Utilizing the H-2B program today is a costly and time-consuming process because it involves several agencies, including the Department of Labor and the Department of Homeland Security. These departments are slowing down the process and imposing regulations that make business even more difficult during a critical time for employers.
Both the Department of Labor and the Department of Homeland Security recently suspended processing H-2B visa applications for a month. Although processing was restarted in late April, this suspension caused a backlog. Our small businesses expecting their H-2B workers to arrive before Memorial Day are still waiting for final decisions and now are short-staffed during their peak season. This is causing a strain on their existing resources and impacting profitability.
In addition, a recent regulatory change recalculated wages for H-2B workers. Businesses that have received new wage rates from the Department of Labor since the new rule was implemented are seeing an average wage increase of 32.3 percent according to a nationwide survey. The impact of the increased costs is especially significant for small businesses that have already set their seasonal rates or have existing contracts.
For example, tourism is one of the leading industries in my district and the high season is well under way. From April to August, Myrtle Beach hotels, resorts, restaurants, and other tourism-related businesses are welcoming vacationing guests from across the country. Some of the hotels in my district rely on H-2B workers. These hotels factor the H-2B worker labor costs in their operating budget, which ultimately determines how low and high they can set their seasonal room rates in order to make profit.
To guarantee a successful season, many of these hotels presell rooms before peak season begins and before the H-2B workers arrive. The new wage rate imposed by the Department of Labor has increased hoteliers’ operating budgets significantly, leaving the hotels that presold rooms with no way to make up the cost difference. The government cannot continue burying our small businesses in regulations and changes that affect their profitability at such a critical time.
The H-2B visa program is crucial to the viability of our small businesses and we must ensure that it is not regulated out of existence. During my subcommittee’s hearing this week we will examine the affects the H-2B program has on our economy, the tourism-industry, and our labor force; and what the House of Representatives can do to make sure this program strengthened and available to the employers that rely on it annually.
Rice, elected to the House of Representatives in 2012, represents the 7th Congressional District of South Carolina. He serves on the Small Business, Transportation and Infrastructure, and Budget committees.