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The H-1B is a foreign worker visa in the United States that allows U.S. employers to hire foreign workers in so-called specialty occupations. The regulation and implementation of the visa program is carried out by the United States Citizenship and Immigration Services within the United States Department of Homeland Security.

Although the law does not specifically list what it considers "specialty occupations," they are defined as a category as an application of specialized knowledge and eligible applicants must have at least a bachelor degree or higher qualification, or the equivalent work experience.

The visa allows an initial stay of three years, which may be extended to a maximum of six years. After this period, the visa holder must either leave the United States or reapply. The number of H-1B visas issued each fiscal year is capped at 65,000, with an additional 20,000 visas available for individuals who have earned a master’s degree or higher from a U.S. institution. Sponsorship by an employer is required for applicants.

In 2019, the U.S. Citizenship and Immigration Services (USCIS) estimated there were 583,420 foreign nationals on H-1B visas in the United States. Between 1991 and 2022, the number of H-1B visas issued had quadrupled. 265,777 H-1B visas were approved in 2022, the second largest category of visa in terms of total number of foreign workers after the 310,676 H-2A visas issued to temporary, seasonal agriculture workers.

The H-1B program has faced criticism for potentially subsidizing businesses, creating conditions likened to modern indentured servitude, institutionalizing discrimination against older workers, and suppressing wages within the technology sector. Economists and academics remain divided on the program’s overall impact, including its effects on innovation, U.S. workers, and the broader economy.

H-1B visa structure

The H-1B visa is a non-immigrant visa in the United States that allows employers to hire foreign workers in specialty occupations, has an annual cap on the number of issued visas, and requires employers to submit paperwork that ensures compliance with various provisions of the law authorizing the visa.

Specialty occupation

Only professional workers in specialty occupations are allowed to apply for an H1B visa. Although the law does not specifically enumerate all specific jobs which would classify as a speciality occupation, it does provide a list of example occupations and an overall definition. The USCIS works with the Department of Labor and its Standard Occupational Classification database to determine a list of specific occupations.

Department of Homeland Security regulations in Title 8 of the Code of Federal Regulations define specialty occupations as, "an occupation which requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor including, but not limited to, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties, accounting, law, theology, and the arts, and which requires the attainment of a bachelor's degree or higher in a specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States."

Employment

A person in H-1B status must remain employed by their sponsoring employer to maintain their visa status. If employment ends, the individual must either leave the United States, seek a change of status, or obtain a new H-1B sponsorship. As of 2017, USCIS implemented a grace period of up to 60 days following employment termination, during which the individual may remain in the United States to seek new employment or file for a change of status.

Stay duration

The duration of stay for an H-1B visa holder is typically six years. In 2000, some exemptions were added to increase the length of stay for some visa holders:

• Permanent Residency Applications: If the visa holder has filed a Form I-140 or a Permanent Labor Certification before the fifth year of having an H-1B visa, they may extend their H-1B status in one-year increments until the government decides whether or not to grant their permanent residency status.
• Priority Date Delays: If an approved I-140 petition exists but the applicant cannot proceed with the green card process due to a backlog, they may be eligible for a three-year extension.
• Department of Defense Projects: H-1B holders working on specific Department of Defense projects may extend their visa up to ten years.

For certain countries, the three-year extension period has been set to one-year extensions for various reasons. For example, during Melania Trump's time as a H-1B visa holder, she was limited to one year increments, which was the maximum time allowed then per H-1B visa for citizens of Slovenia. Melania Trump became a citizen in 2006.

After six years, H-1B holders who have not obtained permanent residency must spend one year outside the U.S. before reapplying for another H-1B visa, unless they qualify for an extension under the exceptions mentioned above. Visa holders may change to a job in a different specialized occupation than what they were approved for by their initial application so long as their new job is considered a specialized occupation and that their employment is officially sponsored by their new employer.

Annual cap on visas and exemptions

The H-1B visa program is subject to an annual cap of 65,000 visas, with an additional 20,000 visas available for applicants holding advanced degrees from U.S. institutions. Certain employers are exempt from these caps, including:

• Institutions of higher education
• Nonprofit and Governmental research organizations
• cap-exemption employees (those who have already received H-1B visas)
• applications to work in the Northern Mariana Islands and Guam
• Chile and Singapore nationals

Applicants seeking to work in the U.S. territories of the Northern Mariana Islands and Guam are exempt under the Consolidated Natural Resources Act (2008) for petitions filed before December 31, 2029. They are restricted to work only in the territory (NMI or Guam) that they are approved for.

Nationals of Chile and Singapore are subject to free-trade agreements between the U.S. and their respective countries. Those agreements create separate quotas of 1,400 (Chile) and 5,400 (Singapore). Unused application quotas are added to the general cap for H-1B visas for the following year.

Australian citizens are eligible for a separate visa category, the E-3 visa, which specifically designed for Australian nationals. E-3 visas are not subject to the H1B cap and offers an alternative pathway for Australian professionals to seek employment in the United States. It has a separate annual cap of 10,500 visas as well as a different length of duration and application process.

Electronic registration process and lottery

Due to high demand and an annual cap on the number of visas issued, U.S. Citizenship and Immigration Services (USCIS) has implemented an electronic registration and lottery process to manage applications efficiently. Employers seeking to sponsor H-1B workers must create an account on the USCIS online portal. This account enables them to submit registrations for prospective beneficiaries during the designated registration period.

USCIS announces specific dates for the registration period each fiscal year, typically in March. For example, in the FY 2025 H-1B cap season, the registration period was open from March 1 to March 18, 2024. As of April 2024, the registration fee is $215 per beneficiary. This fee is non-refundable and must be paid at the time of registration. Employers provide basic information about their company and each prospective beneficiary. USCIS states that the streamlined process reduces the administrative burden compared to submitting full petitions initially.

The annual H-1B season officially starts in March of each year, when petitioners are allowed to register electronically for their applicant. If more registrations are submitted there will be a random selection also called as H-1B lottery. After the registration period closes, USCIS conducts the lottery and notifies selected registrants. For instance, in the FY 2025 cycle, the first round of selections occurred on March 29, 2024. Employers with selected registrations have a specified period, typically 90 days, to submit complete H-1B petitions (Form I-129) for their beneficiaries. The earliest date for filing these petitions is usually April 1 of the given year.

During the 2024 fiscal year lottery, there were 758,994 eligible electronic registrations and 110,791 people selected for an H-1B visa.

Chosen registrants can begin filing their Labor Conditions Application to the Department of Labor on April 1. It allows a six-month window before the employee start date on October 1.

