New research shows the spouses of H-1B visa holders represent a significant pool of untapped talent who could work in the United States with a few strokes of the regulatory pen. The U.S. government has sidelined many highly educated professionals, primarily women, who could contribute to the American economy.

In 2015, Obama administration officials made the moral and economic choice to allow the spouses of H-1B visa holders to work in the United States. Under a Department of Homeland Security (DHS) regulation, if an H-1B professional husband or wife has an approved immigrant petition (I-140), a key step in obtaining an employment-based green card, a spouse in H-4 dependent status is eligible for an employment authorization document (EAD). The rule also applies if the H-1B professional has waited a year since the filing of an I-140 petition or permanent labor certification and was extending H-1B status beyond 6 years.

“While this regulation has benefited many spouses, their families, and the U.S. economy, it is much more restrictive than Canada’s rule, which grants work authorization to all spouses of skilled workers,” according to Madeline Zavodny in a new National Foundation for American Policy (NFAP) analysis.

Canada grants work authorization to the spouses of all skilled foreign workers, notes Toronto-based immigration attorney Peter Rekai. He points out Canada has gained international students and highly skilled immigrants due to the country’s more favorable immigration policies compared to the United States.

Indian graduate students in science and engineering declined by nearly 40%, between 2016 and 2019, according to an NFAP analysis. At the same time, Indian students increased by 182% at Canadian colleges and universities. During negotiations on the recently-passed CHIPS Act, Sen. Charles Grassley (R-IA) blocked measures to create an exemption to annual green card limits and backlogs for foreign nationals with a Ph.D. in STEM [science, technology, engineering and math] fields and those with a master’s degree “in a critical industry.”

The 2015 regulation made two primary arguments in favor of granting work authorization. First, it would help employers and the United States attract and retain highly skilled foreign nationals on H-1B visas. Second, the regulation stated, “The rule also will bring U.S. immigration policies concerning this class of highly skilled workers more in line with those of other countries that compete to attract similar highly skilled workers.”

It’s clear to employers, attorneys and analysts that the 2015 rule on H-4 EAD did not go far enough since 1) it allows only a select group of spouses of H-1B visa holders to gain work authorization and 2) the rule fails to grant spouses the ability to work “incident to status” (i.e., no requirement for a separate filing). As a result, the 2015 rule does not bring the U.S. immigration policies in line with Canada’s approach to the spouses of high-skilled foreign workers. U.S. policy remains much more restrictive.

“There is no legal reason USCIS [U.S. Citizenship and Immigration Services] cannot issue a new regulation and grant work authorization to the spouses of all H-1B visa holders,” said Jon Wasden, a partner at Wasden, Bless & Forney, in an interview. “USCIS certainly has the authority to extend the ability to work to all H-1B spouses. And making employment authorization for spouses ‘incident to status’ would avoid the gaps in employment that spouses have suffered due to USCIS processing delays. It would allow spouses to retain the ability to work so long as the principal H-1B visa holder remains in status.”

Madeline Zavodny believes the current USCIS regulation prevents many highly educated individuals, primarily women with a STEM education, from working in and contributing to the American economy. Zavodny was an economist at the Federal Reserve Bank of Atlanta (and Dallas) and is now an economics professor at the University of North Florida in Jacksonville.

Zavodny estimates almost 90% of the spouses of H-1B visa holders have at least a bachelor’s degree, and over half have a graduate degree, based on American Community Survey data (2017-2019). “Almost half of spouses of likely H-1B visa holders who have a bachelor’s degree had a STEM-related major. Among spouses of likely H-1B visa holders who are employed, 42% are working in a STEM field.”

Zavodny estimates 90% of the spouses of H-1B visa holders are female, two-thirds are from India and 6% are from China. The data show a strong desire to work among the spouses of H-1B visa holders.“The United States can reap significant economic benefits, ease labor shortages, and attract more workers in the global competition for talent if it expanded current rules on work eligibility for the spouses of H-1B visa holders,” according to Zavodny.

A change in the USCIS regulation would bring immigration policy for the spouses of H-1B visa holders in line with the spouses of L-1 (intracompany transferees) and E-1 (treaty trader), E-2 (treaty investor) and E-3 (specialty occupation worker from Australia). Work authorization for the spouses of L-1, E-1, E-2 and E-3 visa holders is “incident to status.”

Attorneys note extending work authorization to more H-1B spouses and making it “incident to status” would relieve USCIS of a significant processing burden the agency has been unable to meet.

In response to employment gaps among the spouses of H-1B visa holders attempting to renew their H-4 EADs, USCIS recently provided an automatic extension of up to 540 days. Noah Klug of the Klug Law Firm has noted a potential pitfall for employers and spouses in the USCIS automatic extension policy. Klug said that under USCIS policy, the H-4 EAD extension can only last up to the date of validity of an I-94 Arrival/Departure Record, and an H-4 spouse might be out of luck if the I-94 validity period is lapsing. It can take 5 to 7 months for I-94 extension approvals.

Klug sees situations where an employer filling out an I-9 form (for work eligibility) will find that an H-4 EAD extension filing doesn’t get the full 540 days but only the date up to the validity of the H-4/I-94. Since the H-4 EAD extension and I-94 extension are typically filed concurrently, this will could mean that an H-4 spouse does not benefit from the automatic EAD extension because their I-94 is expiring on the same date as their EAD, according to Klug.

In an agency policy alert (dated November 12, 2021), “USCIS believes that these changes will help to avoid gaps in employment authorization and documentation for those H-4, E, and L dependent spouses with an EAD renewal application that does not first require adjudication of an underlying application.” However, an I-94 is an example of “an underlying application.” (Emphasis added.)

“This is a real thing,” said William Stock of Klasko Immigration Law Partners in an interview. “This just came up for the H-4 spouse of a client whose H-1B was extended, but the H-4s are no longer premium processed with the H-1B, so the spouse’s H-4 and EAD applications are still pending. The spouse is willing to travel and reenter with her husband’s extended H-1B so that her H-4 I-94 has been extended, even though that trip will be inconvenient for her and her employer.”

Stock is unsure if the current USCIS automatic extension policy will satisfy all employers. “At a minimum, it’s ambiguous enough that an employer may not be comfortable relying on the auto-extension. It has meant a lot of dual career couples will need to plan for a premium-processed H-1B extension, then a trip for the spouse to get the H-4 extended to match the H-1B, and then to file an employment authorization document renewal to argue their status was one that allowed the EAD to be issued.”

While it’s possible critics of H-1B visas will oppose extending work authorization to more spouses, employment authorization documents work the way those critics say they wished the H-1B visa category worked. “H-4 spouses who have an EAD can work for any employer, which enables them to find a better match for their skills, to their own benefit and the benefit of the overall economy,” writes Zavodny. “Having an EAD also allows H-4 spouses to start their own businesses that will ultimately create jobs for others, which is an additional net gain for the overall economy.”

“If allowed to work,” Zavodny concludes, “these spouses would make considerable contributions to the U.S. labor market as most of them would enter occupations with very low unemployment rates and high job vacancy rates.”