“It's really a disaster out there.”
That was the consensus from trainer Rick Violette and a panel of attorneys at The Albany Law School's 18th annual Saratoga Institute on Equine, Racing, and Gaming Law Conference Tuesday. The panel checked in on what has and hasn't changed since last year's conference examined the complexities of immigration and labor in horse racing.
The H2B visa program, which allows immigrants from certain countries to fulfill a seasonal need for workers, is still the most commonly-used program by trainers to keep their shedrows running. Panelists agreed there still aren't enough of those visas released to cover the country's needs. There are 66,000 H2B visas split between two 'seasons' each year. Attorney Leonard D'Arrigo of Whiteman, Osterman and Hanna said the United States Citizenship and Immigration Services (USCIS) raised the cap by 15,000 in 2017 and 2018 but did it so late in the year that most employers had already been shut out for that season's visas.
The number of applications for H2B visas routinely exceeds the number available. As of May, the Department of Labor received 142,000 applications for the first 33,000 visas of 2018, according to D'Arrigo.
“This year, for the first time, the Department of Labor and USCIS instituted a random lottery system, so that employers that filed during a certain week would be dumped into a pot and then 33,000 were selected out of that pool of visas,” he said.
As recently as 2015, there was an exemption for returning workers who had previously been given H2B visas, so they could be approved with minimal screening and their H2B visas didn't count against the cap. That provision expired in 2016 and it seems unlikely it will be reinstituted.
Although there haven't been any sweeping changes to immigration law in the last 12 months, the panel agreed things have gotten tougher for employers and employees who rely on H2B.
“The legal framework has remained the same. In general, the laws haven't changed, the regulations haven't changed, but the thing that has changed is President Trump issued the Buy American, Hire American executive order in early 2017 and that created a lot of internal changes within USCIS,” said Lucrecia Knapp of Harter, Secrest and Emery. “I saw a statistic the other day that said request for evidence for H1Bs that are being adjudicated by USCIS are now at 69 percent. That's a huge increase. I think it's something like a 41 percent increase from early 2017. The practical application of that for an employer is you need to do some more advanced planning.”
Meanwhile, D'Arrigo said US Immigration and Customs Enforcement have shifted their focus from immigrants with a criminal background to employers as they look for I-9 violations, which can cost $300 to $16,000. Violations may include missing or falsified paperwork, which is a challenge if a worker presents an employer with a convincing forgery.
“We're seeing an unprecedented level of enforcement going on,” said D'Arrigo, who said there have already been 5,200 I-9 audits this year. “They do target certain industries. They target the horse racing industry, where they know the records won't be as stellar as they are in a multinational corporation when you're operating out of a stable. They know where to find people.”
Violette said it's not within most trainers' grasp to hire a skilled immigration attorney to navigate these issues. Some may not realize they need counsel when ICE comes knocking at their office door, but even if they do, most are going to “boiler plate shops that frankly, are horrible.”
In the midst of this ever-shifting landscape, there are two misconceptions Violette said he's tired of hearing. One of them is that U.S. citizens are losing out on jobs to H2B visa workers.
“We have to advertise when we petition for these employees,” he said. “If we get an application [from an American], if they last two days, it's miraculous. It is a total myth that these employees displace American workers. There are no American workers.”
The other misconception is that trainers would have an easier time finding citizen labor if they just paid a little more for it, and that trainers prefer foreign labor because they can pay less for it. Instead, Violette said federal regulations require him to pay what USCIS calls a prevailing wage, calculated by job and region. In Saratoga, the USCIS prevailing wage is $11.84 per hour for grooms up to 40 hours a week, after which they get time and a half. (National minimum wage is $7.25, while New York's minimum wage is $11.00 per hour.)
A member of the audience asked the panel, particularly Violette, whether a higher wage would attract more workers. Wouldn't it help to offer $15 per hour?
“No. Not even a little bit,” Violette said. “It's the early hours, the rainy weather, the mucking the stall. They can find other means of employment without having to do a lot of those menial jobs. It's not punitive labor. They are real jobs with real benefits, with health programs, with pensions. It really isn't the money.”
D'Arrigo echoed the trainer – in his experience, landscaping companies routinely advertise jobs at $16 to $17 per hour in the capital region and still struggle to find domestic applicants.
From where Violette sits, the future looks bleak. He said he spends as much as $5,000 to get each of his H2B workers going between transportation costs for them, legal costs, application fees. He has heard trainers say they'd like to see racetrack positions exempted from the H2B program so they won't have to compete against the hotel, restaurant, and other agricultural industries. Of course, those much larger industries would like the same thing and have more lobbying cash to push for their interests.
In the meantime, Violette said ICE raids in Saratoga in the past couple of years have put everyone on the backstretch on edge. This year, he had employees request to stay at Belmont Park, not because they could be deported in the event of an ICE raid, but because they didn't want to be harassed by federal agents.
“They're legal,” he said. “They just don't want to deal with it.”
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