USCIS has implemented measures to combat fraud and abuse in the registration process, including a beneficiary-specific selection process to prevent multiple registrations for the same individual by different employers. These efforts aim to ensure a fair and equitable selection process.

Legal challenges to the lottery system

In March 2017, a federal judge in Oregon dismissed a lawsuit challenging the H-1B visa lottery system, granting summary judgment in favor of USCIS. The plaintiffs contended that the lottery violated the statutory requirement that visas be issued in the order petitions are filed, advocating for a first-come, first-served approach. The court applied Chevron deference, determining that the term “filed” is ambiguous and that USCIS’s interpretation—considering petitions “filed” only after random selection—was reasonable. Consequently, the H-1B lottery system was upheld as a lawful method for managing the high volume of visa petitions. Due to demand far exceeding supply, USCIS employs a computer-generated random selection process to allocate these visas. The court’s ruling acknowledged USCIS’s discretion in implementing this system to address the overwhelming number of petitions received each year.

In a case filed with the U.S. District Court for the Central District of California Yue Liu v. Alejandro Mayorkas, the case was dismissed without prejudice. The petitioner, Yue Liu. Liu, sought to compel the adjudication of her asylum application, which had been pending for over six years. The parties agreed that USCIS would interview Liu on July 30, 2024, and jointly requested a stay of the case until December 11, 2024. To conserve judicial resources, the court dismissed the action without prejudice, allowing either party to reopen the case if necessary.

Labor Condition Application

Before an employer can hire a foreign worker under the H-1B visa program, an employer must submit a Labor Condition Application (LCA) to the U.S. Department of Labor for certification. The LCA is a legal document that ensures the employment of H-1B workers will not harm the wages or working conditions of U.S. workers in similar roles.

The LCA is designed to protect both U.S. and foreign workers by setting standards for wages and working conditions. Employers are prohibited from using the H-1B program to replace U.S. workers during labor disputes or to exploit foreign workers by offering substandard wages. Employers must also keep detailed public records, making LCAs available for inspection by the Labor Department and members of the public upon request. The required forms to fulfill this requirement are Forms ETA-9035 and 9035. The Labor Department has different requirements for workers who are dependent on H1-B visa workers or not.

Basic attestations for all employers hiring H-1B visa workers:

• Pay the nonimmigrant workers at least the local prevailing wage or the employer's actual wage, whichever is higher; pay for non-productive time in certain circumstances; and offer benefits on the same basis as for U.S. workers;
• Provide working conditions for H-1B, H-1B1, or E-3 workers that will not adversely affect the working conditions of workers similarly employed;
• Not employ an H-1B, H-1B1, or E-3 worker at a location where a strike or lockout in the occupational classification is occurring, and notify ETA of any future strike or lockout; and
• On or within 30 days before the date the LCA is filed with ETA, provide notice of the employer's intent to hire H-1B, H-1B1, or E-3 workers. The employer must provide this notice to the bargaining representative of workers in the occupation in which the H-1B, H-1B1, or E-3 worker will be employed. If there is no bargaining representative, the employer must post such notices in conspicuous locations at the intended place(s) of employment, or provide them electronically.

• The employer will not displace any similarly employed U.S. worker within 90 days before or after the date of filing of any visa petition supported by an LCA;
• The employer will not place any H-1B worker employed pursuant to the LCA at the worksite of another employer unless the employer first makes a bona fide inquiry as to whether the other employer has displaced or intends to displace a similarly employed U.S. worker within 90 days before or after the placement of the H-1B worker, and the employer applicant has no contrary knowledge; and
• The employer, before petitioning for H-1B status for any alien worker pursuant to an H-1B LCA, took good faith steps to recruit U.S. workers for the job for which the alien worker is sought, at wages at least equal to those offered to the H-1B worker. Also, the employer will offer the job to any U.S. worker who applies and is equally or better qualified than the H-1B worker. This attestation does not apply if the H-1B worker is a "priority worker" (see Section 203(b) (1) (A), (B), or (C) of the INA).

Additional rules apply to employers who are dependent (15 percent or more of their workforce) or who have violated rules with the Department of Labor in the past.

Taxation of H-1B visa holders

Income tax obligations of individuals with H-1B status depend on whether they are classified as resident aliens or nonresident aliens for tax purposes. This classification is determined using either the green card test or the substantial presence test established by the Internal Revenue Service.

An individual qualifies as a resident alien if they hold a green card issued by USCIS or meet the substantial presence test. The substantial presence test evaluates physical presence in the United States over a three-year period, counting all days present in the current year, one-third of the days in the previous year, and one-sixth of the days two years prior. Brief transits through the U.S., such as commuting from Canada to Mexico, or stays due to medical conditions, are excluded. Exempt individuals—including diplomats, students, teachers, and athletes present for specific events—are also excluded.

Those who meet the criteria for residency are taxed similarly to U.S. citizens and must report all income earned worldwide. In contrast, nonresident aliens are taxed only on income that is effectively connected to U.S. trade or business activities or income sourced within the United States. Nonresident aliens may benefit from deductions, credits, and tax treaties between the U.S. and their home countries.

In cases where an individual's tax status changes during the year, they are classified as dual-status taxpayers and must file separate returns for the periods they were considered nonresidents and residents. Alternatively, some individuals may elect to be treated as residents for the entire year to simplify filing requirements, though this option requires paying taxes on global income for the full year.

Spouses filing jointly must include a valid Individual Taxpayer Identification Number (ITIN) or Social Security number to comply with IRS rules, regardless of their visa status.

Employers of H-1B workers must withhold Social Security and Medicare taxes, and H-1B visa holders who are permanent residents may qualify for Social Security benefits upon retirement if they have contributed payroll taxes for at least 40 quarters (10 years). However, eligibility may be affected if the individual moves abroad and resides in a country with its own pension or social insurance system. To address potential gaps in eligibility, the U.S. has totalization agreements with several countries, allowing workers to combine credits earned in both countries to qualify for benefits. These agreements also prevent workers from being taxed twice for Social Security contributions.

H-1B and permanent immigration intention

Even though the H-1B visa is a non-immigrant visa, it is one of the few temporary visa categories recognized as dual intent, meaning an H-1B holder could legally have an immigration intent (apply for and obtain the green card) while still being a holder of the H-1B visa. Effectively, the non-immigrant visa may eventually lead to permanent residence; companies often support it with the agreement to support the employee with green card petitions.

