H-1B visa

The H-1B is a non-immigrant visa in the United States under the Immigration and Nationality Act, section 101(a)(15)(H). It allows U.S. employers to temporarily employ foreign workers in specialty occupations. If a foreign worker in H-1B status quits or is dismissed from the sponsoring employer, the worker must either apply for and be granted a change of status to another non-immigrant status, find another employer (subject to application for adjustment of status and/or change of visa), or leave the United States.

The regulations define a "specialty occupation" as requiring theoretical and practical application of a body of highly specialized knowledge in a field of human endeavor including but not limited to architecture, engineering, mathematics, physical sciences, social sciences, biotechnology, medicine and health, education, law, accounting, business specialties, theology, and the arts, and requiring the attainment of a bachelor’s degree or its equivalent as a minimum (with the exception of fashion models, who must be "of distinguished merit and ability"). Likewise, the foreign worker must possess at least a bachelor’s degree or its equivalent and state licensure, if required to practice in that field. H-1B work-authorization is strictly limited to employment by the sponsoring employer.

Structure of the Program

Duration of stay

The duration of stay is three years, extendable to six years. An exception to maximum length of stay applies in certain circumstances:

• If a visa holder has submitted an I-140 immigrant petition or a labor certification prior to their fifth year anniversary of having the H-1B visa, they are entitled to renew their H-1B visa in one year or three year increments until a decision has been rendered on their application for permanent residence.
• If the visa holder has an approved I-140 immigrant petition, but is unable to initiate the final step of the green card process due to their priority date not being current, they may be entitled to a three-year extension of their H-1B visa. This exception originated with the American Competitiveness in the Twenty-First Century Act of 2000.
• The maximum duration of the H-1B visa is ten years for exceptional Defense Department project related work.

H-1B holders who want to continue to work in the U.S. after six years, but who have not obtained permanent residency status, must remain outside of the U.S. for one year before reapplying for another H-1B visa. Despite a limit on length of stay, no requirement exists that the individual remain for any period in the job the visa was originally issued for. This is known as H-1B portability or transfer, provided the new employer sponsors another H-1B visa, which may or may not be subjected to the quota. Under current law, H-1B visa has no stipulated grace period in the event the employer-employee relationship ceases to exist.

Congressional yearly numerical cap

The current law limits to 65,000 the number of foreign nationals who may be issued a visa or otherwise provided H-1B status each fiscal year (FY). Laws exempt up to 20,000 foreign nationals holding a master’s or higher degree from U.S. universities from the cap on H-1B visas. In addition, excluded from the ceiling are all H-1B non-immigrants who work at (but not necessarily for) universities and non-profit research facilities. This means that contractors working at, but not directly employed by the institutions may be exempt from the cap. Free Trade Agreements carve out 1,400 H-1B visas for Chilean nationals and 5,400 H-1B visas for Singapore nationals. However, if these reserved visas are not used, then they are made available in the next fiscal year to applicants from other countries. Thus the number of H-1B visas issued each year is significantly more than the 65,000 cap, with 117,409 having been issued in 2010.

The United States Citizenship and Immigration Services starts accepting applications on the first business of April for visas that count against the fiscal year starting in October. For instance, H-1B visa applications that count against the FY 2013 cap could be submitted starting from Monday, April 2, 2012. USCIS accepts H-1B visa applications no more than 6 months in advance of the requested start date. Beneficiaries not subject to the annual cap are those who currently hold H-1B status or have held H-1B status at some point in the past six years.

Tax status of H-1B workers

The taxation of income for H-1B employees depends on whether they are categorized for tax purposes as either non-resident aliens or resident aliens. A non-resident alien for tax purposes is only taxed on income from the United States, while a resident alien for tax purposes is taxed on income from both inside and outside the United States.

The classification is determined based on the "substantial presence test": If the substantial presence test indicates that the H-1B visa holder is a resident, then income taxation is like any other U.S. person and may be filed using Form 1040 and the necessary schedules; otherwise, the visa-holder must file as a non-resident alien using tax form 1040NR or 1040NR-EZ; he or she may claim benefit from tax treaties if they exist between the United States and the visa holder's country of citizenship.

Persons who are in their first year within the United States may choose to be considered a resident for taxation purposes for the entire year, and must pay taxes on their worldwide income for that year. This "First Year Choice" is described in IRS Publication 519 and can only be made once in a person's lifetime.

A spouse, regardless of visa status, must have a valid Individual Taxpayer Identification Number (ITIN) or Social Security number (SSN) in order to be included on a joint tax return with the H-1B holder.

The rules to file taxes for H-1B holders may be complex, depending on the individual situation. Besides consulting a professional tax preparer knowledgeable about the rules for foreigners, the IRS Publication 519, U.S. Tax Guide for Aliens, may be consulted.

H-1B visa holders pay Medicare and Social Security taxes, and are eligible for Social Security benefits. They also pay state and federal taxes.

