrolled individual) who provide employee training that leads to an approved IT certification. The credit is increased to $2,000 if the training is provided to individuals in economically disadvantaged areas. Although the bills had strong bipartisan support, no action was taken during the 107th Congress. 

106th Congress: 1999-2000

Computer Professional Exemption (CPE)

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 provided an increase in the minimum wage and tax cuts, included the TechServe Alliance-sponsored clarification of the federal computer professional exemption. Our CPE legislative language 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, due to the highly partisan environment, the minimum wage bill itself was not enacted during the 106th Congress. 


Given the shortage of high-tech workers, TechServe Alliance joined other business groups advocating for a modest, temporary increase in the H-1B visa cap. In October 2000, Congress passed legislation raising the cap to 195,000 H-1B visas. The legislation, which was signed into law by President Clinton, adopted several other TechServe Alliance-endorsed modifications to H-1B program.

Y2K Liability Limitations

In early 1999, TechServe Alliance joined in the “Y2K Coalition.” The coalition, comprised of more than 100 companies, associations and lobbying firms, fought to ensure that those individuals who were attempting to correct the Y2K problem were protected from frivolous and unwarranted lawsuits.

105th Congress: 1997-1998

IRS Restructuring

Dating back to 1992, TechServe Alliance called for new taxpayer rights for small businesses engaged with the IRS in audits or legal proceedings. In 1998, with significant input from TechServe Alliance, 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.


In 1998, influential information technology industry leaders 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 Alliance entered the fray to protect the interests of IT services firms. A strong TechServe Alliance voice blocked the enactment of the most onerous proposals for new regulation on all employers using foreign temporary high-tech workers. TechServe Alliance maintained high visibility throughout the debate of this issue.   As a result, sources close to the Congressional-White House negotiations continually kept TechServe Alliance apprised of developments and provided TechServe Alliance an opportunity for input. TechServe Alliance was pleased the compromise legislation allowed the vast majority of IT Services firms to continue to operate without being subject to burdensome new regulations.

Staffing Firm Status as an Employer

TechServe Alliance 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 prior 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 Alliance 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 Alliance 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. 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 were suspended while the matter was pending in Tax Court. 

104th Congress: 1995-1996

Overtime Exemption for Computer Professionals

TechServe Alliance led the successful campaign to have Congress de-couple from a multiple of the minimum wage the high hourly wage rate that exempts hourly paid computer professionals from time and one-half overtime. The rate is now set at $27.63 per hour.

Leased Employee Laws

In 1996, TechServe Alliance 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 consultants at the end of a year. Incorporating the TechServe Alliance-proposed definition of “leased employee,” Congress passed legislation that eliminated this burdensome testing requirement.