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 because requirement to maintain a foreign address for this non-immigrant classification was removed in the Immigration Act of 1990. The Trump administration in 2017 expressed its dislike of the use of the H-1B visa, a nonimmigrant visa, as a pathway to permanent residence, and said it intended to restructure the immigration/permanent residence pathway with efficient systems such as Points-based immigration system. In apparent response, some green card seekers looked to alternatives, like the EB-5 visa, which offers better prospects for permanent immigration than the H-1B visa. As a response to the abuse of H-1B visas, groups like U.S. Tech Workers advertised opposition posters throughout San Francisco's Bay Area Rapid Transit (BART) stations and trains.

H-1B visa dependents

H-1B visa holders can bring immediate family members (spouse and children under 21) to the United States under the H-4 visa category as dependents.

An H-4 visa holder may remain in the U.S. as long as the H-1B visa holder retains legal status. An H-4 visa holder is allowed to attend school, apply for a driver's license, and open a bank account in the United States.

Effective May 26, 2015, United States Citizenship and Immigration Services allows some spouses of H-1B visa holders to apply for eligibility to work unrestricted in the United States. Under the rule, the H-1B worker must either be the principal beneficiary of an approved Immigrant Petition for Alien Worker (Form I-140) or have H-1B status under the American Competitiveness in the Twenty-first Century Act of 2000, as amended by the 21st Century Department of Justice Appropriations Authorization Act, and the spouse must be in the United States with H-4 status. The spouse would need to file Form I-765, Application for Employment Authorization, with supporting documents and the required filing fee. The spouse is authorized to work in the United States only after the Form I-765 is approved and the spouse receives an Employment Authorization Document card. In 2022, the U.S. government issued 82,616 work permits for H-1B spouses.

Travel

Applying for an H-1B visa stamp at a U.S. Consulate abroad

When an H-1B worker travels outside the U.S. for any reason (other than to Canada or Mexico, for 30 days or less), he or she must have a valid visa stamped on his or her passport for re-entry in the United States. If the worker has an expired stamp but an unexpired I-797 petition approval notice, he or she will need to appear in front of a Department of State Consular Officer at a U.S. Embassy to get a new H-1B visa stamp.

Consular Officers are instructed by the Foreign Affairs Manual per 9 FAM 402.10-9(A.a) that an approved USCIS petition is evidence that the requirements for H-1B visa classification have been met. In other words, when an H-1B worker appears for stamping, consular officers are not being tasked to re-adjudicate whether their job is a specialty occupation, whether the applicant has the right qualifications on paper and whether other key requirements relating to the position are fulfilled. However, the approval of an I-129 petition by USCIS does not relieve the applicant of establishing H-1B visa eligibility: consular officers can refuse to issue a visa if they suspect, based on the interview or any documents submitted, that there has been fraud or misrepresentation in front of USCIS by either the employer or visa applicant. The Foreign Affairs Manual instructs consular officers that they "benefit from cultural and local knowledge that adjudicators at USCIS do not possess, making it easier to spot exaggerations or misrepresentation in qualifications". In such a case, the consular officer refuses the visa under section 221(g) of the U.S. Immigration and Nationality Act (as outlined in 9 FAM 402.10-9(A.b)) and then either asks for more evidence from the applicant or may simply need more time to make a final decision. If the officer confirms there are issues with the application, the underlying H-1B petition is sent back to USCIS for reconsideration. Upon receipt of a memo from the consular officer who refused the visa explaining the reasons for his or her decision, USCIS then either confirms the petition is valid as initially approved, or definitively revokes it. Consular officers themselves cannot revoke USCIS-approved petitions.

In some visa application cases, H-1B workers can be required to undergo "administrative processing," involving extra background checks of different types. Under current rules, these checks are supposed to take ten days or less, but in some cases, have lasted years.

Domestic Visa Renewal Pilot Program (2024)

In a bid to streamline the H-1B visa renewal process, the U.S. Department of State launched a limited Domestic Visa Renewal Pilot Program from January 29 to April 1, 2024. This initiative allowed a select group of H-1B visa holders who previously received their visas from specific consulates in Canada or India to renew their visas domestically, bypassing the need for an international trip. The program, capped at 20,000 participants, required applicants to secure a slot in one of the five weekly allotments of 4,000 filing slots. It was specifically designed for H-1B renewals and targeted individuals not subject to reciprocity fees or in-person interview waivers. It excluded those whose previous issued H-1B visa had a "Clearance Received" annotation (indicating a Security Advisory Opinion was determined as necessary before making a decision on issuance).

Other travel benefits

Additionally, an individual with a valid H-1B visa does not need a visa to enter Costa Rica for tourism for up to 30 days. The H-1B visa must be stamped in the passport and be valid for at least six months. The passport needs to be valid for at least six months after entering Costa Rica.

Job loss departure requirement

If an employer lays off an H-1B worker, the employer is required to pay for the laid-off worker's transportation outside the United States.

If an H-1B worker is laid off or quits, the worker has a grace period of 60 days or until the I-94 expiration date, whichever is shorter, to find a new employer or leave the country.

There also is a 10-day grace period for an H-1B worker to depart the United States at the end of his/her authorized period of stay. This grace period only applies if the worker works until the H-1B expiration date listed on his/her I-797 approval notice, or I-94 card.

Application process

The process of getting a H-1B visa has three stages:

• The employer files with the United States Department of Labor a Labor Condition Application (LCA) for the employee, making relevant attestations, including attestations about wages (showing that the wage is at least equal to the prevailing wage and wages paid to others in the company in similar positions) and working conditions.
• With an approved Labor Condition Application, the employer files a Form I-129 (Petition for a Nonimmigrant Worker) requesting H-1B classification for the worker. This must be accompanied by necessary supporting documents and fees.
• Once the Form I-129 is approved, the worker may begin working with the H-1B classification on or after the indicated start date of the job, if already physically present in the United States in valid status at the time. If the employee is outside the United States, he/she may use the approved Form I-129 and supporting documents to apply for the H-1B visa. With a H-1B visa, the worker may present himself or herself at a United States port of entry seeking admission to the United States, and get a Form I-94 to enter the United States. (Employees who started a job on H-1B status without a H-1B visa because they were already in the United States still need to get a H-1B visa if they ever leave and wish to re-enter the United States while on H-1B status.)

Premium processing

An applicant may choose to pay for Premium Processing Service. U.S. Citizenship and Immigration Services guarantees processing of applications and petitions within 15 calendar days. U.S. Citizenship and Immigration Services will send an approval notice, a denial notice, a notice of intent to deny, a request for additional evidence, or open an investigation for fraud or misrepresentation within 15 calendar days of receiving Form I-907: Request for Premium Processing Service. If the 15-calendar-day window is not satisfied, then the Premium Processing Fee will be refunded. In the past, USCIS suspended, then resumed the premium processing program.

