The continued growth of the economy, coupled with a lack of any meaningful business immigration reform, suggests that the perpetually oversubscribed H-1B quota will be exhausted for the next federal fiscal year (FY 2018) within the first days of the filing period, which begins April 3. At the same time, the current administration signaled during the campaign that it would be seeking reforms of the H-1B visa program, and since the election, several bills have been introduced to increase wage levels, give preference for H-1B visas to certain professionals, and to impose recruiting requirements on prospective H-1B employers. These changes are meant to lower demand for the H-1B visas, particularly among technology outsourcing companies that file significant numbers of H-1B petitions each year.
The H-1B visa is used to bring professionals from abroad, and to hire international students from our local universities, most often in the science, technology, engineering and mathematics (STEM) fields that are vital for maintaining competitiveness in the world economy. Many H-1Bs are also employed in education, heath care and finance as well. The H-1B visa is an employer-sponsored visa for “specialty occupation” jobs—defined as positions that normally require a minimum of a bachelor’s degree or higher in a specific field. This is the visa for professionals—software developers, industrial engineers, financial analysts and pharmaceutical researchers, among others. While foreign-owned and multinational companies may have other visa options they can use, the H-1B is the only visa available to American companies that have no operations outside the United States.
An annual quota of 65,000 new H-1B nonimmigrants per year was established more than 25 years ago, in 1990. One aim of this cap was to protect the U.S. workforce. At that time, the quota was sufficient to meet demand. In 2004, recognizing that graduates of U.S. master’s degree programs are valuable to the nation’s economy, Congress passed the H-1B Visa Reform Act. The act added 20,000 H-1B visas for foreign-born individuals who have graduated from U.S. universities with a master’s degree or higher.
Despite this measure, the annual quota of 85,000 visas is still inadequate to ensure that employers can hire the specialized employees they require, as needed throughout the year. Demand has exceeded supply, and the cap has been exhausted every year since 2004, even during the recent major economic downturn. In the prior two fiscal years, more than 200,000 petitions have been filed to seek H-1B visas during the first five days of the fiscal year, a situation the regulations handle by conducting a random selection process—a lottery, if you will—on all petitions received during those five days.
When the cap is reached, employers essentially face a hiring block until the start of the next federal fiscal year if the employee with the specific skill or experience they need happens to be foreign. Every year, the cap adds to the uncertainty U.S. companies face when trying to keep up, plan for the future, and remain agile and innovative in a fragile economic environment.
Given the current administration’s animosity toward H-1Bs and its demonstrated willingness to try and use executive orders to create change in the immigration process, some workers and employers have expressed concern about this year’s lottery. For this year, such fears are likely overblown, given that Congress has provided the statutory basis for allocating H-1B visas (“in the order received”). Similarly, a regulation implements that statutory authorization—and provides for the H-1B lottery when more than 85,000 petitions are received in the initial five-day window. If the new administration would prefer a different method of allocating visas, Congress would have to change the current “first-come, first served” standard.
Without legislative changes to the H-1B quota, U.S. employers are forced to go without the employees they wish to hire. Or, they can relocate the work abroad. Creative immigration solutions may also exist to secure permission for the employer to legally hire the individuals they need for a given position, but the H-1B is still the main visa option for professional workers from abroad or for hiring international students who graduated from American universities.
For those optimists, and fatalists alike, who do intend to file H-1B petitions this year despite the disheartening odds, it is imperative to file on April 3, or within the first five business days of the filing season. So it is time for U.S. employers to look into their future, anticipate hiring needs for specialty occupations into 2018, and begin preparations. Do you want to hire an individual who is not in H-1B status already? Are you hiring an individual who is already in H-1B status, but is currently employed with a college/university or a nonprofit government research organization (these situations require a new H-1B number)? Is your current employee in F-1 student status? Is your employee in another nonimmigrant status and may want to seek legal permanent residence in the United States? While analyzing the next year’s needs and preparing for April 1 filings, employers and immigration counsel will keep one eye trained on a Congress challenged by the president to pass an immigration bill that we hope will change the H-1B equation.
Reprinted with permission from the March 14, 2017 edition of the The Legal Intelligencer© 2017 ALM Media Properties, LLC. All rights reserved.
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