J-1 Physician Legislation Introduced in the United States Senate

Thursday, May 4, 2017 - 10:00am
Jan Pederson

On April 10, 2017, Senator Amy Kloubuchar (D. Minnesota) introduced a bill, S. 898, in the United States Senate which would significantly improve the situation of J-1 Physicians and their employers in America.  Jan Pederson and Denise Thomasson, attorneys at Maggio + Kattar, were proud to have been advocates for this legislation on Capitol Hill. Although a companion bill has not been introduced in the House, there is support for a bill similar to the Senate bill.  In order to ensure the bill’s success, it is necessary for current and former J-1 physicians to express their support for the bill by writing to their Senators and Congressperson.  Even if a person cannot vote, it is still possible for them to have a voice politically. Maggio + Kattar invites J-1 physicians, employers of J-1 physicians, and physician recruiters to organize support for this legislation and to support further immigration improvements.

Maggio + Kattar is pleased with the provisions of the bill and see it as a first step to obtaining improvements in the valuable State 30 J-1 Physician waiver programs.  The introduction of any beneficial bi-partisan immigration legislation has been rare in recent years.  This bill enjoys the support of Republicans and Democrats, but stakeholders’ support of the bill is still required for its success.

The bill can be accessed at S. 898.  The main provisions of the bill include:

Extension Of Conrad State 30 Program

This provision would extend the Conrad State 30 J-1 Physician Waiver Program until September 30, 2021.  (It is currently due to expire on April 28, 2017.)

Increase In Number Of Waiver Slots To A Maximum Of 50

The number of J-1 Physician Waiver Slots would increase from 30 to a maximum of 50 per state if the elevator provisions are triggered.  The elevator provisions are triggered for the next fiscal year when 90% of all waiver slots are used by states who used five waiver slots for the year.  There are also provisions which decrease the amount of waiver slots if the demand decreases, but the number will never decrease below 30 slots per year.

Comment:  This formula is drafted on the assumption that there are waiver jobs available in all states and that all states have the same waiver rules.  For example, New Jersey typically uses only a few waivers per year because of their very restrictive rules and because the program is not user friendly.  We do not know what the demand in New Jersey would be if employers were not deterred from requesting waivers.   Colorado is user friendly, but doesn’t have 30 jobs as is the District of Columbia.  Thus, it would appear the better language would be an individual state requirement where each state is evaluated as a stand alone, , ensuring that the high demand states can better meet the demand in their state for waivers.  There is much hidden demand for waivers because either the paperwork and processes are lengthy and cumbersome or because employers and physicians believe that they don’t have a chance for a waiver slots and don’t even try to obtain a waiver slot.  In analyzing the waiver usage for the past three fiscal years, it appears that the elevator clause would not even be triggered.  The motive is laudable, but unlikely to result in more waivers.

The solution to the increasing shortage of waiver slots is for federal agencies who can issue an unlimited number of waivers to increase participation in the waiver programs.

Employment Commencement Date 

Clarifies the date employment must start after the waiver is granted, providing flexibility in the employment start date.  The waiver employment start date can be ninety (90) days after USCIS approves the waiver; OR ninety (90) days after residency/fellowship completed; OR ninety (90) days after being granted H-1B status, provided the employer petitions for such status no later than 90 days after the physician completes approved graduate medical education.

Physician Protections When Waiver Employment Is Terminated

The bill provides for three different ways in which a transfer between waiver jobs can be achieved when the employment with the original waiver employer is terminated, making it less cumbersome and anxiety producing when the waiver job does not work out.  The bill would grant a grace period of up to 90 days between job termination and the filing of the H-1B transfer petition with the new employer. This welcome change will provide J-1 waivered physicians more time to locate transfer employment and obtain licensure in another State if the transfer is to another State.  The new permissible grounds of transfer would be, if enacted into law, the following:

  • Demonstrating Extenuating Circumstances to USCIS.  This provision is close to current law, but provides a ninety (90) grace period between employment termination and the filing of an H-1B transfer petition by the new employer.  The examples of “extenuating circumstances” in the bill include more examples than the current law.  The examples include employer  violations of the employment agreement or of labor and employment laws but still leaves the final decision to USCIS to decide whether the reasons are sufficient to qualify for extenuating circumstances;  OR
  • State 30 Program Letter.  If the State 30 Program which recommended the waiver attests that extenuating circumstances exist justifying the early termination of employment and transfer, then the physician may transfer to a waiver job in any state. If a transfer is sought under this section, the physician is granted a ninety (90) grace period between termination and filing the H-1B transfer petition with a new employer; OR
  • Physician terminates employment.  If the physician terminates employment for any reason, the transfer employment must be in the state which granted the waiver and the physician must agree to work an additional year beyond the three year waiver commitment for each transfer.  There is only a 45 day grace period under this section and the transfer employment must be in the same state which granted the initial waiver.