History

The H-1B visa originated from the H-1 visa established under the Immigration and Nationality Act (1952). The Immigration Act of 1990 later divided the H-1 visa into two categories: H-1A for nurses and H-1B for specialty occupations. The 1990 law also introduced an annual cap of 65,000 H-1B visas per fiscal year and required employers to submit labor condition applications to ensure compliance with wage and working condition standards.

Subsequent legislative changes further modified the H-1B program. Updates occurred in 1998, 2000, and 2003, with the latter specifically creating provisions for applicants who are citizens of Singapore or Chile. Due to the differences in respective free-trade agreements between the U.S. and either country, there are different caps set separately from the H1-B visa. Additional changes were made through the H-1B Visa Reform Act of 2004, as well as amendments in 2008 and 2009. The USCIS has continued to revise H-1B rules in the years following these legislative actions.

Legislation history

Visa creation

On June 27, 1952, Congress passed the Immigration and Nationality Act after overriding a veto by President Harry S. Truman. For the first time, the Immigration and Nationality Act codified United States' immigration, naturalization, and nationality law into permanent statutes, and it introduced a system of selective immigration by giving special preference to foreigners possessing skills that are urgently needed by the country. Several different types of visas were established, including a H-1 visa for "an alien having a residence in a foreign country which he has no intention of abandoning who is of distinguished merit and ability and who is coming temporarily to the United States to perform temporary services of an exceptional nature requiring such merit and ability." The term "distinguished merit and ability" was not new to United States immigration law; it had previously been used as a qualification for musicians and artists who had wanted to enter the United States. The visa was called an H-1 visa because it had been made into law by section 101(15)(H)(1) of the Immigration and Nationality Act.

The Immigration Act of 1990

The Immigration Act of 1990 was signed into law by President George H. W. Bush on November 20, 1990. The H-1 visa was split into two different visas. The law created the H-1A visa for nurses, and the H-1B visa was established for workers in a "specialty occupation". The Immigration Act defined a specialty occupation as "an occupation that requires theoretical and practical application of a body of highly specialized knowledge, and attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States". In order to qualify, a visa applicant needed any applicable state license for the particular occupation and either an educational degree related to the occupation or an equivalent amount of professional experience. For the first time, there was established a quota of 65,000 H-1B visas available each fiscal year, rather than an unlimited amount before. An employer was required by law to pay such employees at least the prevailing wage for the position, and employers were required to make certain attestations by way of a Labor Condition Application.

The American Competitiveness and Workforce Improvement Act of 1998

President Bill Clinton signed the American Competitiveness and Workforce Improvement Act into law on October 21, 1998. The law required that each application for an H-1B must include an additional $500 payment, which would be used for retraining U.S. workers in order to reduce the need for H-1B visas in the future. The quota of H-1B visas was increased from 65,000 to 115,000 for fiscal years 1999 and 2000 only. For an employer with a large number of employees in H-1B status or who had committed a willful misrepresentation in the recent past, the employer attest that the additional H-1B worker would not displace any U.S. workers. The act also gave investigative authority to the United States Department of Labor.

The American Competitiveness in the 21st Century Act of 2000

On October 17, 2000, the American Competitiveness in the 21st Century Act was signed by President Bill Clinton. Under the law, the required retraining fee was increased from $500 to $1,000. The quota was increased to 195,000 H-1B visas in fiscal years 2001, 2002, and 2003 only. Nonprofit research institutions sponsoring workers for H-1B visas became exempt from the H-1B visa quotas.

Under the law, a worker in H-1B status who had already been subject to a visa quota would not be subject to quotas if requesting a transfer to a new employer or if applying for a three-year extension. An H-1B worker became allowed to change employers if the worker had an I-485 application pending for six months and an approved I-140 and if the new position is substantially comparable to their current position.

In the case of an H-1B holder's spouse in H-4 status, the spouse may be eligible to work in the United States under certain circumstances. The spouse must have an approved "Immigration Petition for Alien Worker" form or the spouse must have been given H-1B status under sections 106(a) and (b) of the American Competitiveness in the 21st Century Act of 2000.

Free trade agreements in 2003

Congress ratified the Singapore–United States Free Trade Agreement in 2003. It ratified the Chile–United States Free Trade Agreement later that year. With these free trade agreements, a new H-1B1 visa was established as being available solely for people from either Singapore or Chile. Unlike H-1B visas that had a limited renewal time, H-1B1 visas can be renewed indefinitely. H-1B1 visas are subject to a separate quota of 6,000 per fiscal year. Unlike H-1B visas, an H-1B1 visa is not a dual-intent visa, and an H-1B1 applicant must convince the visa officer that they have no intention of permanently immigrating to the United States.

The H-1B Visa Reform Act of 2004

The H-1B Visa Reform Act of 2004 was a part of the Consolidated Appropriations Act, 2005, which President George W. Bush signed on December 6, 2004. For employers with 26 or more employees, the required retraining fee was increased from $1,000 to $1,500, and it was reduced to $750 for all other employers. A new $500 "anti-fraud fee" was established that was required to be paid by the employer with the visa application. While the H-1B quota returned to 65,000 per year, the law added 20,000 visas for applicants with J-1 status with either a master's degree or a doctorate degree from a U.S. graduate school. Governmental entities became exempt from H-1B visa quotas. According to the law, H-1B visas that were revoked due to either fraud or willful misrepresentation would be added to the H-1B visa quota for the following fiscal year. The law also allowed one-year extensions of H-1B for H-1B visa holders who were applying for permanent residency and whose petitions had been pending for a long time. The United States Department of Labor had more investigative authority, but an employer could defend against misdeeds by using either the Good Faith Compliance Defense or the Recognized Industry Standards Defense.

Proposed legislation in 2007

Senators Dick Durbin of Illinois and Charles Grassley of Iowa began introducing "The H-1B and L-1 Visa Fraud & Prevention Act" in 2007. According to Durbin, speaking in 2009, "The H-1B visa program should complement the U.S. workforce, not replace it;" "The…program is plagued with fraud and abuse and is now a vehicle for outsourcing that deprives qualified American workers of their jobs." Compete America, a tech industry lobbying group, opposed the proposed legislation.

The Consolidated Natural Resources Act of 2008

The Consolidated Natural Resources Act of 2008 federalized immigration in the U.S. territory of the Commonwealth of the Northern Mariana Islands, and it stipulated that, during a transition period, numerical limitations would not apply to otherwise qualified workers in the H visa category in the U.S. territories of Guam and the Commonwealth of the Northern Mariana Islands. The exemption does not apply to any employment to be performed outside of Guam or the Commonwealth of the Northern Mariana Islands.

