A Brief History of Schedule A: The United States’ Forgotten Shortage Occupation List

High-skilled labor shortages threaten the United States’ ability to compete internationally with both adversaries and allies in major industries, such as manufacturing and high technology. Many countries, like the United Kingdom and Canada, have adapted their immigration systems to make them as attractive to the limited global pool of highly skilled workers as possible, but the United States has not.

Experts on both sides of the aisle are developing solutions to make it easier to bring high-skilled workers to the United States, but immigration reform is an unfortunately divisive subject on Capitol Hill. Efforts to enact comprehensive immigration legislation have failed. In the meantime, regulatory tools which are already in place can make our immigration system more responsive to labor shortages. One of these tools is the Department of Labor’s (DOL) Schedule A list, today located at 20 C.F.R. § 656.5.

Schedule A aims to provide a regularly updated, data-driven list of occupations that, in DOL’s view, are experiencing labor shortages. Employers hiring in Schedule A occupations may more easily bring foreign workers permanently to the United States to fill those jobs.

Usually, when a U.S. employer wants to permanently hire a foreign worker, the employer has to prove to DOL that it attempted to hire a U.S. worker for the job and that there are not enough U.S. workers who are “able, willing, qualified, and available to accept the job opportunity.” This is called the permanent labor certification process, or PERM, and must be completed before filing a permanent residency, or “green card,” application with the U.S. Citizenship and Immigration Services (USCIS). To get a PERM certification, an employer must define the duties and minimum requirements of the open position; submit a prevailing wage request to DOL, which says the employer will pay the foreign worker the same wages as U.S. workers who are similarly employed; place multiple recruitment ads to try to hire a U.S. worker for the position first; and then file forms with DOL detailing the employer’s efforts. Obtaining a PERM certification can take between four and ten months.

Schedule A allows employers to largely bypass this process because DOL has already determined that the occupations on the list do not have enough U.S. workers able and willing to do them. This means that employers only must obtain a prevailing wage determination and submit the proper forms to USCIS. If the employer uses DOL Occupational Employment Statistics (OES) data in their prevailing wage determination application, the process takes between twenty-six days and three months. If employers use a non-OES data source for their wage determination application, the process can take from one month to a little over three months.

Yet despite its promise, the list is largely untouched today. In fact, Schedule A has not been updated in thirty years and currently includes only physical therapists and nurses. This paper provides a novel look into the regulatory history of Schedule A and explains how Schedule A went from an innovative way to attract skilled talent to an unknown and ignored fragment of the U.S. immigration system.

I. Schedule A’s Humble Beginnings

Schedule A was created by the Immigration and Nationality Act of 1965 during a time of great technological advancement and international competition. It established a list of occupations that the Secretary of Labor designated as in shortage, which allowed U.S. employers to more easily bring over skilled workers from other countries. The Secretary of Labor was given the authority to revise this list “at any time upon his own initiative or upon a written petition of any person requesting the inclusion or omission of any occupation or the modification of the application of the Schedule to any geographical area and setting forth reasonable grounds therefor.”

At first, Schedule A contained three different groups of occupations through which foreign workers could be admitted. Group I included:

Persons upon whom an advanced degree has been conferred at least equivalent to the Master’s degree conferred by accredited U.S. colleges and universities and who have been gainfully employed for at least two years in an occupation related to and dependent upon their area of academic specialization. Among physicians and surgeons, certification by the Educational Council for Foreign Medical Graduates may be substituted for two years of gainful employment.

Group II included “[p]ersons whose education or experience is equivalent to the baccalaureate degree conferred by accredited U.S. colleges and universities in the following specialties:

• Aeronautical Engineering
• Chemical Engineering
• Electrical Engineering
• Electronic Engineering
• Library Science
• Mathematics
• Mechanical Engineering
• Metallurgical Engineering
• Metallurgy
• Nuclear Engineering
• Organic Chemistry
• Pharmacology
• Physical Chemistry; and
• Physics.”

Group III included professional nurses who were qualified to work in the state or territory in which they intended to reside.