H-1B and legal immigration

Even though the H-1B visa is a non-immigrant visa, it is one of the few visa categories recognized as dual intent, meaning an H-1B holder can have legal immigration intent (apply for and obtain the green card) while still a holder of the visa. In the past the employment-based green card process used to take only a few years, less than the duration of the H-1B visa itself. However, in recent times the legal employment-based immigration process has backlogged and retrogressed to the extent that it now takes many years for skilled professional applicants from certain countries to obtain their green cards. Since the duration of the H-1B visa hasn't changed, this has meant a lot more H-1B visa holders have to renew their visas in one-year or three-year increments to continue to be in legal status while their green card application is in process.

Dependents of H-1B visa holders

H-1B visa holders are allowed to bring their immediate family members (spouse and children under 21) to the United States under the H4 Visa category as dependents. An H4 Visa holder may remain in the U.S. as long as the H-1B visa holder remains in legal status. An H4 visa holder is not eligible to work in the U.S. and is not eligible for a Social Security number (SSN). An H4 Visa holder may attend school, obtain a driver's license and open a bank account while in the US. In order to claim a dependent on a tax return or file a joint tax return, the dependent will have to obtain an Individual Tax Identification Number (ITIN) which is used only for tax filing purposes.

Evolution of the Program

Changes in the cap and number of applications received

During the early 1990s, the cap was rarely reached. By the mid-1990s, however, the allocation tended to be filled each year on a first come, first served basis, resulting in new H-1Bs often being denied or delayed because the annual cap had already been reached. In 1998, the cap was increased to 115,000. The cap was increased to 195,000 for FY 2001, FY 2002 and FY 2003.

In FY 2004, the cap reverted to 90,000 when the temporary increase passed by Congress in 1999 expired. A yearly "shortfall" in available visas arose beginning in the mid 2000s, despite the temporary increase in the yearly cap.

In its annual report on H-1B visas, released in November 2006, USCIS stated that it approved 131,000 H-1B visas in FY 2004 and 117,000 in FY 2005. For FY 2007, beginning on October 1, 2006, the entire quota of visas for the year was exhausted within a span of less than 2 months on May 26, 2006, well before the beginning of the financial year concerned. The additional 20,000 Advanced Degree H-1B visas were exhausted on July 26.

For FY 2008, the entire quota was exhausted before the end of the first day on which applications were accepted, April 2. Under USCIS rules, the 123,480 petitions received on April 2 and April 3 that were subject to the cap were pooled, and then 65,000 of these were selected at random for further processing. The additional 20,000 Advanced Degree H-1B visas for FY 2008 was exhausted on April 30.

In 2008, a total of 276,252 visa applications (initial, renewals and extensions) were approved. In 2009 that number decreased slightly to 214,271 and 110,367 initial H-1B visas were issued from consular offices. The American Immigration Lawyers Association (AILA), described the situation as a crisis, and the situation was reported on by the Wall Street Journal, BusinessWeek and Washington Post. Employers applied pressure on congress. Microsoft chairman Bill Gates testified in 2007 on behalf of the expanded visa program on Capitol Hill, "warning of dangers to the U. S. economy if employers can't import skilled workers to fill job gaps". Congress considered a bill to address the claims of shortfall, but in the end did not revise the program.

For FY 2009, USCIS announced on April 8, 2008 that the entire quota for visas for the year had been reached, for both 20,000 Advanced and the 65,000 quota. USCIS would complete initial data entry for all filing received during April 1 to April 7, 2008 before running the lottery.

For FY 2010, USCIS announced on December 21, 2009, that enough petitions were received to reach the year cap.

For FY 2011, USCIS announced on January 27, 2011, that enough petitions were received to reach the year cap on January 26. For FY 2012, USCIS announced on November 23, 2011, that enough petitions were received to reach the year quota on November 22.

American Competitiveness in the Twenty-First Century Act of 2000

The American Competitiveness in the Twenty-First Century Act of 2000 (AC21) and the U.S. Department of Labor's PERM system for labor certification erased most of the earlier claimed arguments for H-1Bs as indentured servants during the green card process. With PERM, labor certification processing time is now approximately 9 months (as of Mar 2010).

Because of AC21, the H-1B employee is free to change jobs if they have an I-485 application pending for six months and an approved I-140, if the position they are moving to is substantially comparable to their current position. In some cases, if those labor certifications are withdrawn and replaced with PERM applications, processing times will improve, but the person will also lose their favorable priority date. In those cases, employers' incentive to attempt to lock in H-1B employees to a job by offering a green card is reduced, because the employer bears the high legal costs and fees associated with labor certification and I-140 processing, but the H-1B employee is still free to change jobs.

However, many people are ineligible to file I-485 at the current time due to the widespread retrogression in priority dates. Thus, they may well still be stuck with their sponsoring employer for many years. There are also many old labor certification cases pending under pre-PERM rules.

On May 25, 2006 the U.S. Senate passed immigration bill 2611, which contained several increases in the number of H-1B visas, including:

1. Raising the base quota from 65,000 to 115,000,
2. Automatically increasing the base quota by 20% whenever it is reached with no provision for lowering it,
3. Adding 6,800 visas for trade agreements separate from the base quota,
4. Adding 20,000 visas for those with foreign graduate degrees,
5. Raising from 20,000 to unlimited the number of visas for those with U.S. graduate degrees, and
6. Making visas to non-profit organizations exempt from the quota.

