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H-1B Visas: Come and Get 'Em?

Thursday, September 29, 2011

The H-1B concert used to be sold out the day tickets went on sale, leaving many prospective attendees peering in, watching the fun from outside. No more; H-1Bs aren’t exactly going begging now, but neither is demand dwarfing supply.

According to Citizenship and Immigration Services (CIS), the H-1B program exists to allow U.S. businesses “to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields, such as scientists, engineers, or computer programmers.” Traditionally, software firms, both American and foreign-owned, have been the biggest filers of H-1B petitions.

For much of the 00s, scarcity was the rule as demand for H-1Bs far outstripped supply. The current cap on new H-1B visas is 65,000, with an additional 20,000 cap for individuals who have earned a master’s (or higher) level degree from a U.S. institution. Of the 65,000 “regular cap” visas, 6,800 are set aside under the terms of free-trade agreements with Chile and Singapore. Unused numbers from this group go back in the pool. There are also exemptions from the cap for universities and certain non-profit and governmental organizations dedicated to research.

For fiscal year 2012 (filing started on April 1, 2011, for the October 2, 2011 start date) only half of the regular 65,000 number had been filled by the second week of September. The slowdown in H-1B petitions began in fiscal year 2009 and accelerated in 2010 and 2011. For fiscal year 2011, the cap was not reached until January 26, 2011, nearly 10 months after filing began. This is a far cry from 2007 when filings exceeded the cap figure on the fiscal year’s first day, and over 133,000 packages were received on the first two days. That year, H-1B petitions were placed in a lottery, and it was luck of the draw that determined whether some highly qualified and sought after workers were plying their trades in the U.S. or abroad.

The dominant factor in the fall in H-1B petitions appears to be the sluggishness of the U.S. economy. H-1B workers are supposed to supplement, not supplant, U.S. workers, hence the need for wage certification through the Department of Labor. As demand for workers has weakened, many U.S. tech employers have been able to satisfy their labor needs with U.S. workers without incurring the time, expense, inconvenience and uncertainty that come with filing an H-1B petition for a foreign worker. The fact that petitions have plunged with the weakening economy suggests that H-1Bs were never depriving Americans of jobs, or driving down wages as has been charged by the program’s opponents.

The economy is no doubt a factor in the decline in H-1B petitions, but not the only one by a long shot. A sharp rise (a $2,000 bump actually) in 2010 in fees for companies which employ more than 50 people, and have 50 percent or more of their workforce composed of H-1B visa holders didn’t help. Nor has the capriciousness of USCIS and officials at U.S. consulates. It is not unheard of for the H-1B petition to be approved, and then for the worker to have his or her visa denied at the consulate on trivial or irrelevant grounds. Moreover, the interpretation of “specialty occupation” seems to have become more stringent, denying some well credentialed and highly qualified individuals trained in business, social sciences and liberal arts the opportunity to work for U.S. companies. There has also been extra scrutiny given to applications filed by small companies, in contradiction to a policy change designed to encourage H-1B visas for entrepreneurs.

To return to the issue of economy, for foreign nationals who wish to work in the U.S., the slowdown in hiring has, of course, been a bad thing. The Ph.D. student who, upon completion of his or her studies, might have at one time been weighing several job offers, may now receive not a single one. The upside is that, for those who do receive a job offer from a U.S. company, there is far less competition for visa spots, and hence not the same level of urgency in submitting the petition.

To be sure, complacency is not in order, as the cap is still being reached and H-1B petitions are being examined ever more stringently. Despite the ongoing struggle of the H-1B process, approval rates have been roughly constant over the last three years. In FY 2008, the national approval rate was 78.8 percent, in FY 2009 73.5 percent and in FY 2010 79.7 percent. However, the rate of Requests for Evidence (RFEs)—in which the petition is not denied outright, but delayed until further documentation is produced to the satisfaction of CIS—have shown unpredictable ups and downs: FY 2008 16.7 percent RFE rate; FY 2009 26.1 percent; and FY 2010 20.6 percent.

For the companies seeking to employ H-1B workers, and for the workers themselves, the current situation appears to be a one step forward, one step backward affair. Are things better than they were five years for H-1B visa seekers? Hard to say, although they are probably not worse.

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