II. Expansion in the Late 1960s to the Early 1970s: The Addition of a Prevailing Wage Requirement and Growth of Groups I, II, and III

Between 1969 and 1971, a series of revisions were suggested, which included requiring that immigrants’ Schedule A designation be renewed each year, shifting internal responsibilities for reviewing applications and denials, changing the occupations included in the groups, and specifying the proper wages for Schedule A workers. Though definitive documentation of the approval of all these changes are not mentioned in subsequent issues of the Federal Register, we do know that after these changes, Group I expressly included recipients of a doctor of philosophy (or an equivalent). The regulations also specified that physicians and surgeons must submit evidence of completing all the educational requirements for licensure and completing a medical internship or residency, when required.

The November 17, 1970 Federal Register notice proposed the most changes to Schedule A, all of which were adopted in early 1971. New requirements were added to regulate Schedule A workers’ wages and the occupations covered by the rule were changed. Specifically, wages paid to foreign workers could not negatively impact American workers in similar positions and must abide by the Davis-Bacon Act, the McNamara-O’Hara Service Contract Act, or the National Foundation on the Arts and the Humanities Act of 1965.

The Davis-Bacon Act requires that prevailing wages be paid to construction workers and mechanics on all federally-funded public works projects that cost over $2,000. These wages are based on determinations made by DOL which take into account the wages and fringe benefits paid to various types of laborers and mechanics that are employed on specific construction projects in the area. These wage determination surveys are conducted by DOL annually. The McNamara-O’Hara Service Contract Act requires contractors and subcontractors to pay prevailing wages on “prime contracts in excess of $2,500.” For contracts costing less than $2,500, employees must be paid federal minimum wage. Lastly, the National Foundation on the Arts and the Humanities Act of 1965 specifies that organizations which receive grants from the National Endowment for the Arts must pay its performers and construction workers no less than the minimum prevailing wage as determined by DOL.

If none of these acts are applicable for the positions listed in Schedule A, the prevailing wage must be determined “in accordance with the current criteria established pursuant to the Davis-Bacon Act,” wherein employment includes:

• Fringe benefits that are provided to U.S. workers similarly employed;
• Prevailing working conditions and customs in the area of employment regarding “board, lodging, and other facilities”; and
• Does not involve positions that are vacant due to strikes or labor disputes, any discrimination of protected classes, or work contrary to federal, state, or local law.

Group I was also changed to include those with a Ph.D. or master’s degree in “dietetics, medicine and surgery, nursing, pharmacy, and physical therapy.” All other STEM-related fields were removed without explanation. Group II now included those with a bachelor’s degree or an equivalent combination of education and experience in “dietetics, nursing, pharmacy, and physical therapy.” Group III was overhauled to include:

• Persons “of any religious denomination whose regular profession or occupation is to conduct religious services, which he is authorized by his denomination to perform, and who is seeking admission to the United States in order to engage principally in such work”;
• “Any person of any religious denomination having a religious commitment, such as a Monk, Nun, Brother, Missionary, and others, who is seeking admission to the United States to perform the duties required of him by virtue of such commitment”; and
• “Any other person seeking admission to the United States to perform duties related to the nonprofit operation of a religious organization,” if those duties took more than fifty percent of that person’s time.

III. Changes in the Late 1970s and Early 1980s: The Addition of Group IV and Arguments to Expand Schedule A

In 1976, DOL proposed to change Schedule A again, renaming its regulatory citation from 29 C.F.R. § 60 to 20 C.F.R. § 656. A provision was added outlining employers’ responsibilities to conduct a good faith search for U.S. workers before recruiting immigrants. In addition, Schedule A was expanded to include “persons of exceptional ability in the sciences and arts and certain intracompany transferees.” Intracompany transferees, who were temporarily working in managerial or executive positions or “positions requiring specialized knowledge,” were placed in an entirely new Schedule A group, Group IV. Those of exceptional ability in the sciences or arts replaced the previous occupants of Group II. Pharmacy, medicine and surgery, and nursing were removed from the list in full and any occupations in dietetics and physical therapy below a master’s degree were also eliminated. The prevailing wage guidelines were also changed to specify that any wages not covered under the Davis-Bacon or McNamara-O’Hara Service Contract Acts must be within five percent of the average wage of similarly employed U.S. workers.