However, as the House refused to consider the measure, it died in conference and no H-1B increase was approved in time for the elections.

The USCIS has announced that after completing a policy review it was clarifying to avoid H-1B quota limits, individuals who spent one year outside of U.S. and did not exhaust their entire six year term can choose to be re-admitted for “remainder” of initial six-year period without being subject to the H-1B cap.

The USCIS has also announced that after completing a policy review that it was clarifying “any time spent in H-4 status will not count against the six-year maximum period of admission applicable to H-1B aliens.

On May 24, 2007, the Senate considered amendments to the Comprehensive Immigration Reform bill (S. 1348) including the Sanders Amendment to increase the H-1B Scholarship & Training Fee from $1500 to $8500 (for H-1B employers with more than 25 full time employees). The additional fee was to be used for training and scholarship programs and in addition to other existing fees. Senator Sanders listed the Teamsters Union and the AFL-CIO among supporters of his amendment. Without this amendment, Senator Sanders (I-VT) said, "skilled middle class and upper middle class Americans" would be hurt, and their wages would continue to be suppressed. Just prior to the vote, Senator Sanders announced that he had made changes to his amendment, dropping the fee for H-1B visas from the $8500 he proposed earlier, down to $5000. Following Senator Sanders’ announcement, Senators Kennedy and Specter expressed their support for the bill and the amendment passed by a vote of 59–35. Compete America, a coalition of U.S. tech companies, reported the passage of the Sanders amendment will "accelerate outsourcing and undermine U.S. economic growth."

The Consolidated Natural Resources Act of 2008, which, among other issues, federalizes immigration in the Commonwealth of the Northern Mariana Islands, stipulates that during a transition period, numerical limitations will not apply to otherwise qualified workers in the H visa category in the CNMI and Guam.

On Feb. 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (“stimulus bill”), Public Law 111-5. Section 1661 of the ARRA incorporates the Employ American Workers Act (“EAWA”) by Senators Sanders (I-Vt.) and Grassley (R-Iowa) to limit certain banks and other financial institutions from hiring H-1B workers unless they had offered positions to equally or better-qualified US workers, and to prevent banks from hiring H-1B workers in occupations they had laid off US workers from. These restrictions include:

1. The employer must, prior to filing the H-1B petition, take good-faith steps to recruit U.S. workers for the position for which the H-1B worker is sought, offering a wage at least as high as what the law requires for the H-1B worker. The employer must also attest that, in connection with this recruitment, it has offered the job to any U.S. worker who applies who is equally or better qualified for the position.
2. The employer must not have laid off, and will not lay off, any U.S. worker in a job essentially equivalent to the H-1B position in the area of intended employment of the H-1B worker within the period beginning 90 days prior to the filing of the H-1B petition and ending 90 days after its filing.

Recent changes in USCIS policy

USCIS recently issued a memorandum dated 8 Jan 2010. The memorandum effectively states that there must be a clear "employee employer relationship" between the petitioner (employer) and the beneficiary (potential Visa holder). It simply outlines what the employer must do to be considered in compliance as well as putting forth the documentation requirements to back up the employer's assertion that a valid relationship exists.

Some argue that this has effectively "killed the job-shop industry". While it is clear that the number of Visa petitions granted has declined (or is slower than normal to reach the full quota), it is not clear whether or not this is a result of simple political pressure to put the program on "hold", or a long-term result from real economic realities. The memorandum gives three clear examples of what is and is NOT considered a valid "employee employer relationship".

• an accountant working on and off-site to work
• a fashion model
• a computer software engineer working off-site

In the case of the software engineer, the petitioner (employer) must simply agree to do (some of) the following among others:

• supervise the beneficiary off-site & on-site
• maintain such supervision through calls, reports, or visits
• have a "right" to control the work on a day-to-day basis if such control is required.
• provide tools for the job
• hire, pay and have the ability to fire the beneficiary
• evaluate work products and perform progress/performance reviews
• claim them for tax purposes
• provide (some type of) employee benefits
• use "proprietary information" to perform work
• produce an end product related to the business
• have an "ability to" control the manner and means in which the work product is accomplished.

It further states that "common law is flexible" in how these factors are to be weighed.

Although this memorandum cites legal cases and provides examples, such a memorandum in itself is not law and future memoranda could easily be issued that could change this.

Protections for U.S. workers

For every H-1B petition filed with the USCIS, there must be included a Labor Condition Application (LCA) certified by the U.S. Department of Labor. The LCA is designed to ensure that the wage offered to the non-immigrant worker meets or exceeds the "prevailing wage" in the area of employment. The LCA also contains an attestation section designed to prevent the program from being used to import foreign workers for the purpose of breaking a strike, or for the purpose of replacing U.S. citizen workers. Under the regulations, LCAs are a matter of public record. Corporations hiring H-1B workers are required to make these records available to any member of the public who requests to look at them. Copies of the relevant records are also available from various web sites, including the Department of Labor.

