Apr. 11, 2004 - New England resorts are bracing for a possible staffing shortage this summer, one that some businesses fear could have a severely negative effect on the quality of their service, and on their bottom line. 

For the first time, the government has stopped issuing a popular seasonal worker visa because a congressionally mandated cap has been reached. 

In Rhode Island, much of the multimillion-dollar tourist industry seems to have been spared. At least for now. But some individual business owners are concerned. 

"It seems that those of us in Newport may have dodged a bullet this year," said Tim O'Reilly, chief executive of Newport Harbor Corporation, which owns a string of hospitality businesses. 

Next year, those in the industry say, the competition among businesses for staff could be fierce. 

"It might almost be a battle of the perks," said Randy Fabricant, a bed-and-breakfast owner on Aquidneck Island. 

H2-B visas, given to foreign nationals for periods of up to a year, are commonly used by summer and winter resort employers in New England, even though the process of obtaining them is time-consuming and expensive. 

Besides the $130 cost of filing, applicants pay a $1,000 "processing fee" per job description to ensure quick service. 

On March 9, the U.S. Bureau of Citizenship and Immigration Services issued a statement saying that no more H2-B's would be approved until Oct. 1, which is the start of the government fiscal year. 

The sudden restriction on this type of visa is shining a spotlight on the degree to which businesses rely on foreign workers. Winter resorts in northern Vermont hire Canadian ski instructors. Hotels on Block Island and in Newport hire Jamaican chambermaids. Young people from Poland, Slovakia and the Czech Republic wait tables, staff receptionist desks, and chop vegetables on Cape Cod. 

"I think you'll see some businesses close down because of the dependence on this type of labor," O'Reilly said. 

It is an arrangement that many say is mutually beneficial: employers get reliable, inexpensive labor, and workers make more money than they could at home. 

The pay rate -- which is set by state labor departments -- is usually more than the $6.75 minimum wage, said Tessie Salabert, coordinator of employment and training programs at the Rhode Island Department of Labor and Training. 

This year, slightly more than 700 foreign nationals applied for H2-B visas in Rhode Island alone, up from about 600 last year, according to the Department of Labor and Training. How many of those people will actually receive their visas is not yet known, because the last of the applications have yet to be processed by the federal government. 

Most Rhode Island businesses contacted by The Providence Journal said they had already received approval and expected their foreign staff to arrive on schedule. 

But for Brad Panciera, who oversees a 112-room hotel, two restaurants and a bar as the general manager of Pleasant View Inn in Westerly, the cap means that five Bulgarian women who have worked for him for the last several years will not be coming this year. 

He described the women, who worked as waitstaff and bus people, as dependable and hard-working. 

"They come with the mindset that they are here to work," Panciera said. 

Kathy Szabo, the director of the Block Island Chamber of Commerce, said she, too, will lose out this year, because her application for a Canadian employee has been turned down. Part of the problem, Szabo said, is that applications can't be filed until 120 days before the worker's arrival date. 

Szabo fears that the quality of customer service will suffer if the Canadian woman, who has staffed the busy Chamber of Commerce office in years past, cannot work helping newly arrived tourists get oriented. 

"If the cap is not increased, many businesses will not be able to serve the public the way they should . . . ," Szabo wrote in an e-mail. "If we cannot meet the demand of the tourists, they will go elsewhere for vacation." 

BY LAW, businesses must first advertise the jobs locally before they are granted visas for foreigners. Employers give similar theories as to why Americans, even in slow economic times, are not clamoring to fill these positions. 

The long May-to-October season at New England resorts does not suit American students, many of whom return to schools in August. And for many local young people, summer means fun and relaxation, not hard work for middling pay. 

"This country does a great job educating its citizens," said Greg Stone, owner of the Lighthouse Inn on Cape Cod. "They don't want to clean toilets and do dishes." 

In places such as Newport, the housing market is too tight for American low-income earners, who unlike foreign workers are typically supporting families here, one hotel manager said. 

"The housing situation is atrocious in Newport. They can't afford to live here," said Judy O'Connell, the general manager of the Mainstay Inn in Newport. For the season, eight Jamaicans who received visas to work at the hotel will live in a two-bedroom apartment. 

"They don't mind it," she said. "They're just so happy to be here." 

Others say that Americans simply don't work hard enough for an industry that runs on sweat. 

"Local help is just really nonexistent," said Fabricant, the bed-and-breakfast owner. "A good portion [of Americans] just don't want to work, or want top dollar for doing very little or no work." 

This is the first time since Congress instituted the annual cap of 66,000 H2-B visas in 1992 that that number has been officially reached. While the government maintains that an increase in demand has been the only factor driving the numbers, many employers feel that the climate of heightened security has contributed. 

O'Reilly, whose business got its 20 visa approvals just days before the cutoff, said in prior years, the federal immigration authorities had a more "casual, laissez-faire" attitude toward the visa applicants and let in more than the cap allowed. 

After the Sept. 11 terrorist attacks, O'Reilly said, "they just decided to enforce it." 

Chris Bentley, spokesman for the U.S. Bureau of Citizenship and Immigration Services, denied that. 

"There is absolutely no new enforcement initiative this year," Bentley said. While the government is giving closer scrutiny to each applicant, he said "that has nothing whatsoever to do with the cap." 

Whatever the cause, tourism businesses in New England need relief, owners say. Several bills that would significantly raise the cap -- one sponsored by Massachusetts Sen. Edward M. Kennedy -- are pending in Congress. 

In the meantime, people like Szabo on Block Island and Panciera in Westerly say they will have to muddle through. 

"It's not going to help us this year," she said. 

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(c) 2004, Providence Journal, R.I. Distributed by Knight Ridder/Tribune Business News.