The first discussion of public comments regarding Schedule A appeared in early 1977. DOL made several changes to their 1976 proposal based on these public comments. Schedule A was revised to include physical therapists that have bachelor’s degrees, but performing artists were removed. The term “specialized knowledge” for intracompany transferees was deleted from Group IV for being too vague. In addition, the period of time that employers needed to spend recruiting U.S. workers was cut in half to thirty days. Interestingly, a cohort of respondents from Texas were concerned that the removal of nurses from Schedule A meant that no foreign nurses would be admitted into the country at all, but DOL assured them they could enter with other visas. DOL also clarified language for Group II occupations, which require persons admitted through this policy “be so far above the average members of their field that they will clearly be an asset to the United States.”

The next set of changes to Schedule A were proposed in early 1980 and subsequently adopted. This was the first year that nurses returned to the list, but only for specific geographical areas which were to be designated by the Secretary of Labor. Nurses also needed to pass the Commission on Graduates of Foreign Nursing Schools exam to ensure they could achieve state licensure. Dieticians were removed from the list at the request of the American Dietician Association, which consulted with the U.S. Office of Personnel Management and the American Hospital Association to determine that there were sufficient numbers of U.S. workers willing and able to work as dieticians. Physical therapists were required to take additional classes before being licensed in the United States, though they were no longer required to have a bachelor’s degree.

DOL noted that Group IV, which is intended for intracompany transferees, was being abused by foreign investors and U.S. branches set up by foreign businesses “primarily to facilitate immigration.” To mitigate this, Schedule A was amended to specify that a prospective immigrant using Group IV would have to prove that they were employed by the sponsoring organization for at least one year outside the United States. In addition, the prospective immigrant had to qualify for an L-1 visa for temporary nonimmigrant intracompany transferees as a manager or executive in the sponsoring organization. The sponsoring organization would also have to prove it had been doing business in the United States for at least one year prior to the submission of the prospective immigrant’s application.

Later that year, DOL received several comments that could affect arguments for new additions to Schedule A. For example, some comments advocated for the preservation of dieticians on the list. DOL countered that though dieticians had been removed, “[t]his will not preclude an employer from filing a request for an individual labor certification and making a test of the particular local labor market in which the job is located” outside of Schedule A. Universities also requested that “aliens of exceptional ability, but who do not have international acclaim, be included on Schedule A.” DOL wrote this response:

The National Research Council requested that Schedule A be modified to include scientists and engineers who possess a doctoral degree, and who show clear potential for future acclaim or recognition, and who have accomplishments in highly specialized or technical fields. The standards for Schedule A precertification of aliens of exceptional ability in science or art (so-called ‘Group II’ aliens) under the current regulations do preclude many scientists and artists from qualifying for precertification. Many of these aliens are excluded because they have not received internationally recognized prizes or awards; some are not members of associations requiring outstanding achievements of their members . . . DOL has determined that international acclaim however, is a reasonable indicator of exceptional ability for Schedule A to facilitate the admission of those aliens whose immigration to the United States would benefit substantially the United States economy, culture, security, or welfare. Since a Schedule A precertification is granted without regard to the individual alien’s impact on the U.S. labor market, the standards for precertification must be high enough to assume against the displacement of, or adverse effect on, U.S. workers . . . Setting the receipt of a doctoral degree as sole grounds for Group II certification would include some aliens lacking exceptional ability, and exclude others who have exceptional ability.

If these specifications for exceptional ability sound familiar, it is because Group II and its requirements were the precursor of the EB-1 visa that is used today. The transition to the EB visa system arose from the Immigration Act of 1990 and used a lot of the Schedule A Groups as a framework for the EB-1 and EB-2 visas. This is described in more detail in Part V.