Theoretically, the LCA process appears to offer protection to both U.S. and H-1B workers. However, according to the U.S. General Accounting Office, enforcement limitations and procedural problems render these protections ineffective. Ultimately, the employer, not the Department of Labor, determines what source it will use to determine the prevailing wage for an offered position, and it may choose among a variety of competing surveys, including its own wage surveys, provided that such surveys follow certain defined rules and regulations.

The law specifically restricts the Department of Labor's approval process of LCAs to checking for "completeness and obvious inaccuracies". In FY 2005, only about 800 LCAs were rejected out of over 300,000 submitted. Hire Americans First has posted several hundred first hand accounts of H-1B Visa Harm reports directly from individuals negatively impacted by the program, many of whom are willing to speak with the media.

Enforcement is substandard and there are reports of abusers surviving INS audits unscathed.

In 2009 Federal authorities busted a nationwide H-1B Visa Scam. In October 2008, a USCIS report found that the H-1B program has more than a 20 percent violation rate.

Employer attestations

The U.S. Department of Labor (DOL) is responsible for ensuring that foreign workers do not displace or adversely affect wages or working conditions of U.S. workers. While an employer is not required to advertise the position before hiring an H-1B non-immigrant pursuant to the H-1B visa approval, the employer is required to notify the employee representative about the Labor Condition Application (LCA) or if there is no such representation then the employer is required to publish that LCA at the workplace and the employer's office.

By signing the LCA, the employer attests that:

• H-1B nonimmigrants will be paid at least the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question or the prevailing wage level for the occupation in the area of employment, whichever is higher.
• The employment of H-1B nonimmigrants will not adversely affect the working conditions of workers similarly employed in the area of intended employment.
• On the date this application is signed and submitted, there is not a strike, lockout or work stoppage in the course of a labor dispute in the occupation in which H-1B nonimmigrants will be employed at the place of employment. If such a strike or lockout occurs after this application is submitted, I will notify ETA within 3 days of the occurrence of such a strike or lockout and the application will not be used in support of petition filings with INS for H-1B nonimmigrants to work in the same occupation at the place of employment until ETA determines the strike or lockout has ceased.
• A copy of this application has been, or will be, provided to each H-1B nonimmigrant employed pursuant to this application, and, as of this date, notice of this application has been provided to workers employed in the occupation in which H-1B nonimmigrants will be employed:
  • Notice of this filing has been provided to bargaining representative of workers in the occupation in which H-1B nonimmigrants will be employed; or
  • There is no such bargaining representative; therefore, a notice of this filing has been posted and was, or will remain, posted for 10 days in at least two conspicuous locations where H-1B nonimmigrants will be employed.

The law requires H-1B workers to be paid the higher of the prevailing wage for the same occupation and geographic location, or the same as the employer pays to similarly situated employees. Other factors, such as age and skill were not permitted to be taken into account for the prevailing wage. Congress changed the program in 2004 to require the Department of Labor to provide four skill-based prevailing wage levels for employers to use. This is the only prevailing wage mechanism the law permits that incorporates factors other than occupation and location.

The approval process for these applications are based on employer attestations and documentary evidence submitted. The employer is advised of their liability if they are replacing a US worker.

Limits on employment

According to the USCIS, "H-1B aliens may only work for the petitioning U.S. employer and only in the H-1B activities described in the petition. The petitioning U.S. employer may place the H-1B worker on the worksite of another employer if all applicable rules (e.g., Department of Labor rules) are followed. H-1B aliens may work for more than one U.S. employer, but must have a Form I-129 petition approved by each employer."

H-1B fees earmarked for U.S. worker education and training

In 2007, the U.S. Department of Labor, Employment and Training Administration (ETA), reported on two programs, the High Growth Training Initiative and Workforce Innovation Regional Economic Development (WIRED), which have received or will receive $284 million and $260 million, respectively, from H-1B training fees to educate and train U.S. workers.

Criticisms of the program

The H-1B program has caused a number of criticisms.

Employees made to pay H-1B sponsorship costs

Although the practice is unlawful, it is widely believed that some employers make their H-1B employees pay for most, all or in excess, of the costs associated with sponsoring and processing an H-1B application. These fees are usually under the guise of bond or other instruments, in an attempt to serve as a legal workaround to the law.

No labor shortages

Paul Donnelly, in a 2002 article in Computerworld, cited Milton Friedman as stating that the H-1B program acts as a subsidy for corporations. Others holding this view include Dr. Norman Matloff, who testified to the U.S. House Judiciary Committee Subcommittee on Immigration on the H-1B subject. Matloff's paper for the University of Michigan Journal of Law Reform claims that there has been no shortage of qualified American citizens to fill American computer-related jobs, and that the data offered as evidence of American corporations needing H-1B visas to address labor shortages was erroneous. The United States General Accounting Office found in a report in 2000 that controls on the H-1B program lacked effectiveness. The GAO report's recommendations were subsequently implemented. High-tech companies often cite a tech-worker shortage when asking Congress to raise the 65,000 annual cap on H-1B visas, but according to a study conducted by John Miano and the Center for Immigration Studies there is no empirical data to support that claim. Citing studies done at Duke, Alfred P. Sloan Foundation, Georgetown University and others, critics have also argued that in some years, the number of foreign programmers and engineers imported outnumbered the number of jobs created by the industry. Organizations have also posted hundreds of first hand accounts of H-1B Visa Harm reports directly from individuals negatively impacted by the program, many of whom are willing to speak with the media.