The Employ American Workers Act of 2009

The Employ American Workers Act, as part of the American Recovery and Reinvestment Act of 2009, was signed into law by President Barack Obama on February 17, 2009. For employers who applied to sponsor a new H-1B and who had received funds under either the Troubled Asset Relief Program (TARP) or the Federal Reserve Act Section 13, the employers were required to attest that the additional H-1B worker would not displace any U.S. workers and that the employer had not laid off, and would not lay off, any U.S. worker in a job 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.

Proposed legislation in 2017-2018

In 2017, the U.S. Congress considered more than doubling the minimum wage required for an H-1B holder from the $60,000 (USD) established in 1989 and unchanged since then. The High Skilled Integrity and Fairness Act, introduced by U.S. Rep. Zoe Lofgren of California, would raise H-1B holders' minimum salaries to $130,000. The action was criticized in the Indian press for confirming "the worst fears of IT companies" in the wake of the reforms discussed during the 2016 Presidential election by both major candidates, and for causing a 5% drop in the BSE SENSEX index. Though, India in general has been welcoming this change and requirement since 2015. Lofgren's office described it as a measure to "curb outsourcing abuse" citing unfair tech hiring practices by employers including Disney and University of California San Francisco.

Executive action history

Since 2008 the United States Citizenship and Immigration Services has updated and issued new rules regarding the H-1B visa.

STEM Optional Practical Training extension and cap-gap extension

On April 2, 2008, the U.S. Department of Homeland Security (DHS) Secretary Michael Chertoff announced a 17-month extension to the Optional Practical Training for students in qualifying STEM fields. The Optional Practical Training extension was included in the rule-change commonly referred to as the H-1B Cap-Gap Regulations. The OPT extension only benefits foreign STEM (Science, Technology, Engineering, or Mathematics) students and is not available to foreign students of other disciplines. The 17-month work-authorization extension allows the foreign STEM student to work up to 29 months in total on the student visa, allowing the STEM student multiple years to obtain an H-1B visa. To be eligible for the 12-month work-permit, any bachelor's degree in any field of study is valid. For the 17-month OPT extension, a student must have received a STEM degree in one of the approved majors listed on the USCIS website. The STEM extension can be combined with the cap-gap extension. The cap-gap extension was also created in 2008 and allows a STEM OPT worker who has a pending or approved H-1B visa to remain in the U.S until the H-1B visa begins.

The 2010 Neufeld Memo

On January 8, 2010, United States Citizenship and Immigration Services issued a memorandum stating that there must be a clear employee-employer relationship between the petitioner (employer) and the beneficiary (prospective visa holder). The memorandum 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.

An employer must maintain a valid employee-employer relationship throughout the period of the worker's stay in the United States. The employer must have actual control or the right to control the employee and to be able to decide when, where, and how the employee will be employed and performs work.

A valid employee-employer relationship typically includes many of the following: supervising the worker on- and off-site; maintaining such supervision through calls, reports, or visits; having a right to control the work on a day-to-day basis if such control is required; providing the worker with the tools and equipment needed for the job; having the ability to hire, pay, and terminate the worker's job; evaluating the worker's products, progress, and performance; provision of some type of employee benefits; allowing the worker to use the employer's proprietary information when performing work; assigning work to the worker that produces an end-product related to the employer's business; and having the ability to control the manner and means in which the worker accomplishes tasks. The memorandum further states that "common law is flexible about how these factors are to be weighed".

Third-party placement firms and staffing firms do not qualify for H-1B status because they fail the control test.

The Tech Serve Alliance filed a lawsuit against implementing the memo. Senator John Cornyn brokered a meeting between a coalition of IT outsourcing firms and USCIS, which stopped the implementation of the Neufeld Memo.

2015 H-1B dependent work authorization

In 2015, the U.S. Department of Homeland Security issued a rule that allowed certain spouses of H-1B workers to be eligible for work authorization.

Under the rule, the H-1B worker must either be the principal beneficiary of an approved Immigrant Petition for Alien Worker (Form I-140) or have H-1B status under the American Competitiveness in the Twenty-first Century Act of 2000, as amended by the 21st Century Department of Justice Appropriations Authorization Act, and the spouse must be in the United States with H-4 status.

The U.S. Department of Homeland Security stated that it issued the rule in order to ease the financial burden that these families may experience as they transition from nonimmigrant to lawfully permanent resident status. The rule also reduces disincentives for H-1B workers to leave the United States, which disrupts the United States businesses employing these workers.

2015 work site guidance change

In 2015, United States Citizenship and Immigration Services issued final guidance stating that if an H-1B worker whose work site location changes to a different metropolitan area, its material change that requires the employer to certify a new Labor Condition Application to the Department of Homeland Security. Temporary work site changed do not require a new LCA. Examples include when a H-1B worker attends a training session, a seminar, or a conference of a short duration or when the H-1B worker is temporarily moved to a short-term placement of less than 30 days. If the amended H-1B petition is disapproved but the original petition remains valid, then the H-1B worker retains their H-1B status as long as they return to work at the original work site.

2016 H-1B maximum stay clarification

On December 5, 2016, United States Citizenship and Immigration Services issued a memorandum to provide guidance regarding periods of admissions for an individual in H-1B status. The memorandum stated that time spent as either an H-4 dependent or an L-2 dependent does not reduce the maximum allowable period of stay available to individuals in H-1B status.

2017 employment termination grace period rule

On November 18, 2017, United States Citizenship and Immigration Services released a rule that affects individuals in H-1B status whose employment ends. In these cases, the individual has a grace period of 60 days to leave the United States or change to another legal status that allows them to remain in the United States.

2017 H-4 victims of domestic violence work authorization

In 2005, the Violence Against Women and Department of Justice Reauthorization Act of 2005 allowed work authorization for victims of domestic violence who are in H-4 status. On February 17, 2017, United States Citizenship and Immigration Services instituted a process for these victims to apply for work authorization.

Eligible individuals include current H-1B visa spouses, and individuals whose marriage ended because of battery or extreme cruelty perpetrated by the individual's former spouse. The individual must also have entered the United States in an H status, must continue to be in H-4 status, and were themselves or their child battered or subjected to extreme cruelty perpetrated by the H-1B spouse. The spouse's application must include evidence of the abuse.

Before this policy was implemented, an abused spouse in H-4 status would be required to leave the United States the date the person divorced the abusive spouse. The divorced spouse now has a way to legally remain in the United States and legally work in the United States after the divorce is finalized or pending. If approved, the authorization is valid for two years.