In early 1981, DOL issued a Notice of Proposed Rulemaking (NPRM) to add “certain Canadian railway workers who have qualified for employment through seniority rights under a collective bargaining agreement” to Schedule A. This is the most specific proposed change in Schedule A’s history at this point. The agency explains that several international railway companies operated lines crossing the United States-Canadian border and through their collective bargaining agreements, both senior Canadian and American employees could bid for jobs on either side. If American employees bid for jobs in Canada, the government could issue an employment authorization similar to Schedule A’s labor certification. However, this authorization would only be issued if Canadian citizens were treated reciprocally in the United States. Thus, the agency proposed adding these railway workers to Schedule A to ensure that Americans could more easily find work in Canada. In mid-1981, DOL extended the comment period to gather more input, but by 1984 the agency received so many negative comments that it withdrew the proposed rule, saying, “It has been determined that the labor certification process and rulemaking by DOL are inappropriate means for resolving this immigration issue.”

IV. Mid-1980s: The Removal of Physicians from Schedule A

Two years later, DOL issued another NPRM to remove alien graduates of foreign medical schools from the Schedule A list. Up to this point, physicians could enter the country through Schedule A with certification from a Department of Health and Human Services (HHS) Regional Health Administrator that they would be employed in a geographic area designated by HHS to have a physician shortage. The removal of physicians from Schedule A stems from a 1984 letter from HHS to the Assistant Secretary of Labor for Employment and Training saying that an internal HHS study concluded there were major issues with the policy. Those issues include:

• “Neither the Congress or HHS recognizes the existence of a national shortage of physicians in the U.S.;
• Methodological problems exist in developing and keeping accurate information for inadequately served areas for other than the primary care specialties;
• The recent HHS Report to the President and the Congress on the Status of Health Personnel in the United States indicated that the aggregate number of physicians in the United States is projected to exceed requirements in 1990 and 2000;
• Scarce [Public Health Service] resources for this activity, given its apparent limited utility; and
• Less than one-third of the physicians certified remain for any significant amount of time providing direct patient care in the shortage areas for which they were certified.”

In mid-1987, DOL issued a final rule officially eliminating physicians from Schedule A with the caveat that any physicians of exceptional ability could apply to enter the United States through Schedule A Group II. However, many of the comments submitted to the 1986 proposed rule pushed back against the elimination of physicians from Schedule A. The six commenters were unnamed in the Federal Register notice except for the American Immigration Lawyers Association (AILA). These statements made assertions countering HHS’ conclusions, including:

• There was insufficient public data proving that less than one-third of physicians remain for any significant time administering patient care;
• The fact that Congress nor HHS recognized a national physician shortage was irrelevant because Schedule A provides precertifications not on a national basis, “but only for area shortages by specialty”; and
• A rule should be implemented to require that physicians who enter the United States through Schedule A commit to providing medical service in areas with a shortage of doctors for a certain amount of time.

The agency countered these arguments in detail, citing data from HHS’ report, Labor Certification of Foreign Physicians Under Schedule A – An Assessment of Program Impact, which found only twenty-nine percent of physicians admitted in 1981 and 1982 were practicing in the locations for which they were certified by 1984. The agency also noted that employers could file individual labor certifications on behalf of a physician in the future. It further explained:

There are a number of occupations which are probably in short supply for one or more areas, although the national supply/demand factors are in approximate balance. However, physicians are the only occupational group on Schedule A which provides for certification by shortage area rather than on a national basis. It is preferable that employers meet the needs of shortage areas under the basic process rather than under Schedule A.

Interestingly, this statement is in direct contradiction to their requirements for nurses established just seven years earlier in 1980. As described previously, nurses were removed from Schedule A from 1976 to 1980. When nurses were placed back on the list, DOL specified that they could be admitted to the United States with a Schedule A certification only if that certification was based on a labor shortage in a specific geographical area. DOL does not provide an explanation as to why this contradiction exists. The agency, though, did consider keeping physicians on Schedule A and implementing commitments for physicians’ service. However, it had “serious reservations concerning its authority to issue certifications contingent upon conditions being fulfilled after the alien began the certified employment.”

V. The Early to Mid-1990s: Effects of the Immigration Act of 1990 on Schedule A

The next changes made to Schedule A were proposed in 1991 after the enactment of the Immigration Act of 1990. The major change as a result of this act was the elimination of Schedule A’s Groups II, III, and IV, which covered aliens of exceptional ability, religious workers, and intracompany transferees. Instead of a confusing system of immigration groups, the Immigration Act of 1990 created five Preference Groups for employment-based (EB) permanent residency:

1. Priority Workers (EB-1);
2. Professionals with Advanced Degrees and Aliens of Exceptional Ability (EB-2);
3. Skilled Workers, Professionals, and Other Workers (EB-3);
4. Special Immigrants (EB-4); and
5. Employment Creation (EB-5).

