Cap on H1-B Visas and its Effects | DCR Workforce Blog

Cap on H1-B Visas and its Effects

Creating employment in a sluggish economy is a challenge which many countries are facing these days and the US is no exception. At the same time, many companies report that the pool of highly skilled workers is getting smaller.  These seemingly contradictory conditions are increasing the debate over H1-B visas.

H1-B visas allow US employers to temporarily employ foreign workers with highly specialized knowledge and academic credentials in fields such as biotechnology, chemistry, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health.  The current law limits to 65,000 the number of foreign nationals who may be issued H-1B status each fiscal year with 20,000 additional requests for exemptions.  Putting a cap on H1-B Visas is a strategy aimed at limiting the number of jobs that go to non-US citizens, with advanced degrees, to fill specialized occupations.

On April 1st, the 2014 H1-B queue opened up and the cap was reached within the first week.  During that week, 124,000 petitions were filed. Every year this game of ‘musical chairs’ is played by the  U.S. Citizenship and Immigration Services (USCIS) to the utter consternation of staffing firms and ‘cap-subject’ employers; and also, to disappointment of many educated and highly skilled international workers, many of whom shelve their American dream – sometimes permanently. In fact, each year since the mid-90s, the number of days taken to reach the cap has been considered an indicator of the performance of the American economy. Immediately after the dotcom collapse in 2000, the demand for H1-Bs came down and did not pick up again until 2004. The US Government then created an additional quota of 20,000 for the foreign graduates of U.S. universities. But the increase has not really met the requirements of the employers.

This limit on H-1B visas affects the job market and businesses in different ways:

  • The additional pressure on talent scouting within the US sends the cost of talent spiralling upward due to the gap in demand and supply and drives many jobs off-shore.
  • When permanent employees are hard to come by, companies increasingly rely upon contingent workers; even when a permanent employee is preferred. .
  • In some cases, qualified immigrant workers with valid visas are rejected re-entry, by local consulate visa officers – making it impossible for them to even get any of their possessions back, or find other work – affecting the long term prospects of the US to attract workers from other countries.

The proposed Comprehensive Immigration Reform (CIR) legislation includes changes which make work permits even harder to come by, and establishes significant new requirements to prevent, detect, and deter fraud and abuse of the H-1B and L-1 visa systems.

  • All companies must make a good faith effort to hire Americans first.
  • Employers are prohibited from advertising only to H-1B visa holders.
  • Companies cannot outsource visa holders to other companies.
  • The fees payable for an H-1B are set to go up.
  • Companies with 50 or more employees must verify that less than 50% of the employer’s workforce is H-1B and L visa holders.
  • Administrative fines per violation increase from $1000 to $2000 and from $5000 to $10,000 for willful misrepresentation and these companies will be restricted from participating in the future recruiting of H-1B and L-1 employees.
  • Department of Labor employees will be required to share information about H-1B petitions with the U.S. Citizenship and Immigration Services.
  • By 2014, companies will be banned from bringing in additional workers if over 75% of their workers are H-1B or L-1 employees.

The DOL would provide a website where detailed job openings will have to be posted for at least 30 days before a H-1B candidate can be considered for the role. However, no decision seems to have been made about providing work permits to the spouses of H1 B visa holders, who are currently allowed to live in the country but not allowed to take up any employment.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.