Owners of tourism-related businesses say an administrative delay and a sudden rule change in Washington have disrupted their operations at the worst possible time of year.
Every summer, thousands of hotels, restaurants and other small tourism firms around the country apply for a special set of visas, known as H-2Bs, that allow them to temporarily hire foreign workers to supplement their workforce during the busiest months.
In March, however, the departments of Labor and Homeland Security suspended processing all H-2B visa applications because of concerns regarding wage requirements for the program. The dispute took more than a month to sort out, leading to a backlog of applications and leaving many firms without the extra help they need.
“I am now analyzing what services I may not be able to offer this season, as I will not have the staff to do it all,” Sarah Diment, owner of the Beachmere Inn on the southern coast of Maine, said during a congressional hearing Wednesday on H-2B visas. “Staff removed from one area to help in another means we will not be able to offer all programs.”
Immigration laws are in the spotlight on Capitol Hill as the Senate pushes forward on a comprehensive reform proposal, parts of which are intended to boost the economy by bringing in more high-skilled and low-skilled workers to fill gaps in the labor force.
Jane Nichols Bishop, president of Peak Season Workforce on Cape Cod, Mass., helps small firms navigate the application process for seasonal workers. She told lawmakers that dozens of her clients are still waiting for H-2B approvals, and already, many of them have been forced to scale back their operations; some are closing restaurants one day per week, and others are taking available hotel rooms off the market.
The delay was only the first of two setbacks for H-2B employers this year.
Application processing resumed only after the government issued a new rule on the prevailing wages H-2B employers are required to pay their workers. On average, the rate is now about 30 percent higher, and that new minimum for H-2B employers applies to all their employees, not just their foreign workers in the visa program.
The ruling came down on April 24, effective immediately. Officials elected to skip the typical 30-day commenting period to avoid further processing delays.
Business owners who had already set summer prices had no time to adjust for the spike in operating costs.
“We determine room rates by December,” Diment said. “We cannot change the rates to accommodate a wage increase in the largest department in our inn.”
Critics of the H-2B program have argued that it takes jobs away from Americans and drives down wages. William Spriggs, chief economist for the AFL-CIO, applauded the Labor Department for raising the wage minimums for the H-2B program, which are now set at the average compensation for every occupation.
He said paying below-average wages to foreign workers drives down compensation for Americans in those same positions, and it encourage employers to seek non-native employees even if U.S. citizens are available.
“Demand for these jobs has seasonal variation, but to young people looking for entry-level positions, these are good steps,” Spriggs said.
Diment agreed that her company had once been well suited for college students seeking summer employment, but increasing pressures on students to take internships and shorter summer breaks have made recruiting on campuses nearly impossible in recent years.
“Housekeeping is no longer a job that is valued nor sought by college students,” she said.
If it were, Diment said, she would happily staff her hotel through the summer with American workers. She pays more than $3,000 in agency fees and $17,000 more to U.S. Citizenship and Immigration Services to hire foreign workers through the H-2B program.
She said the hotel has always paid equal wages to native-born and non-native workers and at a higher rate — between $9 and $10 per hour — than the $7.50-per-hour minimum wage in Maine. The new wage formula used by the Labor Department has pushed her firm’s minimum wage even higher.
“This is a complicated and expensive program to use, but it’s one that has been able to fulfill our seasonal needs and support our American workers,” she said.