DOL argued that the creation of the Priority Workers Preference Group, which includes “aliens with extraordinary ability in the ‘sciences, arts, education, business, or athletics which has been demonstrated by sustained national or international acclaim and whose achievements have been recognized in the field through extensive documentation’” effectively absorbed Schedule A’s Group II. As for Schedule A’s Group III, the Immigration Act of 1990 set aside only 5,000 visas per year for religious workers, so DOL thought it would be “inconsistent with Congressional intent” to maintain its own category of special immigrants. Schedule A’s Group IV was included in the Priority Worker Preference Group so DOL proposed to also remove them from the list. Without Groups II, III, and IV, the Schedule A list would now only include physical therapists and nurses.

The interim final rule was posted on October 23, 1991, retaining Group II in response to numerous comments which advocated for keeping it. Group II was ultimately kept because of concerns that some immigrants of exceptional ability that would qualify for Group II would not be able to qualify for the new Professionals with Advanced Degrees and Aliens of Exceptional Ability Preference Group.

VI. 1990–1994: The Ill-Fated Labor Market Information Pilot Program

Additionally, with the passage of the Immigration Act of 1990, a new pilot program was started to study if labor market data could be used to fast-track the applications of immigrant workers in shortage occupations. The study, called the Labor Market Information (LMI) Pilot Program, would determine whether there were labor surpluses or shortages in ten defined occupational classifications. The LMI program was launched because the permanent labor certification process, which includes Schedule A, was “both lengthy and costly” and took an average of nine months to complete. The study would consider occupations that have previously been determined as in shortage and “labor market and other related information.” If an occupation was deemed in shortage through the LMI program, a permanent labor certification would be issued. If an occupation was in surplus, a permanent certification would only be issued if the employer could prove that they had conducted unsuccessful but extensive recruiting efforts for U.S. workers.

The LMI program was also created as an alternative to establishing a points-based immigration system. The points-based system was proposed in several bills in 1989 but was ultimately abandoned as labor unions, immigrants’ rights groups, and DOL objected to the idea because it, respectively, would add competition for U.S. workers, impose an English-language requirement that was deemed discriminatory, and overestimate the government’s ability to match immigrant workers to labor market needs.

Interestingly, DOL had considered using data to evaluate labor shortages prior to the start of the LMI program. The agency explained:

Historically, during the late 1960’s and 1970’s, Schedule A was the product of an extensive process of economic and labor market analysis of employment demand and supply conducted by DOL national office staff. The occupations were initially identified through the application of factors such as: Unemployment rates; occupational projections; evidence submitted by trade associations, employers and organized labor; and technical reviews by Federal and State staff with expertise in these areas. The occupational listings in the schedule were reviewed and modified at regular intervals to reflect changing economic and labor market conditions and to prevent adverse impact on the wages or working conditions of U.S. workers.

DOL also tried to use data to determine labor shortages in the 1980s and 1990s, with the help of Dr. Malcolm Cohen and Dr. Arthur Schwartz. The methodology that was created to select the occupations included aggregating 13,000 occupations listed in the Dictionary of Occupational Titles into 193 groups, and then using seven labor economic indicators. Those indicators included:

• “A composite index based on labor market conditions for the occupational group from 1986–1989.
• The average amount of training time required for the occupations in the group, based on the SVP [Specific Vocational Preparation] in the Dictionary of Occupational Titles.
• The average number of permanent alien labor certifications for the group per 100,000 members of the labor force from 1990–1992.
• The average annual employment change for the group from 1989 to 1991.
• The average unemployment rate of the occupational group for 1990 and 1991.
• The growth or decline projected by the Bureau of Labor Statistics for the occupational group from 1990–2005 (moderate forecast assumption).
• Average annual wage change in the occupational group from 1989 to 1991.”

