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Clark Hill 2024 Automotive & Manufacturing Industry Outlook: Immigration

March 20, 2024

The Opportunities and Limitations of the TN Visa as a Potential Solution to the Automotive and Manufacturing Industries’ Labor Shortage

The US Labor Shortage

The latest analysis from the US Chamber of Commerce confirms what those in the Automotive and Manufacturing Industries know all too well: the US is facing a labor shortage that was worsened by the Covid pandemic and the resulting Great Resignation. The US Chamber of Commerce estimates that if the rate of labor force participation were at its pre-pandemic level, there would be an additional 2.1 million people in the US workforce today.

One of the most heavily impacted industries is durable goods manufacturing, where US Department of Labor data analyzed by the US Chamber of Commerce showed that 30% of job openings were unfilled as of January 2024. As of August 2023, the US Department of Labor was reporting that 616,000 job openings in the manufacturing industry (both durable and nondurable goods) were unfilled.

One Potential Solution: The TN Temporary Work Visa

Post-Covid shutdowns, the US borders are once again open to entry by foreign workers, who no longer have to show that their entry is in the national interest or document their Covid vaccination status. As automotive and manufacturing businesses try to fill the gaps in their workforce, they may consider sourcing workers from Canada and Mexico.

The USMCA (formerly known as NAFTA) is a free trade agreement that provides for the employment-based TN visa, which is limited to qualified Canadian or Mexican citizens entering the US to work in one of the specific job categories listed in the agreement. The categories most frequently used by the automotive and manufacturing industries include Engineers, Industrial Designers, Scientific Technicians/Technologists, and a variety of Scientists (Biologists, Chemists, Animal/Dairy Scientists, among others).

TN vs. H-1B Visa

Unlike the enormously popular H-1B visa, the TN is not subject to a numerical restriction (or “Cap”) and is available year-round. Qualified Canadians can apply for admission in TN status directly at a port of entry to the US, receiving work status the day of the application.  Qualified Mexicans can apply for the TN visa at a US Consulate in Mexico. The process to obtain TN status is typically faster and less costly than the H-1B, and TN status is extendable indefinitely in 3-year increments, whereas the H-1B visa is limited unless the employer sponsors the employee for a green card.

Another key difference from the H-1B visa, which is reserved for professional occupations requiring at least a bachelor’s degree, is that the TN visa includes an occupational category that requires less than a bachelor’s degree, specifically the Scientific Technician/Technologist occupation. Provided that the Scientific Technician/Technologist is directly supporting the work of a degreed professional who manages them, a Canadian or Mexican worker can qualify for the TN visa with just 2 years of training in a relevant educational program, including technical and vocational training programs. As a result, the TN visa provides an opportunity to sponsor foreign workers for skilled, non-professional roles that are commonly difficult to fill, including Maintenance Technicians and Equipment Engineering Technicians.

TN Limitations

The TN is not a visa designed to fill low- or un-skilled labor roles and may not be used for production workers. Employers are cautioned to ensure that the job qualifies for TN status and the employee works in the position described in the TN application.

While the TN visa does not provide a path to fill all the jobs on the manufacturing floor, it may be an option to help automotive and manufacturing employers make a dent in the skilled and professional openings at their US operations.

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.

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