Get Ready for the H1-B Shake-Up

Are you ready to stay up to date on the latest changes to the H-1B visa program? As the gateway for US employers to hire highly skilled foreign nationals, this visa has undergone several significant transformations under the past two administrations. Let’s dive into what you need to know about the program’s importance, current challenges, and its evolving nature. And, most importantly, how these changes will affect you as an employer or international student seeking to work in the US.

Understanding the H1-B Visa Program

The H1-B visa program, which allows US employers to hire high-skilled foreign nationals, particularly international students, has been the subject of several changes in recent years. The program has served as a practical way for American employers to hire high-skilled foreign nationals from US universities.
With only about 25% of the full-time graduate students in some of the key technical fields being US students, the divisions of many companies have sought out foreign workers to fill these critical roles. In the tech sector, especially, filling specialized roles requires companies to look at recruiting highly skilled foreign nationals.

How the H1-B Process Works

To access this pool of talent, employers must sponsor the foreign worker for the H1-B visa, which involves a rigorous application process and several associated costs and fees. The employer must demonstrate that they cannot find a qualified American worker to fill the position and that the foreign worker has the required skills and qualifications for the job.
Through a registration and lottery system, employers have to submit registrations. With only 85,000 slots available in the program, 400,000 out of almost 500,000 registrations are rejected before seeing an adjudicator at the US immigration service. This means that employers and international students have an 80% rejection rate.
In addition to the application fee, the employer must pay a premium to the US government to participate in the program. This premium is essentially an additional fee that employers pay to have access to a limited number of H1-B visas, which are subject to an annual cap.
This premium is intended to deter employers from abusing the program and to ensure that only the most qualified workers are sponsored for the visa. Employers have to pay the same salary as they would to a US worker along with thousands of dollars in legal and government fees.
By paying this premium, employers are investing in the future of their company by ensuring they have access to the best talent from around the world while bringing in highly skilled workers who can help drive success and growth.
However, the program has been controversial. Critics have claimed it can lead to lost jobs for American workers or depress wages for American and foreign workers in the same fields.

Challenges for Employers and International Students

The H-1B visa program’s importance is critical to businesses that need foreign talent, but the changes made over the years have caused significant concern to employers and international students looking to stay in the United States.
Although the H-1B visa was once coveted, the initial quota was not enough to meet the number of registrations. As a result, it has become difficult for both employers and international students to navigate the program. While the cap of 85,000 has not changed, there has been a 20,000 exemption for people
As an act of Congress, the 85,000 slots have been consistent. While the cap of 85,000 has not changed, there has been a 20,000 exemption for people with a graduate degree from a US University.
However, Congress has not kept up with the demand for technical labor since 1990 when the 65,000 cap was put into law. This had lead to a limited supply of labor from skilled foreign nationals despite industry demands.

H1-B Under the Trump Administration

Under the Trump Administration, there was a negative shift in the attitudes towards immigration, particularly for high-skilled foreign nationals, leading to a high denial rate for H-1Bs that got through to adjudicators, which reached 24%. This was a significant increase from the previous rate of 4 to 6 percent.

The lack of clarity on whether all those 85,000 slots were backfilled led to a group of small tech employers (who were  immigrant entrepreneurs themselves) hiring a law firm to sue the Trump administration.

After their success, a judge ruled that almost all the key policies on H-1B from the Trump administration were unlawful. In reaction to the new legal sentiment, the denial rate dropped down to the current four percent and lower.

H1-B Under the Biden Administration

Under the Biden administration , there was a significant reduction in denial rates as well as a more positive outlook towards business immigration. More significantly, the administration has proposed putting measures in place to make things better for employers and reducing friction between the federal government and employers on the issue of high-skilled labor and immigration.

However, the proposed changes would come at a cost for employers. One significant change to the H1-B visa program is the proposed rule by the Biden administration, which would significantly increase business immigration fees, including for H-1Bs, L-1 visas, and employment-based green cards.

For example, the cost of registration would see a major increase from the current $10 to $250 dollars per registration for a grand total of an extra $100 million each year. Other proposed changes include a $600 asylum fee as well as a raise in the cost of the petition fees and the expense of extending a H1-B visa.

While this would increase the expense of sponsoring foreign workers, it would help reduce the US government’s budget deficit and bring in more revenue.

While it’s clear that the H-1B visa has become more difficult to obtain, the Biden Administration has taken steps to make the process more transparent and predictable for employers. This includes the reinstatement of premium processing, which allows employers to pay an additional fee to expedite the processing of their H-1B petitions.

Challenges for the H1-B Program and the U.S. on Growth

The H-1B visa program has been a crucial driver of economic growth in the United States, especially in the tech industry. However, with the increasing difficulties of obtaining H-1B visas and permanent residency, other countries have become more attractive to international students and high-skilled immigrants.

Canada, for example, has seen a significant increase in the number of international students and immigrants from India since 2016. In contrast, the number of Indian graduate students in computer science and electrical engineering has dropped by about 40% in the United States.

With the increase in competition, more skilled immigrants (particularly Indian citizens) are opting to take offers in other countries. This could possibly impact the growth of tech jobs in the U.S.

Research has shown that metro areas with more high-skilled immigrants have better employment growth, including for U.S. workers and many companies. This is reflected in the fact that 55% of unicorn companies (companies valued at a billion dollars but not yet public) have at least one immigrant founder, and the number goes up to two-thirds when looking at the children of immigrants.

Strategies for US Companies for Recruiting Foreign Nationals

In the United States, employers who want to hire foreign nationals, including H1-B workers, can take a few tactical steps to increase their chances of success. One way is to recruit on college campuses, where they can identify foreign national students with skills that match their job requirements.

If the candidate is a foreign national, the employer can hire them for optional practical training, 36 months in a STEM field. The candidate can also have multiple attempts at obtaining an H-1B visa, which increases their chances of being able to work in the US for an extended period.

It’s important to note that many small and medium-sized companies have facilities in other countries that they can access, which means that they could get work done more easily if the US made it easier for them to hire foreign workers.

In industries like the semiconductor industry, where the demand for talent is high, foreign nationals from graduate schools are often necessary to fill roles. If the US wants to remain a leader in technology and manufacturing, it needs to continue to be a magnet for global talent.

Conclusion

In conclusion, the H1-B visa program is a critical driver of economic growth in the United States, especially in the tech industry. The program has gone through significant changes over the years and has become increasingly difficult to navigate for both employers and international students.

While the Biden Administration has taken steps to make the process more transparent and predictable for employers, the proposed rule to increase business immigration fees could make it more expensive to sponsor foreign workers.

The challenges faced by the H1-B program, combined with the attractiveness of other countries to international students and high-skilled immigrants, pose a significant risk to the continued economic growth of the United States. The future of the program will depend on the government’s ability to balance the needs of American workers with the demand for foreign talent in critical fields.