The occupational groups were ranked on a scale of one to seven for these indicators. Occupations with a score of twenty-eight or higher (more in-demand) were selected for further consideration. Then specific states were chosen which have an average of three or more permanent alien labor certifications per one thousand members of the labor force between 1990 and 1992. States with a total of ten or more certifications in fiscal year (FY) 1992 were chosen for the final list. The final list of shortage occupations and geographical areas included:

However, at the end of these studies, DOL decided not to follow through with the methodology Dr. Cohen and Dr. Schwartz developed due to concerns about its reliability. No further details about these concerns can be found.

When the LMI program was started in the early 1990s, DOL was so hesitant to perform the study because of its prior opinions of Dr. Cohen and Dr. Schwartz’s work, a congressional committee and a lawsuit were needed for the agency to complete the analysis. The proposed regulations that arose from the LMI program were published in the Federal Register in March 1993 but prompted backlash from all sides. Labor groups claimed the proposed rules would make it too easy to hire foreign workers. Others argued that the positions identified as in shortage in the LMI program actually had a surplus of available U.S. workers.

During the comment period prior to the start of the LMI program, DOL also received a number of specific requests for occupations to be placed on the pilot list, including “[u]niversity teachers/researchers, physical therapists, radiation oncology technologists, nurses, occupational therapists, live-in domestic workers, software engineers, long-haul truck/tractor drivers, and artists with exceptional ability.” After all of the research and comments from interested outside groups, the LMI program expired quietly in 1994 without any of its conclusions implemented.

Conclusion

Throughout its existence, Schedule A underwent numerous changes to adapt to the circumstances surrounding the immigration system and the economy of the time. As regulatory history has shown, DOL previously used detailed data to determine the occupations included in Schedule A but has stopped. Thus the list has not been updated in almost thirty years. When it was created in 1965, Schedule A was intended to help the U.S. overcome labor shortages and compete with its international allies and adversaries for limited skilled talent, the same issue the country is facing today.

The power of the Schedule A list comes from the fact that it is intended to be backed by a thoughtful collection of labor market indicators which determine whether hiring needs for certain occupations cannot be adequately met by the U.S. workforce alone. DOL used to collect more detailed data on these types of indicators but abandoned the effort in the 1980s as its costs grew. Today, economists and policy experts debate what data and methodology should be used to determine if an occupation is experiencing a labor shortage. DOL has options though, and can look at previous attempts to determine shortages, or even efforts conducted by our closest allies. Dr. Malcolm Cohen of the University of Michigan explored this issue in the late 1980s and early 1990s and developed a thorough methodology for DOL that was never adopted. A more current example that the United States could look to is the United Kingdom’s Migration Advisory Committee, which is an independent body that advises the United Kingdom government on immigration issues and periodically reviews its own Schedule A equivalent called the Shortage Occupation List. Schedule A is likely going to make the most impact if it includes occupations where shortages can cause significant economic or national security consequences, such as artificial intelligence practitioners, where a skills shortage is backed by compelling evidence. It is recommended that this evidence be explored further by a transparent, data-driven collection of shortage indicators prior to its admission to Schedule A.

It is important to note, however, that adding occupations to the Schedule A list is only one piece of a larger puzzle of immigration policies. While Schedule A has the potential to help alleviate labor shortages in the United States, it is only used for immigration applications with permanent labor certifications. This means that Schedule A designations only apply to green cards, such as EBs. These visas also have strict caps and competition for them is fierce. It would not, for example, significantly help the hundreds of thousands of Indian and Chinese immigrants already in the United States on H-1B visas and waiting potentially decades in the green card backlogs. While legislative reforms to the U.S. immigration system are preferable, as it would be difficult to make a dent in the green card backlogs even with a Schedule A expansion, they are exceedingly rare. The last major reform was thirty years ago, in 1990, and the legislative reform before that was in 1965. Each political party has already assumed that if they want to make any changes to the U.S. immigration system, they will likely have to use the power of the executive branch. Though it is only one part of a larger, much needed package of immigration reform proposals, expanding Schedule A is an action that can be taken in the short term to start addressing U.S. labor shortages that threaten the country’s international competitiveness and national security. Other countries, like the United Kingdom as mentioned above, are already taking advantage of a Schedule A-like system and seeing real benefits. It is time for the United States to do the same.