Fact check: H-1B visas are not cheap, convenient or easy to obtain

Kortney Gibson
Kortney Gibson 27 Feb, 2019

Over the past two years, opponents of high-skilled immigration have put a bull’s-eye on H-1B visas. They have successfully advocated for policy changes that restrict the ability of U.S. companies to apply for the category, premised on the perception that high-skilled foreign workers are taking jobs away from Americans and that companies are abusing the system by importing “cheap” foreign labor to undercut American wages.

The fact is that H-1Bs are regulated to protect American workers through wage requirements and rigid numerical quotas, making the H-1B category one of the strictest programs for high-skilled workers in the world.

American companies do not choose H-1B visas to save money by hiring foreign workers. H-1Bs are not cheap, and employers spend thousands of dollars on legal fees and government filing fees to sponsor employees for an H-1B worker’s initial petition, as well as on renewals and visas for family dependents. By law, companies must fulfill multiple requirements to ensure they are paying foreign workers appropriately — by paying not just a threshold minimum salary, but the prevailing wage for the particular job. These requirements include certifying with the U.S. Department of Labor that the wages paid to a foreign job candidate are on par with those paid to American workers in the same job and location; attesting the foreign worker’s salary, job details, work location, and qualifications; and posting a notice to U.S. workers that the company is seeking to sponsor an H-1B worker. According to several studies, H-1B employees earn significantly higher wages than Americans in the same field.1

Capped at 85,000 visas per year, H-1B visas are extremely limited when compared with demand that has risen sharply since the cap was introduced in the 1990s. The odds of selection in the lottery have been well below 50 percent for the past several years, creating huge uncertainty for business planning. Even if selected for adjudication, the intense scrutiny on H-1B petitions creates additional hurdles with no guarantee of success. Requests for evidence shot up by more than 40 percent shortly after Trump issued the “Buy American and Hire American” executive order and the rate of H-1B denials2 continues to climb. In the end, H-1B workers hold only 0.6 to 0.7 percent of U.S. jobs, a proverbial drop in the bucket for the U.S. labor force.3 

What’s more, H-1Bs are inconvenient, and companies incur indirect business costs because H-1B visas are tied to a specific job and work location. Foreign employees sponsored on H-1Bs are not as mobile as American workers. If an H-1B worker changes job locations, the company must file an amended H-1B petition with the government at additional cost. Unlike U.S. workers, H-1B workers cannot be hired on a contractual basis and companies are prohibited from “benching” H-1B employees during periods of slow productivity. Therefore, they must continue to pay them even if they are not performing billable work.

Inevitably, H-1Bs add to companies’ administrative hassles. Employers must keep meticulous records of H-1B employees and be prepared for inspection without notice. USCIS operates a Fraud and Detection and National Security (FDNS) unit that conducts unannounced visits to investigate employers for fraud and abuse. The Labor Department also conducts audits of H-1B employers to make sure they are in compliance with the wage requirements and documents related to the labor condition application. Both agencies have stepped up the number of audits and opened tip lines for reporting fraud and abuse. The audit process and potential liability for noncompliance requires H-1B employers to understand the record-retention requirements for each type of document, put in place separate policies and protocols for their HR personnel for each type of inspection, and train staff regarding how to receive inspectors and which documents they are permitted to turn over.

So why would employers hire workers on H-1B visas in the face of increasing wage requirements, decreasing odds of success, and added compliance burdens? Companies turn to foreign job candidates, many of whom are graduates of top U.S. universities, because they have skills that employers need, especially in the IT and STEM fields. In fiscal year 2017, 69 percent of H-1B petitions were filed in the STEM and IT fields, according to USCIS.4 In these and other fields, demand remains high and American workers are often not available, either because they are not graduating in numbers that meet demand or because they have moved on to better opportunities outside those fields.

Opponents of high-skilled immigration aren’t worried about U.S. companies and their ability to compete in a global economy. Their goal is to reduce immigration, and restricting the H-1B visa category is a means to that end. But the facts refute their rationale for restricting high-skilled immigration, as there is no evidence of widespread abuse. The vast majority of employers follow the rules and comply with wage safeguards aimed at protecting U.S. workers. The reality is that opponents of high-skilled immigration who continue to push for further restrictions to H-1B access are trying to solve a problem that doesn’t exist — and hurting U.S. companies in the process.

Kortney Gibson is a Partner in the Dallas office of Berry Appleman & Leiden LLP.

1“H-1Bs: How do they stack up against US-born workers?” Public Policy Institute of California, December 2011, http://ftp.iza.org/dp6259.pdf; “Report: H-1Bs and the STEM shortage,” The Brookings Institution, May 10, 2013, https://www.brookings.edu/research/h-1b-visas-and-the-stem-shortage/. See also Glass Door, “Dispelling Myths: What H-1B visa workers are really paid,” April 3, 2017, https://www.glassdoor.com/research/h1b-workers/
2“H-1B Denial and RFE Increase,” National Foundation for American Policy, July 2018, https://nfap.com/wp-content/uploads/2018/07/H-1B-Denial-and-RFE-Increase.NFAP-Policy-Brief.July-2018.pdf
3“The H-1B Visa Debate Explained,” Harvard Business Review, May 4, 2017, https://hbr.org/2017/05/the-h-1b-visa-debate-explained
4“Characteristics of H-1B Specialty Occupation Workers, Report to Congress,” U.S. Citizenship and Immigration Services, April 6, 2018, https://www.uscis.gov/sites/default/files/files/nativedocuments/Characteristics_of_H-1B_Specialty_Occupation_Workers_FY17.pdf

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