Unemployment rates and the H-2B visa cap are affecting resort hospitality business - by Earle Wason

Unemployment rates and the H-2B visa cap are affecting New England’s resort hospitality business. The unemployment rate in New England has been steadily dropping since July of 2012, and as of April this year it has ranged for the four Northern New England states from NH’s low of 2.8% to Massachusetts high of 3.9%. That’s good news for employees, but it’s having a negative impact on employers in industries like hospitality that rely on seasonal help. The decreasing pool of unemployed or underemployed New England residents means that these businesses cannot find the staff they need within the state, and must rely on workers from abroad. However, the recent restrictions put on the H-2B visa program, which allows employers to hire workers from other countries on a temporary basis, has put a strain on the pool of foreign resources as well. 

Help From Abroad
The H-2B visa non-immigrant program permits employers to hire foreign workers to come temporarily to the United States and perform non-agricultural services or labor on a one-time, seasonal, peak load or intermittent basis. Many businesses are dependent upon foreign workers, especially in areas with a small year-round population like the Lakes/Mountains Region of New Hampshire, the Berkshires of Massachusetts and the Coast of Maine. They’ve used the H-2B program to help keep their businesses afloat in the peak seasons, but since the federal government put a cap on how many people can apply for H-2B visas, the workers have been harder to find.

There is a statutory numerical limit, or “cap,” on the total number of foreign nationals who may be issued an H-2B visa or otherwise granted H-2B status during a fiscal year. Currently, Congress has set the H-2B cap at 66,000 nationwide per fiscal year, with 33,000 for workers who begin employment in the first half of the fiscal year (October 1 - March 31) and 33,000 for workers who begin employment in the second half of the fiscal year (April 1 - September 30). Any unused numbers from the first half of the fiscal year will be available for employers seeking to hire H-2B workers during the second half of the fiscal year. However, unused H-2B numbers from one fiscal year do not carry over into the next. 

Feeling the Pinch
Lack of staffing is hurting revenue and operations. One owner of a large New Hampshire restaurant property said he had to close 30% of his dining room due to lack of kitchen staff. Another owner of an oceanfront hotel said he had his best and worst year ever, with record revenue while being consistently understaffed. He took rooms out of inventory and went on to explain that minimum wage was not an issue; he was offering $15 - $20 an hour for housekeepers. A third owner of a property even stated that they were pulling front of the house managers to work on the kitchen line. While some businesses are getting H-2B employees, they aren’t getting enough to fully staff their operations. As a result, they sometimes have to turn down business offers simply because they don’t have the manpower. 

Not only is it hard for the employers to find the help, but it’s even harder to adhere to the new regulations regarding the employment of H-2B holders, which were outlined in a 104-page ruling produced by the departments of Labor and Homeland Security in April 2016. “There is a lot of paperwork to fill out,” said Sim Willey, the owner and operator of Hart’s Turkey Farm in Meredith. He said he uses both an agent and an attorney to help him with the process. Last year, he got all 15 full-time H-2B visa holders he requested.

According to Willey, the H-2B employees are crucial to business when tourists flood the Lakes Region in the summer, not only to Hart’s but to a lot of hospitality businesses in the area. He went on to say that when the economy was poor back in 2009 and the unemployment rate was at 6.6 percent, local people were available to fill seasonal positions. Now that the economy is rebounding, there aren’t as many Granite Staters available to fill the positions. “As the economy gets better, it’s extremely important (to have H-2B workers available),” Willey said. 

George Copadis, commissioner of the New Hampshire Department of Employment Security, further explained the issue. He said that with the unemployment rate at just 3.1%, when 3% is considered full employment, there are only about 24,000 in New Hampshire collecting unemployment at this time. He also explained that in the middle of the recession, New Hampshire had to borrow money from the Federal government in order to cover unemployment demand. Since then, that money has been returned and the trust fund now has a huge surplus. Additionally, two years ago at a major job fair, there were 1,100 jobs available and 900 people showed up to interview. At the same job fair this year, the same number of jobs were available and only 300 people attended. This shows a clear need for additional workforce in the state, giving the economy the fuel to sustain and flourish.

To ensure the future of New England’s industries that rely on seasonal work, with unemployment rates at their lowest in recent history, the cap must be raised on these H-2B visas. Hopefully, our senators and congressmen are aware of this need, and more importantly, citizens and businesses are using their individual and collective voice to communicate this issue at a state level.

Earle Wason, CCIM, author of “Buying Smart in a Tough Economy” is president and owner of Wason Associates Hospitality Real Estate Brokerage Group, Portsmouth, NH.

Wason has brokered more than 150 hospitality transactions over the past 15 years and has fostered excellent relationships within the Northeast hotel industry. Wason has devoted a significant portion of his career to the commercial real estate industry and has held the CCIM designation since 1985.