How new H-1B visa reforms will trouble IT firms
For a lot of IT firms, the H-1B visa program has been a worthy source for talent. This program gives 85,000 visas to foreign workers every year, based on a lottery system. However, this system has been facing controversy, many believe that due to these visas, jobs of American workers are replaced by foreigners. Also, it causes an administrative burden which has had a limiting effect on which companies apply.
As of April 1, the U.S. Citizenship and Immigration Services (USCIS) has instituted changes to the H-1B visa program aimed at making the application process more efficient and shifting the selection process in favor of applicants with U.S. master’s degrees.
The proposed policy changes could do more harm than good, by narrowing the job possibilities for international students, stopping spouses of H1-B visa holders from getting work authorization in the US and kicking tech talent out of the US to Canada.
Focusing on advanced degrees, making the process efficient
Instead of splitting H-1B applications into two groups, with applicants with undergraduate degrees competing for 65,000 visas and those with advanced degrees competing for the 20,000 remaining, applicants will be combined into a single group, from which 65,000 visas will be drawn by lottery, with the USCIS selecting 20,000 workers for the advanced degree exemption from the applications left over.
“This is great for companies who want to increase the percentage of people with advanced degrees, but not so great if you’re an Infosys or a Cognizant or another giant IT firm like that who’s hiring mostly people with undergraduate degrees,” says Richard Burke, president and CEO of Envoy Global, a global talent acquisition firm.
From April 2020, an electronic registration system with a shorter version of the H-1B visa application will also make it easier and faster for companies to fill out applications.
Only if your application is selected in the lottery you will then be required to fill out registration information in full. This should help reduce the cost of applying, says Penni Bradshaw, partner with Constangy, Brooks, Smith & Prophete and board-certified specialist in immigration law, and potentially open the process to companies who may not have wanted to pay the roughly $2,460 to file an application for an H-1B visa, not to mention the expenses to have a law firm help prepare the application on pure gambling of receiving one.
Over the last two years, there has been much greater scrutiny of companies that recruit and hire H-1B talent, says Burke, as well as a rise in the number of case denials. That’s sowing seeds of uncertainty and anxiety among workers and among companies that rely on this talent, especially in IT, he says.
“By government statistics, rejections have increased fourfold. It used to be you’d see about 6 percent of applications rejected, and now that’s up to 24 percent,” he says.
“This is now a far more difficult process than it used to be. This is a dramatic shift, and it’s increasing the difficulty for these companies exactly at the same time other regulations are being loosened to benefit businesses. We have the demand, we need the talent, we know this brings in noteworthy and valuable diversity — so what’s going on isn’t logical,” Burke says.
“It’s a mess for employers right now; it’s really challenging. The administration obviously wanted to push this ‘buy American, hire American’ executive order, which didn’t end up passing, but they wanted to have a chilling effect on employers who hire foreign nationals, and that’s definitely working,” she says.
Visa approvals to Indian companies declined by 49 percent last year, with only 22,429 visas granted to the top five IT firms as against 43.957 in 2017, as per a research report by CARE ratings.
In addition to the increased denials, two recent and proposed legislative changes to the H-1B visa program could also negatively impact businesses, says Bradshaw.
The Optional Practical Training (OPT) program, which allows international students on F-1 study visas with STEM degrees from Student and Exchange Visitor Program (SEVP)-certified and accredited US colleges and universities to work for up to 36 months in the U.S. was reinterpreted by the USCIS in 2018 to require STEM graduates to work in-house at their employer’s facilities, not at third-party client sites.
This change, which troubled IT services companies and management consultancies, met industry pushback that had an effect in forcing clarification. Ultimately it has not impacted any F-1 visa holders or their employers.
The second proposed change to the H-4 work authorization program may also have negative consequences for employers. Started in 2015 under President Obama, the H-4 program allows spouses of H-1B visa holders to work in the U.S. A proposal to strip away this program is moving forward, says Burke, but there’s currently no final decision from USCIS.
If this change becomes law, it will have a significant effect on many companies’ ability to recruit and hire foreign national talent, Burke says. In fact, some of Burke’s clients are considering their options in Canada and in other countries, instead, given that Canada’s immigration policies are more hospitable and easier to navigate.
While Canada, the UK and Australia are all becoming more welcoming to foreign national tech talent that would otherwise land in the U.S., Bradshaw says some companies are trying other creative solutions to hiring talent using different types of visas.
Tech companies are making clear that they cannot get enough U.S.-born STEM talent, and they need to access foreign nationals to fill vacant roles, increase competitive advantage and drive innovation. But the uncertainty and anxiety caused by the administration’s crackdown on H-1B visa applicants are having a chilling effect, Burke says.