2017 computer-programming position memo

A memorandum from December 22, 2000, stated that, because most computer-programming positions required a bachelor's degree, computer programming was considered a specialty occupation that qualified for an H-1B visa. On March 31, 2017, United States Citizenship and Immigration Services released a memorandum stating that computer programming would no longer be automatically considered a specialty occupation, partly because a bachelor's degree was no longer typically required of these positions. An application for an H-1B visa for a computer programmer must sufficiently describe the duties and the level of experience and responsibilities of the position in order to demonstrate how the position is a senior, complex, specialized, or unique computer-programming position rather than an entry-level position in order to qualify for an H-1B visa.

In addition, the United States Department of Justice warned employers not to discriminate against U.S. workers by showing a preference for hiring H-1B workers.

2017 Buy American, Hire American executive order

On April 18, 2017, President Trump signed an executive order that directed federal agencies to implement a "Buy American, Hire American" strategy, a key pledge during the campaign. At a press briefing, the executive order directed federal agencies such as the Department of Labor, Department of Justice, Department of Homeland Security, and Department of State to implement a new system that favors higher-skilled, higher-paid applicants. The executive order is intended to order federal agencies to review and propose reforms to the H-1B visa system. Furthermore, these departments will "fill in the details with reports and recommendations about what the administration can legally do." Trump stated that the executive would "end the theft of American prosperity," which he said had been brought on by low-wage immigrant labor.

On January 9, 2018, the USCIS said that it was not considering any proposal that would force H-1B visa holders to leave the United States during the green-card process. USCIS said an employer could request extensions in one-year increments under section 106(a)–(b) of the American Competitiveness in the 21st Century Act instead.

2018 extension rejection rule

On June 28, 2018, the United States Citizenship and Immigration Services announced that, when a person's request for a visa extension is rejected, the person will be deported from the United States. The Trump administration said they are not considering any proposal that would force H-1B visa holders to leave the country.

2020 H-1B entry suspension

On April 22, 2020, President Donald Trump signed a presidential proclamation that temporarily suspended the entry of people with non-immigrant visas, including H-1B visas. On June 22, 2020, President Trump extended the suspension for H-1B visa holders until December 31, 2020. On December 31, 2020, President Trump issued a presidential proclamation extending the suspension of entry until March 31, 2021, because they would pose "a risk of displacing and disadvantaging United States workers during the economic recovery following the COVID-19 outbreak".

2020 H-1B lottery rule

On October 28, 2020, a new rule to reform the H-1B lottery by prioritizing workers with the highest wage was approved.

2021 H-1B entry suspension expiration

President Joe Biden allowed the suspension to expire on March 31, 2021, which allowed H-1B visa holders to enter the U.S. beginning on April 1, 2021.

General history

2015 spotlight on H-1B visas

There was extensive reporting in 2015 on problems with the existing H-1B visa programs. Journalists reported that many prominent companies such as Disney and Southern California Edison were replacing American workers using the H-1B visa program. Disney used H-1B outsourcing firm Cognizant to replace its American IT workers. The company required these workers to train their replacements in order to receive severance.

In an editorial published in June 2015, the editorial board of The New York Times stated that loopholes and lax enforcement of the H-1B visa program has resulted in exploitation of both visa holders and American workers.

In June 2015, ten senators requested the U.S. Department of Labor to open an investigation of outsourcing of technical tasks by Southern California Edison to Tata Consultancy Services and Infosys, then laying off 500 technology workers. After a ten-month investigation, the U.S. Department of Labor determined that no charges should be filed against any of the firms.

In 2015 and 2016, the Senate Judiciary Committee held hearings on problems with the H-1B visa. On March 17, 2015, Chairman Chuck Grassley of the Senate Judiciary Committee held a hearing on "Immigration Reforms Needed to Protect Skilled American Workers". On February 25, 2016, Immigration Subcommittee Chairman Jeff Sessions held a hearing on "The Impact of "High-Skilled" Immigration on U.S. Workers. These hearings' witnesses included AFL-CIO President Richard Trumka, Howard University Associate Professor Ron Hira, American Immigration Council Benjamin Johnson, Washington Alliance of Technology Workers Attorney John Miano, former Disney IT Engineer Leo Perrero, Colgate University Associate Professor of Economics Chad Sparber, and Rutgers University Professor Hal Salzman.

Senator Chuck Grassley of Iowa, chairman of the committee commented on the H-1B visa during the March 17th hearing:

The program was intended to serve employers who could not find the skilled workers they needed in the United States. Most people believe that employers are supposed to recruit Americans before they petition for an H-1B worker. Yet, under the law, most employers are not required to prove to the Department of Labor that they tried to find an American to fill the job first. And, if there is an equally or even better qualified U.S. worker available, the company does not have to offer him or her the job. Over the years the program has become a government-assisted way for employers to bring in cheaper foreign labor, and now it appears these foreign workers take over – rather than complement – the U.S. workforce.

2016 election policy issue

The H-1B visa became an issue in the 2016 United States presidential election. According to Computerworld, candidate Donald Trump took a stance to "pause" and re-write the H-1B system. Additionally, he invited guest speakers to raise awareness of the hundreds of IT workers displaced by H-1B guest workers during his rallies. Candidate Donald Trump stated his policy position and solution on H-1Bs in his campaign website on immigration policy:

"Increase prevailing wage for H-1Bs.

We graduate two times more Americans with STEM degrees each year than find STEM jobs, yet as much as two-thirds of entry-level hiring for IT jobs is accomplished through the H-1B program. More than half of H-1B visas are issued for the program's lowest allowable wage level, and more than eighty percent for its bottom two. Raising the prevailing wage paid to H-1Bs will force companies to give these coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the U.S., instead of flying in cheaper workers from overseas. This will improve the number of black, Hispanic and female workers in Silicon Valley who have been passed over in favor of the H-1B program. Mark Zuckerberg’s personal Senator, Marco Rubio, has a bill to triple H-1Bs that would decimate women and minorities.

Requirement to hire American workers first.

Too many visas, like the H-1B, have no such requirement. In the year 2015, with 92 million Americans outside the workforce and incomes collapsing, we need companies to hire from the domestic pool of unemployed. Petitions for workers should be mailed to the unemployment office, not USCIS."

Candidate Hillary Clinton spoke negatively of H-1B workers being hired because they are less expensive and since they are reliant on the employer, more likely to be compliant during abuse. Clinton said that she was unlikely to consider the H-1B system individually and only would look towards reforms as part of a comprehensive immigration reform.