Relatively low skills required

Another criticism of the H-1B program is its vague eligibility requirements, but specific guidelines, upheld by a body of case law, define the requirements. While frequently described as a program for highly skilled workers, the H-1B nonimmigrant visa category specifically applies to specialty occupations. It can be argued that any job that requires a minimum of a bachelor's degree is "highly skilled".

Specialty occupations have been defined as positions that require theoretical or technical expertise in a specialized field and have generally been interpreted as being those that normally require the attainment of a Bachelor's degree. Typical H-1B occupations include architects, engineers, computer programmers, accountants, doctors, veterinarian, dentist, registered nurse, business managers, and college professors. The H-1B visa program also includes fashion models.

Wage depression

Wage depression is a chronic complaint critics have about the H-1B program: some studies have found that H-1B workers are paid significantly less than U.S. workers. It is claimed that the H-1B program is primarily used as a source of cheap labor. A paper by Harvard Professor George J. Borjas for the National Bureau of Economic Research found that "a 10 percent immigration-induced increase in the supply of doctorates lowers the wage of competing workers by about 3 to 4 percent."

The LCA included in the H-1B petition is supposed to ensure that H-1B workers are paid the prevailing wage in the labor market, or the employer's actual average wage (whichever is higher), but evidence exists that some employers do not abide by these provisions and avoid paying the actual prevailing wage despite stiff penalties for abusers.

DOL has split the prevailing wage into four levels, with Level One representing about the 17th percentile of wage average Americans earn. About 80 percent of LCAs are filed at this 17th percentile level. This four-level prevailing wage can be obtained the DOL website, and is generally far lower than average wages.

The "prevailing wage" stipulation is allegedly vague and thus easy to manipulate, resulting in employers underpaying visa workers. According to Ron Hira, assistant professor of public policy at the Rochester Institute of Technology, the median wage in 2005 for new H-1B information technology (IT) was just $50,000, which is even lower than starting wages for IT graduates with a B.S. degree. The U.S. government OES office's data indicates that 90 percent of H-1B IT wages were below the median U.S. wage for the same occupation.

In 2002, the U.S. government began an investigation into Sun Microsystems' hiring practices after an ex-employee, Guy Santiglia, filed complaints with the U.S. Department of Justice and U.S. Department of Labor alleging that the Santa Clara firm discriminates against American citizens in favor of foreign workers on H-1B visas. Santiglia accused the company of bias against U.S. citizens when it laid off 3,900 workers in late 2001 and at the same time applied for thousands of visas. In 2002, about 5 percent of Sun's 39,000 employees had temporary work visas, he said. In 2005, it was decided that Sun violated only minor requirements and that neither of these violations was substantial or willful. Thus, the judge only ordered Sun to change its posting practices.

Hidden costs and risks for employers

Although, lower wages do not necessarily mean lower costs for employers. The costs for a company to apply for an H-1B visa can be significant, and it can vary between $1,440 and $5,000 as the H-1B fee was increased by $2000 for petitioners who employ 50 or more employees in the United States with more than 50 percent of its employees in the United States in H-1B or L (including L-1A, L-1B and L-2) nonimmigrant status from August 14, 2010 as President Obama signed into law Public Law 111-230, depending on the attorney's fees (if used), the number of employees in the company, and if a faster premium service is paid, without including the cost of a possible trip to the border of the country of origin, nor the renewal costs. Besides that, there is no guarantee that the prospective employee will be granted the visa due to high demand, and the expenses are sometimes non-refundable. In addition to that, if the employer should dismiss the employee, the company is liable for any reasonable costs associated with relocation back to the employee's last foreign residence. This provision covers only dismissal; it is not relevant when an employee chooses to resign.

Risks for employees

Historically, H-1B holders have sometimes been described as indentured servants, and while the comparison is no longer as compelling, it had more validity prior to the passage of American Competitiveness in the Twenty-First Century Act of 2000. Although immigration generally requires short- and long-term visitors to disavow any ambition to seek the green card (permanent residency), H-1B visa holders are an important exception, in that the H-1B is legally acknowledged as a possible step towards a green card under what is called the doctrine of dual intent.

H-1B visa holders may be sponsored for their green cards by their employers through an Application for Alien Labor Certification, filed with the U.S. Department of Labor. In the past, the sponsorship process has taken several years, and for much of that time the H-1B visa holder was unable to change jobs without losing their place in line for the green card. This created an element of enforced loyalty to an employer by an H-1B visa holder. Critics alleged that employers benefit from this enforced loyalty because it reduced the risk that the H-1B employee might leave the job and go work for a competitor, and that it put citizen workers at a disadvantage in the job market, since the employer has less assurance that the citizen will stay at his job for an extended period of time, especially if the work conditions are tough, wages are lower or the work is difficult or complex. It has been argued that this makes the H-1B program extremely attractive to employers, and that labor legislation in this regard has been influenced by corporations seeking and benefiting from such advantages.