H-1B Cap Exempt Physicians 

Clarifies that all physicians who are granted a J-1 waiver through either the Conrad State 30 program or any federal interested government agency are cap exempt physicians, without regard to whether the employer is cap exempt.

Relief For Physicians Not Granted A State 30 Waiver 

If a physician is not granted one of the 30 slots for a state, the physician can obtain employment authorization for up to six months after training ends but only if the physician files a State 30 waiver in another state which has not used its 30 slots.  Employment is authorized only for the second waiver employer and only until a decision is made by USCIS to deny the waiver or USCIS approves the waiver and application for H-1B status.

Comment:   This remedial measure is not helpful to the initial and presumably desired employer who invested substantial sums of money in recruiting and filing for the initial waiver.  The purpose of the Conrad State 30 program would be better served if the physician were authorized to work for the initial employer whose waiver application was not selected due to lack of State 30 slots until the next State 30 cycle in the same state was completed. 

New Contract Terms

The biggest change for many employers and physicians is that a Conrad State 30 waiver employment contract may not contain a non-compete clause (which currently prohibits a physician from working in the same geographical area for a specified number of years if a physician’s employment is terminated). Existing rules permit each state Department of Health to determine whether non-compete clauses will be permitted.  The bill would prohibit the non-compete clauses in all states. 

Recapture Of Waiver Slots When Physician Transfers To Another State  

If the employment relationship is terminated and the physician transfers to employment in another state, the state which granted the waiver from which the physician is departing will recapture the waiver slot for use in granting a waiver to another physician for use in the same fiscal year.

Comment:  This is a provision which state Departments of Health have long supported and is long overdue.  While the language is not clear, we presume the recapture period is limited to the three year waiver employment period.  However, as the language is unclear, it might be argued that the recapture provision is valid forever.  In practice, the recapture is largely illusory as in order for the recapture to occur, the granting of the waiver, the commencement of employment of the physician, the termination of the employment of the physician and the commencement of employment in another state must all occur in the same fiscal year, which is unlikely as a practical matter.  For example, Dr. X is granted a waiver by the Connecticut Department of Health on October 1, 2016 to begin work on July 1, 2017 at Employer A in Connecticut.  Dr.  X commences employment with Employer A on July 1, 2017; quits employment with Employer A on August 10, 2017 and commences employment in New York with Employer B on August 11, 2017.Then the Connecticut Department of Health would recapture the waiver slot I tused on Dr. X, but would only have a few weeks to award it to another physician.  To improve this situation, the language should be amended to permit a state to recapture a number if it loses the physician to another state at any time during the three year commitment and should permit the employer who lost the physician to have the right of first refusal of the recaptured number.

Inclusion Of Academic Medical Centers 

The bill provides for an additional three waivers for academic medical center positions without regard to whether the academic medical center is located within a medically underserved area.

 J-2 Dependents Of J-1 Physicians Not Subject To The Two-Year Home Residence Requirement

This is a position long held by immigration attorneys and will finally be enshrined if the bill is enacted.  This provision is supported by GME programs, employers and physicians.  While generally  families stay together, there are situations where the J-1 physician wants to return home for two years, but for professional reasons, the J-2 spouse wants to remain in the United States.  Under this provision, the spouse is not subject to the home residence requirement and would be eligible for H-1B status or other appropriate status without the two year albatross.

Visa Eligibility 

The bill will reduce the risk that physicians seeking a visa to take medical credential examinations, or who are applying for J visas and express a future intention to apply for a J-1 waiver, will be denied visas by requiring the Department of State to amend the Foreign Affairs Manual to provide that these acts, standing alone, are not grounds to deny the visas under Section 214(b)(intending immigrant) of the INA.  This is a very welcome change to both physicians, the ECFMG and graduate medical education program directors who have all had the experience of losing a physician to the sting of a visa denial under 214(b) of the INA, which cannot be appealed.