Presidential candidate Bernie Sanders opposed guest worker programs and was also skeptical about skilled immigrant (H-1B) visas, saying, "Last year, the top 10 employers of H-1B guest workers were all offshore outsourcing companies. These firms are responsible for shipping large numbers of American information technology jobs to India and other countries." In an interview with Vox he stated his opposition to an open borders immigration policy, describing it as:

...a right-wing proposal, which says essentially there is no United States...you're doing away with the concept of a nation-state. What right-wing people in this country would love is an open-border policy. Bring in all kinds of people, work for $2 or $3 an hour, that would be great for them. I don't believe in that. I think we have to raise wages in this country, I think we have to do everything we can to create millions of jobs.

2019 H-1B data

In 2019, USCIS unveiled a H-1B employer data hub which provides information on employee H-1B visa petitions starting from fiscal year 2009.

In 2019, the USCIS Office of Policy and Strategy released the latest population estimate of H-1B visa workers in the United States. As of September 30, 2019, there were 583,420 people authorized to work on an H-1B visa. First, the agency estimated the number of approved H-1B petitions. The estimated number of approved unique beneficiaries numbered 619,327 people. USCIS estimated the number of foreign nationals denied by the State Department subtracting 2,100 visas. Furthermore, USCIS subtracted out the number of H-1B workers who adjusted to legal permanent residency status (estimated at 32,332) and those who requested another non-immigration status (estimated at 1,475).

2021 electronic registration system

In 2021, USCIS rolled out its first electronic registration system for the H-1B lottery.

Economic impact

There is a divide between economists and academics about the impact H-1B visas have on innovation, the effect on U.S. workers, and overall benefits to the U.S. economy.

Studies have shown that H-1B visas have welfare-improving effects for Americans, leading to significant wage gains, lower consumer prices, greater innovation, and greater total factor productivity growth. H-1B visas have led to lower prices for consumers, greater output, and improved performance by companies. A study found that H-1B visa holders have been associated with greater innovation and economic performance.

Meanwhile, other studies have shown the exact opposite. A National Bureau of Economic Research (NBER) paper concluded that firms who received H-1B visas do not necessarily innovate or grow faster, nor patent more than firms who do not.

Economists have also found that H-1B visas lead to lower wages and employment for competing U.S. workers. A paper by 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."

A 2016 study found that H-1B visas kept wages for U.S. computer scientists 2.6% to 5.1% lower, and employment in computer science for U.S. workers 6.1% to 10.8% lower, but resulted in greater production efficiency, lowered the prices of IT products, raised the output of IT products and caused substantially higher profits for IT firms.

Criticism

Corporate welfare

Critics of the H-1B visa program say it is a government labor subsidy for corporations. 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 Norman Matloff, who testified to the U.S. House Judiciary Committee Subcommittee on Immigration on the H-1B subject.

Professor Matloff describes four types of labor savings for corporations and employers.

• Type I labor savings is where employers pay H-1Bs less than similarly qualified American workers.
• Type II labor savings are where employers hire younger H-1Bs in lieu of older and more expensive American workers.
• Type III labor savings are where employers force H-1B workers to work longer hours.
• Type IV labor savings are when the oversaturation of H-1B workers suppresses wages in the labor market.

American technology companies are claimed to benefit most from Type II labor savings, where these firms hire a 25-year-old H-1B worker instead of a 50-year-old American programmer.

No labor shortage

Academic researchers have found no labor shortage in STEM, undercutting the primary reason for the H-1B visa's existence.

In 2022, Howard University public policy professor Ron Hira found there was no shortage in STEM due to stagnant wages in IT and a seven percent decline in real wages for engineers. In the past, he has called the IT talent shortage "imaginary," a front for companies that want to hire cheaper foreign guest workers.

Studies from Rutgers University professor Hal Salzman, and co-authors B. Lindsay Lowell and Daniel Kuehn, have concluded that the U.S. has been employing only 30% to 50% of its newly degreed able and willing STEM workers to work in STEM fields.

A 2012 IEEE announcement of a conference on STEM education funding and job markets stated "only about half of those with under-graduate STEM degrees actually work in the STEM-related fields after college, and after 10 years, only some 8% still do."

Rutgers University Public Policy Professor Hal Salzman points to simultaneous industry layoffs, when industry claims labor shortage. In his Senate Judiciary testimony, he states that between 2006 and 2016, the IT industry (the predominant user of the H-1B visa) laid off on average 97,000 workers per year, more than the number of 74,000 H-1B workers brought for the IT industry.

UC Davis Professor Norman Matloff's University of Michigan Journal of Law Reform paper 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 annual cap on H-1B visas, and have succeeded in getting various exemptions passed. 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.

According to a study conducted by John Miano and the Center for Immigration Studies, there is no empirical data to support a claim of employee worker shortage. Citing studies from 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. Hire Americans First has 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.

Wage depression

Wage depression as a result of an increased supply of discounted guest workers is a chronic complaint critics have about the H-1B program. In the 21st century, labor experts have found that guest workers are abundantly available in times of wage decline and weak workforce demand.

The Economic Policy Institute found that sixty percent of certified H-1B positions were below the local median wage. In Washington D.C, companies hiring a level 1 entry-level H-1B software developer received a discount of 36%, or $41,746. For level II workers, companies received a discount of 18%, or $20,863.

In 2014, The Department of Homeland Security annual report indicates that H-1B workers in the field of Computer Science are paid a mean salary of $75,000 annually, almost 25,000 dollars below the average annual income for software developers and 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.

Prevailing wage loopholes

The Labor Condition Application (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 get around these provisions and avoid paying the actual prevailing wage despite stiff penalties for abusers.

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 sources 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 American First has posted several hundred first hand accounts of individuals negatively impacted by the program. According to attorney John Miano, the H-1B prevailing wage requirement is "rife" with loopholes.

Internal "brain drain"

Opponents of the H-1B visa program says that wage depression in STEM causes young American college graduates to stop pursuing these fields.

Discrimination

Against American citizens

Critics of the H-1B visa program say the program enables Silicon Valley to employ discrimination against U.S. citizens and permanent residents. In 2021, Facebook settled a claim with the Department of Justice that it discriminated against U.S. workers in favor of temporary visa holders. The company paid a $4.75 million civil penalty and set aside $9.5 million for eligible victims.

Ageism

Critics of the H-1B visa program say the program enables Silicon Valley to employ age discrimination against older workers.

Wage slavery

Critics contend that H-1B holders constitute a modern-day form of high-tech indentured servants, Guest workers on H-1B visas in the IT sector have limited employer mobility compared to U.S. workers. 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.

Some workers who come to the U.S. on H-1B visas receive poor, unfair, and illegal treatment by brokers who place them with jobs in the US, according to a report published in 2014. The United States Trafficking Victims Protection Reauthorization Act of 2013 was passed to help protect the rights of foreign workers in the United States, and the U.S. Department of State distributes pamphlets to inform foreign workers of their rights.