Some recent news reports suggest that the recession started in 2008 will exacerbate the H-1B visa situation, both for supporters of the program and for those who oppose it. The process to obtain the green card has become so long, that during these recession years it has not been unusual that sponsoring companies fail and disappear, thus forcing the H-1B employee to find another sponsor, and losing their place in line for the green card. An H-1B employee could be just one month from obtaining their green card, but if the employee is laid off, he or she may have to leave the country, or go to the end of the line and start over the process to get the green card, and wait as much as 10 more years, depending on the nationality and visa category.

The American Competitiveness in the Twenty-First Century Act of 2000 provides some relief for people waiting for a long time for a green card, by allowing H-1B extensions past the normal 6 years, as well as by making it easier to change the sponsoring employer.

Fraud by Employers and Applicants

The U.S. CITIZENSHIP AND IMMIGRATION SERVICES "H-1B Benefit Fraud & Compliance Assessment" of September 2008 concluded 21% of H-1B visas granted originate from fraudulent applications or applications with technical violations. Fraud was defined as a willful misrepresentation, falsification, or omission of a material fact. Technical violations, errors, omissions, and failures to comply that are not within the fraud definition were included in the 21% rate. Subsequently, USCIS has made procedural changes to reduce the number of fraud and technical violations on H-1B applications.

The Outsourcing Visa

Further information: IT Body Shops

In his floor statement on H-1B Visa Reform, Senator Dick Durbin stated "The H-1B visa job lasts for 3 years and can be renewed for 3 years. What happens to those workers after that? Well, they could stay. It is possible. But these new companies have a much better idea for making money. They send the engineers to America to fill spots--and get money to do it--and then after the 3 to 6 years, they bring them back to work for the companies that are competing with American companies. They call it their outsourcing visa. They are sending their talented engineers to learn how Americans do business and then bring them back and compete with those American companies." Critics of H-1B use for outsourcing have also noted that more H-1B visas are granted to companies headquartered in India than companies headquartered in the United States.

Of all Computer Systems Analysts and programmers on H-1B visas in the US, 74 percent were from Asia. This large scale migration of Asian IT professionals to the United States has been cited as a central cause for the quick emergence of the offshore outsourcing industry.

In 2006, these firms collectively were issued 19,512 of the 65,000 H-1B visas granted, with 4 outsourcing firms among the top 5 receivers of H-1B visas. These are Infosys, Satyam Computer Services, Tata Consultancy Services, and Wipro Technologies. Critics have argued that granting H-1B visas to these outsourcing firms is not the real intent of the H-1B Visa program. One reason given is that the Indian firms skirt regulations and use the visas to train workers in the U.S. to facilitate moving jobs offshore.

In 2006, Wipro applied for 20,000 H-1B visas and 160 Green Cards while Infosys applied for 20,000 H-1B visas and only 50 Green Cards. Of the Applied H-1B visas, Wipro and Infosys were granted 4,002 and 4,108 visas, respectively, an acceptance rate of 20% and 24%. Given that both companies have a work force of approximately 100,000 employees, and a U.S. employment base of roughly 20,000 H-1B holders, this indicates that roughly 1/5 of the Indian workforce of Infosys & Wipro applied for a visa in 2006. A 2009 Business Week article cited a ComputerWorld article indicating that Wipro was the top user of the program with 1,964 Visas.

Critics have argued against this trend, stating that there is no dearth of qualified workers in the United States.

In 2009, due to the worldwide recession, applications for H-1B visas by outsourcing firms were significantly lower than in previous years.

Recent H-1B legislation requires certain employers, called H-1B dependent employers, to advertise positions in the USA before petitioning to employ H-1B workers for those positions. These requirements do not apply when hiring an exempt H-1B nonimmigrant.

For firms of 50 employees or more, an H-1B dependent employer is defined as having more than 15% of their employees in H-1B status. Smaller firms are allowed to have a higher percentage of H-1B employees before becoming 'dependent'.

Payment of out-of-state tuition

In most states, H-1B workers and their dependents do not qualify for in-state tuition regardless of the amount of time spent in the US. However, for more than a decade, a few states such as California, New York, Washington and Texas have extended in-state tuition to H-1B workers and dependents. Typically the decision to offer in-state tuition to H-1B and H4 residents is taken as a result of an adverse state court decision that uses the precedent established for G-4 visas in the Supreme Court decision in TOLL v. MORENO, 441 U.S. 458 (1979).

Social Security and Medicare taxes

H-1B employees have to pay Social Security and Medicare taxes as part of their payroll. Like US citizens, they are eligible to receive Social Security benefits even if they leave the United States, provided they have paid Social Security benefits for at least 10 years. Further, the US has bilateral agreements with several countries to ensure that the time paid into the US Social Security system, even if it is less than 10 years, is taken into account in the foreign country's comparable system and vice versa.

