Fall In H1B Visa Demand:

Is It Due To The Increased Scrutiny On H1B Visa Or The Economy?


It has been well documented in the media, that the U.S. (and the world) is currently going through the worst economic crisis since the Great Depression. The USCIS recently stated this is the first time in the recent history of immigration that the U.S. has seen a steep decline in the demand for H-1B visa. Moreover, the USCIS has been reporting a decline in the count of actual H-1B Visa from previous weeks. As of July 23, 2010, the most current figures available, USCIS has received only 26,000 H-1B cap subject petitions, and only 11,300 advanced degree cap exemption petitions. This fall in the usage of H-1B visa has become a source of worry for people around the globe.

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While on one hand the fall in H-1B visa usage is cause of worry for many people, on the other hand the increasing scrutiny of H-1B petitions and visa applications is causing employers sleepless nights. The debate continues to rage on as to what or who is responsible for the worst economic situation in the U.S. in decades; and of course immigrants come to the forefront of the debate, whether or not they should. This could be the reason why a number of bills have been passed by Congress to restrict the H-1B visa category.

A.Increased scrutiny on H1B visa applications

It would not be a stretch to say that even more than the economy, the increased scrutiny on H-1B visa applications and H-1B petitions has been the reason for fall in the H-1B visa demand. For the first time ever, the number of H-1B petitions withdrawn by applicants or rejected by U.S. authorities exceeded the number of new H-1B petitions filed in 2009.

The USCIS says that some of the increased scrutiny on the H-1B visa is required because of the Troubled Asset Relief Program (TARP), which set new H-1B restrictions on firms that received bailout funds. The agency noted that in March, it cut back on the number of documents sought from companies.

While it appears that there is an increased scrutiny on H-1B visa applications, in a recent statement the U.S. Consulate at Hyderabad (India) denied that there was any overt curtailment of H-1B visas to Indian citizens, but did admit that the level of scrutiny has been scaled up due to the Obama administration’s policy to absorb native U.S. workers into the workforce.

The Hyderabad-based U.S. Consulate General, Cornelis M. Keur, said that due to the economic slowdown the world over, the U.S. government has made a policy decision to reduce its unemployment rate, which is currently approaching 10%. But he reiterated, there has been no significant change in visa policy. “We continue to issue H-1B visas with little more scrutiny,” Keur said. He said the U.S. government has framed a policy for employers and companies to give preference to native Americans in employment.

The primary tool used by immigration officers is what are known as a Request For Evidence, often abbreviated as RFE. Given the rash of RFEs being issued by the USCIS adjudicators on H-1B petitions, particularly for IT consultants, it is no surprise that H-1B employers are withdrawing petitions that are already pending. And with unemployment continuing at historically high levels, it is also not surprising that H-1B usage in general is down.

B.Consequences of restrictive over-scrutinizing of H1B petitions:

One of the consequences of, and perhaps the most troubling factor in, the declining number of H-1B petitions filed under the cap is the recent trend by large IT and consulting companies to shift more jobs to low-cost destinations, including India, China and Mexico. This development may be attributed, at least in part, to the USCIS’s restrictive over-scrutinizing of the limited temporary work visa programs like the H-1B. In simple terms, the U.S. government’s efforts to “protect U.S. jobs” has apparently backfired causing the systematic relocation of business from the United States to locations abroad.

The Hindu Business Line reported recently that Tata Consultancy Services (TCS), one of India’s largest IT consulting companies, did not file a single H-1B petition for the fiscal year starting October 1, 2009. TCS, which already has 18,000 employees with valid H-1B visas, has instead changed its strategy and chosen to relocate over 1,000 employees from the United States (and other locations) to India in the second quarter of 2009. They are making this move to increase offshore revenues. According to TCS, returning U.S. based employees to India is beneficial for TCS, its clients, and its employees. By shifting the work offshore, TCS claims that it is better suited to deliver a reduction in the customer’s overall costs while achieving higher profit margins for the company.

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The requests for more evidence being issued by the U.S. Citizenship and Immigration Services on H-1B visas in particular are “on the border of harassment,” said Crystal Williams, co-director of the American Immigration Lawyers Association. The agency is “attempting to build a barrier, to make it as difficult as it possibly can be to get a visa.”

The U.S. scientific, engineering, and technology industries cannot be expected to grow and innovate if the U.S. Congress continues to create legislative and administrative obstacles that discourage the hiring and retention of needed foreign professionals.

If there are too many H-1B workers in the U.S. (which we’re not convinced that there are) the USCIS should simply let the market system correct itself. Punishing U.S. employers by making them jump through additional hoops is not going to significantly affect the U.S. unemployment rate.

Contact VisaPro if you have questions regarding H-1B visas, or need help in filing with the USCIS. Our experienced attorneys will be happy to assist you.

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