Companies have stolen the wages of H-1B workers. Labor researchers found that HCLTech stole $95 million from its H-1B visa workers annually.

Critics say that employers exercise outsized control over H-1B workers since the visa ties the workers to the employer. Additionally, these workers are less likely to complain about poor working conditions for fear of visa revocation and deportation.

Dual intent

Critics of the H-1B visa program say the reason for the backlog for employer-sponsored green cards is in part due to the dual intent nature of the H-1B visa, allowing a temporary non-immigrant to gain an employer-sponsored green card. The issue critics have with dual intent is that both non-immigrant temporary guest workers and people who do intend to immigrate are vying for H-1B visas. The law grants foreign nationals waiting for a green card the ability to extend their H-1B visa past the normal six-year limit.

Body shopping and offshoring

Critics of the program take issue with American and outsourcing companies using H-1B visa workers to body shop and offshore work abroad. Researchers have found that two thirds of IT jobs are offshorable. The remaining third remains onshore in order to be the conduit between American clients and offshore work teams.

The leading users of H-1B visas are Indian outsourcing firms. In 2021, half of the top thirty employers of H-1B visa holders were specifically outsourcing firms. The top 10 H-1B employers in 2014 such as Tata Consultancy, Cognizant, Infosys, Wipro, Accenture, HCL America, and IBM all used the program to ship jobs offshore. 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. Furthermore, even though these IT outsourcing companies have a physical footprint in the United States, they hire temporary foreign guest workers instead.

Senator Dick Durbin stated in a speech on H-1B visa reform:

"The H-1B job visa lasts for three years and can be renewed for three 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 three to six 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."

Of all computers systems analysts and programmers on H-1B visas in the U.S., 74 percent were from Asia.

Large migration of Asian IT professionals to the United States has been a central component to the emergence of the offshore outsourcing industry.

In FY 2009, due to the worldwide recession, applications for H-1B visas by offshore outsourcing firms were significantly lower than in previous years, yet 110,367 H-1B visas were issued, and 117,409 were issued in FY2010.

Computerworld and The New York Times have reported on the inordinate share of H-1B visas received by firms that specialize in offshore-outsourcing, the subsequent inability of employers to hire foreign professionals with legitimate technical and language skill combinations, and the outright replacement of American professionals already performing their job functions and being coerced to train their foreign replacements.

Training foreign replacements

There have been cases where employers used the program to replace their American employees with H-1B employees; in some cases, the laid-off employees were ordered to train their replacements. In 2013 Northeast Utilities laid off 350 tech workers, many of whom trained their replacements who were hired on H-1B visas to do their jobs. In October of 2014, Walt Disney World laid off 250 IT workers, some of whose final assigned task for the company was to train their replacements who'd been hired on H-1B visas. Southern California Edison laid off 540 tech workers in 2014, requiring many to train their replacements who'd been hired on H-1B visas. Fossil laid off 100 tech workers and hired 25 on H-1B visas who were then trained by the laid-off employees in what Fossil termed "knowledge sharing".

Researchers have found that during the 2022 tech layoffs, companies laid off their U.S. workforce while continuing to bring in more H-1B workers. The top 30 H-1B employers in 2022 laid off at least 85,000 workers, while bringing in 34,000 H-1B workers.

Limitations for entrepreneurs and self-employed consultants

Entrepreneurs do not qualify for the H-1B visa. The United States immigration system's EB-5 visa program does permit foreign entrepreneurs to apply for a green card if they make a sufficient investment in a commercial enterprise and intend to create 10 or more jobs in the United States. The University of Massachusetts began a program in 2014 allowing entrepreneurs to found U.S. companies while fulfilling visa requirements by teaching and mentoring on campus, with the university as sponsoring employer. Likewise, self-employed consultants have no visa that would allow them to enter the country and perform work independently for unspecified, extended periods (although, note that a B-1 visa would permit temporary travel to the U.S. to consult for specific periods), so consulting companies have been formed for the sole purpose of sponsoring employees on H-1B visas to allow them to perform work for clients, with the company sharing the resulting profit.

Fraud

The United States 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.

In 2009, federal authorities arrested people for a nationwide H-1B visa scam in which they allegedly submitted false statements and documents in connection with petitions for H-1B visas.

Fraud has included acquisition of a fake university degree for the prospective H-1B worker, coaching the worker on lying to consul officials, hiring a worker for which there is no U.S. job, charging the worker money to be hired, benching the worker with no pay, and taking a cut of the worker's U.S. salary. The workers, who have little choice in the matter, are also engaged in fraud, and may be charged, fined, and deported.

Gaming the visa lottery

Critics of the H-1B lottery criticize that the lottery is randomized and does not select for skill or wage.

Outsourcing companies game the system by filing as many electronic lottery applications as possible (only $10 each) for jobs that do not exist. In 2023, there were 781,000 lottery entries for 85,000 visas. This was partially the result of different companies submitting the same applicant multiple times. USCIS says that there is a high prevalence of fraud with the new electronic registration system.

H-1B visa tables and charts

Approved H-1B applications

H-1B visas issued per year

Top H-1B employers by visa approval

Notes

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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 Archived 2011-01-26 at the Wayback Machine, Testimony to the U.S. House Judiciary Committee, April 1998, updated December 2002
9. CNN, Lou Dobbs, Programmers Guild Interview & Transcript, August 26, 2005
10. Congressional Record: Illegal Aliens Taking American Jobs, June 18, 2003 (House)
11. Center for Immigration Studies, Backgrounder: The bottom of the pay scale, Wages for H-1B Computer Programmer's, John Milano, 2005.

Further reading

• Pittsburgh law firm's immigration video sparks an Internet firestorm, Pittsburgh Post-Gazette, June 22, 2007
• "Lawmakers Request Investigation Into YouTube Video" Archived 2008-02-21 at the Wayback Machine 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
• October 2007 study by The Urban Institute Archived 2010-04-10 at the Wayback Machine – Into the Eye of the Storm: Assessing the Evidence on Science and Engineering Education, Quality, and Workforce Demand B. Lindsay Lowell and Hal Salzman
• Guestworkers in the High-Skill U.S. Labor Market: An Analysis of Supply, Employment, and Wage Trends "(2013) Hal Salzman, Daniel Kuehn, B. Lindsay Lowell Economic Policy Institute"

External links

• U.S. Department of State information on H-1B visa
• U.S. GAO Report on H-1B Problems, PDF format Archived 2011-05-23 at the Wayback Machine
• H-1B Quota Updates from USCIS

• Use mdy dates from January 2005
• United States visas by type
• Employment of foreign-born people
• 1990 introductions