Spouses cannot work

The spouse of a H-1B visa holder who generally comes on H-4 (dependent) visa cannot work in the United States.

Unrealistic Departure Requirement on Job Loss

If an H-1B worker is laid off for any reason, the H-1B program technically does not specify a time allowance or grace period to round up one's affairs irrespective of how long the H-1B worker might have lived in the United States. To round up one's affairs, filing an application to change to another non-immigrant status may therefore become a necessity.

An H-1B worker who is laid off and attempts to find a new H-1B employer to file a petition for him is considered out of status if there is even a one day gap between the last day of employment and the date that the new H-1B petition is filed. While some attorneys claim that there is a grace period of 30 days, 60 days, or sometimes 10 days, that is not true according to the law. In practice, USCIS has accepted H-1B transfer applications even with a gap in employment up to 60 days, but that is by no means guaranteed.

Some of the confusion regarding the "grace period" arose because there is a 10 day grace period for an H-1B worker to depart the United States at the end of his authorized period of stay (does not apply for laid-off workers). This grace period only applies if the worker works until the H-1B expiration date listed on his I-797 approval notice, or I-94 card. 8 CFR 214.2(h)(13)(i)(A).

The employer has the legal obligation to pay for the laid-off worker's return transportation.

Administrative processing

When an H-1B worker goes outside of US for vacation, he or she has to get the visa stamped on his passport unless he has already done so for re-entry in the United States. The interview is taken in US Embassy by a visa officer. In some cases, H-1B workers can be required to undergo "administrative processing", involving extra, lengthy background checks. Under current rules, these checks are supposed to take ten days or less, but in some cases, have lasted years.

Similar programs

In addition to H-1B visas, there are a variety of other visa categories that allow foreign workers to come into the U.S. to work for some period of time.

L-1 visas are issued to foreign employees of a corporation. Under recent rules, the foreign worker must have worked for the corporation for at least one year in the preceding three years prior to getting the visa. An L-1B visa is appropriate for nonimmigrant workers who are being temporarily transferred to the United States based on their specialized knowledge of the company's techniques and methodologies. An L-1A visa is for managers or executives who will either manage people or an essential function of the company. There is no requirement to pay prevailing wages for the L-1 visa holders. For Canadian residents, a special L visa category is available.

TN-1 visas are part of the North American Free Trade Agreement (NAFTA), and are issued to Canadian and Mexican citizens. TN visas are only available to workers who fall into one of a pre-set list of occupations determined by the NAFTA treaty. There are specific eligibility requirements for the TN Visa.

E-3 visas are issued to citizens of Australia under the Australia free-trade treaty.

H-1B1 visas are issued to residents of Chile and Singapore under the amended NAFTA treaty.

One recent trend in work visas is that various countries attempt to get special preference for their nationals as part of treaty negotiations. Another trend is for changes in immigration law to be embedded in large Authorization or Omnibus bills to avoid the controversy that might accompany a separate vote.

H-2B visa: The H-2B nonimmigrant program permits employers to hire foreign workers to come to the U.S. and perform temporary nonagricultural work, which may be one-time, seasonal, peak load or intermittent. There is a 66,000 per year limit on the number of foreign workers who may receive H-2B status.

H-1B demographics

• 
  H-1B number issued each year for 2006-2008
• 
  Issued H-1Bs by continent
• 
  Pie chart showing 25% Indian
• By nation in 2005
  By nation in 2005

H-1B Applications Approved

H-1B Applications Approved by USCIS , , , , , ,

Year	Initial	Renewals+Extensions	Total
1999	134,411	na	na
2000	136,787	120,853	257,640
2001	201,079	130,127	331,206
2002	103,584	93,953	197,537
2003	105,314	112,026	217,340
2004	130,497	156,921	287,418
2005	116,927	150,204	267,131
2006	109,614	161,367	270,981
2007	120,031	161,413	281,444
2008	109,335	166,917	276,252
2009	86,300	127,971	214,271
2010	76,627	116,363	192,990

H-1B Applications Approved by USCIS, by Level of Education

Year	Lacking equivalent of US high school diploma	Lacking equivalent of US bachelor degree
2000	554	2,986
2001	247	3,983
2002	169	2,655
2003	148	2,249
2004	123	1,803
2005	107	1,345
2006	96	914
2007	72	913
2008	80	643
2009	108	829
2010	140	739

H-1B Visas Issued

H-1B visas issued by State Department

Year	H-1B	H-1B1
1990	794	na
1991	51,882	na
1992	44,290	na
1993	35,818	na
1994	42,843	na
1995	51,832	na
1996	58,327	na
1997	80,547	na
1998	91,360	na
1999	116,513	na
2000	133,290	na
2001	161,643	na
2002	118,352	na
2003	107,196	na
2004	138,965	72
2005	124,099	275
2006	135,421	440
2007	154,053	639
2008	129,464	719
2009	110,367	621
2010	117,409	419

