U.S. immigration law awards a limited number of EB-5 visas to foreign entrepreneurs who create at least 10 U.S. jobs. The program is not perfect, and Congress is considering reauthorizing the program while also adding reforms intended to prevent abuse. Unfortunately, a provision buried away in that draft legislation threatens to make the program almost unworkable.
On its surface the provision seems reasonable. EB-5 visa holders can invest in America through approved “regional centers.” These regional centers then invest in U.S. enterprises. The draft legislation requires these regional centers to put in place policies: “that are reasonably designed to ensure that the regional center and any associated new commercial enterprises and job-creating entities comply with Federal labor laws.”
It sounds innocent enough, if redundant. All U.S. businesses must already comply with Federal labor laws. However, this provision would discourage most investors from using regional centers at all. Currently regional centers pool investment capital from foreign entrepreneurs to invest in local enterprises. These enterprises legally employ their workers; the regional centers do not.
Recently the National Labor Relations Board (NLRB) declared that any business that exercises “potential” “unexercised” or “indirect” control over another business’ employees jointly employs those workers. The degree of control required to ensure compliance with Federal labor law would make regional centers “joint employers” under this new National Labor Relations Board standard.
This would force regional centers to directly collectively bargain with unions at enterprises they have invested in. It would also enable unions to pressure the regional centers to bypass a secret ballot election and recognize unions through card-check. These changes would make investing in America through regional centers much less attractive. It would be like making a bank the co-employer of the workers of every small business it invested in. That bank would invest in a lot fewer small businesses.
Taxpayers spend billions each year to enforce compliance with Federal labor laws. Enlisting EB-5 centers to do the same would drive investment and entrepreneurs away from America.
