Applications for H-1B Visas Drop for First Time in Years

With the H-1B lottery over, it’s time to consider alternatives for FY 2018

Roy Maurer By Roy Maurer April 19, 2017
Applications for H-1B Visas Drop for First Time in Years

The number of H-1B visa petitions for fiscal year (FY) 2018 fell below 200,000 this year for the first time since 2014, U.S. Citizenship and Immigration Services (USCIS) announced.

The agency received 199,000 H-1B petitions during the filing period this year, far surpassing the statutory cap of 85,000 visas for fiscal year (FY) 2018 but falling short of recent years' hauls. 

USCIS received 236,000 H-1B visa petitions in 2016, and 233,000 in 2015. 

"While there was a slight drop in petitions this year, it's clear that demand continues to outpace supply for H-1B visas," said Dick Burke, president and CEO of Envoy, an immigration services firm based in Chicago. "Companies can't bank their talent strategy on a lottery with a 1 in 3 chance of receiving a visa."

A computer-generated random selection process selected enough petitions to meet the 65,000 general-category cap and the 20,000 cap under the advanced degree exemption.

The agency will now begin sending notifications for petitions selected in the lottery and rejecting and returning petitions—together with the associated filing fees—that were not chosen.

H-1B visas allow foreign workers with in-demand skills to spend up to six years working at a U.S. employer that sponsors them. The visas are especially popular in Silicon Valley to fill technology and engineering positions.

The reasons for fewer petitions this year are unclear, but may be related to uncertainty about the future of the H-1B program and immigration, Burke said.

President Donald Trump has promised to overhaul the program to ensure that U.S. workers are not being displaced, especially by foreign outsourcing companies that consistently file large numbers of applications each year.

Some speculate that a reason for the decline is that those outsourcers—who typically apply for far more than they actually plan on using in order to better their odds of being selected in the lottery—held back this year. "I don't think the demand is lower, either from outsourcers or from direct employers," said Bruce Morrison, the chairman of the Morrison Public Affairs Group in Bethesda, Md., and a former congressman from Connecticut who helped author the legislation in 1990 that created the H-1B visa. "I don't think there were ever 230,000 jobs that were going to be filled."

William Stock, a founding partner of Klasko Immigration Law Partners in Philadelphia and president of the American Immigration Lawyers Association, added, "Companies that hire engineers to handle other businesses' programming needs may have filed fewer applications."

Vishal Sikka, the CEO of Infosys, an Indian software services company and one of the largest beneficiaries of H-1B visas, said in an April 13 earnings call that the company is looking to reduce its dependence on the coveted visas and will instead expand hiring and training of U.S. workers to "mitigate any potential risks from visa regulations in the U.S."

H-1B Alternatives

There are other options to keep valued foreign workers in the U.S. Alternative visas include:

  • For Canadian and Mexican professionals performing certain kinds of work, TN visas under the North American Free Trade Agreement.
  • For intra-company transferees, L-1 visas. If an organization has foreign operations, this visa permits employees to transfer to the U.S.-affiliated company in a similar position if they have worked abroad for the foreign parent, subsidiary or affiliate continuously for at least a year within the preceding three years as an executive or manager or in a specialized-knowledge capacity.
  • If the employer is enrolled in E-Verify and the individual has a degree from a U.S. college or university in a science, technology, engineering or math field, the optional practical training extension.
  • For those who may qualify under extraordinary ability criteria, the O-1 visa.
  • For nationals of Australia, the E-3 visa.
  • For nationals of Chile or Singapore, the H-1B1 visa.
  • For essential employees if the foreign investor employer and foreign national employee of the employer share the same nationality, the E-2 visa.
  • For those with F-1 status, continue with F-1 studies and look at internship opportunities under curricular practical training.
  • For individuals entering a structured training program, the H-3 visa.
  • For individuals who can be categorized as an exchange visitor, the J-1 visa.

If there's time, an employer might pursue an employment-based green card on behalf of a worker, but that option will depend on many factors such as the individual's present situation, the applicable immigrant visa quota they would fall into, and their country of birth.

"We have seen a substantial increase in green cards this year with some companies starting the process before their immigration policy dictates," Burke said. "This is something more companies are looking into, but they should be aware of the risk of relying on this strategy."

Concurrent employment is another option. Under H-1B program rules, foreign workers can be employed by both a cap-subject employer and one that isn't, such as a university or research institution. As long as one employer is cap-exempt, the worker will not count against the cap.

U.S. Companies 'Losing Ground'

The Society for Human Resource Management reported in 2016 that 68 percent of HR professionals are experiencing difficulty recruiting candidates for full-time positions, with science and technology fields being the most difficult high-skilled positions to fill. 
"The bottom line is that there is clearly a large skills gap in the U.S., with the Bureau of Labor Statistics predicting that there will be 1.4 million more software development jobs than applicants who can fill them by 2020," Burke said.

"U.S. employers are losing ground in the highly competitive global talent marketplace and a random lottery for H-1B visas does not help," said Lynn Shotwell, executive director of the Council for Global Immigration, a nonprofit trade association seeking to advance employment-based immigration of high-skilled professionals. "H-1B visas can be a vital tool for employers to access top global talent, drive innovation and spur economic growth, creating more jobs for U.S. workers," Shotwell said. "As the reform debate moves forward, we must advance a system that is innovative, fair and competitive for employers and employees. We should embrace solutions that reflect market demand and prioritize visas for employers who invest in U.S. workers."

Trump signed the "Buy American, Hire American" order April 18 that directs federal agencies to review and propose changes to the H-1B visa program.

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