Top ten H-1B rankings as of 2006

Top ten companies receiving H-1Bs

Rank	Company	Headquarters	Primary Employment Base	H-1Bs received 2006	H-1Bs approved 2009
1, 8	Infosys	Bangalore, Karnataka, India	India	4,908	440
2, 1	Wipro	Bangalore, Karnataka, India	India	4,002	1,964
3, 2	Microsoft	Redmond, Washington	US	3,117	1,318
4	Tata Consultancy Services	Mumbai, Maharashtra, India	India	3,047
5, 22	Satyam Computer Services	Hyderabad, Andhra Pradesh, India	India	2,880	219
6, 20	Cognizant	Teaneck, New Jersey	India	2,226	233
7, 5	Patni Computer Systems	Mumbai, Maharashtra, India	India	1,391	609
8, 4	IBM (India, Private Ltd.)	Armonk, New York	US	1,130	695
9, 15	Oracle Corporation	Redwood Shores, California	US	1,022	272
10, 6	Larsen & Toubro Infotech	Mumbai, Maharashtra, India	India	947	602
, 3	Intel Corporation	Santa Clara, California	US		723
, 7	Ernst & Young LLP	London, United Kingdom			481
, 8	UST Global	Aliso Viejo, California			344
, 9	DELOITTE CONSULTING LLP	New York City, New York			328
, 10	QUALCOMM INC	San Diego, California			320

Top 10 universities and schools receiving H-1Bs

School	H-1Bs Received 2006
New York City Public Schools	642
University of Michigan	437
University of Illinois at Chicago	434
University of Pennsylvania	432
Johns Hopkins University School of Medicine	432
University of Maryland	404
Columbia University	355
Yale University	316
Harvard University	308
Stanford University	279
Washington University in St. Louis	278
University of Pittsburgh	275

Top ten U.S. technology companies receiving H-1Bs

Company	H-1Bs Received 2006
Microsoft	3117
Cognizant	2226
IBM	1130
Oracle Corporation	1022
Cisco	828
Intel	828
Motorola	760
Qualcomm	533
Yahoo	347
Hewlett-Packard	333
Google	328

See also

• SKIL Bill
• Free trade debate
• Labor shortage
• Immigration Voice
• L-1 visa

References

1. United States Citizenship and Immigration Service, "Characteristics of Specialty Occupation Workers (H-1B)", for FY 2004 and FY 2005, November 2006.
2. "Microsoft Cuts 5,000 Jobs as Recession Curbs Growth (Update5)", Bloomberg, 22 Jan 2009 (Microsoft Lays off 5,000 even as they use 3,117 visas in 2006.)
3. Bill Gates, Chairman of Microsoft, Testimony to the U.S. Senate Committee Health, Education, Labor, and Pensions. Hearing "Strengthening American Competitiveness for the 21st Century". March 7, 2007
4. Business Week, Immigration: Google Makes Its Case, 7 Jun 2007.
5. Business Week, Who Gets Temp Work Visas? 7 Jun 2007 (Top 200 H-1B Visa Users Chart)
6. Business Week, Immigration Fight: Tech vs. Tech, 25 May 2007.
7. Business Week, Crackdown on Indian Outsourcing Firms, 15 May 2007.
8. Dr. Norman Matloff, Debunking the Myth of a Desperate Software Labor Shortage, Testimony to the U.S. House Judiciary Committee, April 1998, updated December 2002
9. Programmers Guild, PERM Fake Job Ads defraud Americans to secure green cards, Immigration attorneys from Cohen & Grigsby explains how they assist employers in running classified ads with the goal of NOT finding any qualified applicants.
10. Lou Dobbs: Cook County Resolution against H-1b
11. PRWeb, The Programmers Guild Calls on Congress to include U.S. Worker Protections in the Pending SKIL Bill H-1b Visa Legislation
12. CNN, Lou Dobbs, Programmers Guild Interview & Transcript, August 26, 2005
13. Congressional Record: ILLEGAL ALIENS TAKING AMERICAN JOBS, June 18, 2003 (House)
14. Center for Immigration Studies, Backgrounder: The bottom of the pay scale, Wages for H-1B Computer Programmer's, John Milano, 2005.
15. U.S. Government Accountability Office (GAO), Report, EXPORT CONTROLS: Department of Commerce Controls over Transfers of Technology to Foreign Nationals Need Improvement
16. Attestation Requirements of an H-1B Dependent Employer

External links for H-1B information

• U.S. Department of State information on H-1B visa
• U.S. GAO Report on H-1B Problems, PDF format
• 2010 H-1B Visa Reports: Top H-1B Visa Sponsors by Industry, Occupation, Economic Sector and Locations
• H-1B Quota Updates from USCIS

Other links

• Pittsburgh law firm's immigration video sparks an Internet firestorm, Pittsburgh Post-Gazette, June 22, 2007
• "Lawmakers Request Investigation Into YouTube Video" Sen. Chuck Grassley and Rep. Lamar Smith ask the Labor Department to look into a video they say documents H-1B abuse by companies. Information Week, June 21, 2007
• Oct. 2007 study by Georgetown University – The study raises questions about the use of test scores by visa-worker-seeking technology companies to claim that American citizens are not qualified.
• "America's New Immigrant Entrepreneurs" – A Duke University Study