The bill has been introduced by Senators Chuck Grassley, Chairman of Senate Judiciary Committee, and Dick Durbin, Assistant Democratic Leader. It is co-sponsored by Senators Bill Nelson, Richard Blumenthal, and Sherrod Brown.
"The H-1B visa programme was never meant to replace qualified American workers, but it was instead intended as a means to fill gaps in highly specialised areas of employment that cannot be filled by Americans," Grassley said.
There is a sense of urgency for Americans who are losing their jobs to lesser skilled workers who are coming in at lower wages on a visa programme that has gotten away from its original intent, he said.
"Reform of the H-1B visa programme must be a priority," Grassley stressed.
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The bill would prohibit companies from hiring H-1B employees if they employ more than 50 people and more than 50 per cent of their employees are H-1B and L-1 visa holders.
"For years, foreign outsourcing companies have used loopholes in the laws to displace qualified American workers and facilitate the outsourcing of American jobs. The H-1B and L-1 Visa Reform Act would end these abuses and protect American and foreign workers from exploitation," Durbin said.
The bill would also give the Department of Labour enhanced authority to review, investigate and audit employer compliance as well as to penalise fraudulent or abusive conduct.
It explicitly prohibits replacement of American workers by H-1B or L-1 visa holders.
The Grassley-Durbin reform bill will for the first time prioritise the annual allocation of H-1B visas.
In addition, the bill includes establishment of a wage floor for L-1 workers, give authority to the Department of Homeland Security to investigate, audit and enforce compliance with L-1 programme requirements, provide assurance that intra-company transfers occur between legitimate branches of a company and do not involve "shell" facilities and a change to the definition of "specialised knowledge" to ensure that L-1 visas are reserved only for truly key personnel.