H-1B hiring too much of a hassle?

With more hoops to jump through, U.S. companies may reconsider bringing H-1B workers on board.

With more regulatory hoops to jump through, U.S. companies may reconsider bringing H1-B workers on board, lessening the appeal of U.S. education and employment for foreign nationals.

The U.S. H-1B visa program continues to cause controversy as new government restrictions make securing a foreign national for employment at an American company more difficult than ever.

Read our FAQ to find out how the H-1B visa program works and why it’s so controversial.

The H-1B Specialty Occupation Visa program, long the subject of debate among high-tech companies and U.S. lawmakers, allows American companies to hire foreign nationals with skills not easily found within the country. The program applies to industries other than IT, such as education, science and medicine, but public debates featuring Bill Gates tend to associate the program more with high-tech workers. The program is capped at 65,000 visas and 20,000 exemption filings for recipients of a graduate degree from a U.S. university, with an upcoming April 1 deadline for 2010 applicants.(Read a study about Microsoft being the biggest user of this program.)

But this year in the midst of the worst economic recession in decades and in response to President Barack Obama's stimulus plan, U.S. lawmakers are adding to what some say is already a substantial list of requirements for potential H-1B hires. For instance, a provision to the stimulus package would restrict H-1B hiring at companies that have received funds from the Trouble Assets Relief Program (TARP) and that have more than 15% of their workers on visas; these companies would be required to prove they have diligently recruited American workers for the position and that in hiring a foreign national they are not replacing a U.S. citizen. Yet for companies currently employing foreign nationals that aren't considered "H-1B-dependent" (those with more than 15% of their staff on visas), the process might not change much.

The current controversy is around U.S. high-tech companies that are laying off workers, but aren't necessarily cutting H-1B visa holders or foreign nationals ahead of U.S. employees, says Peter Roberts, partner at corporate immigration law firm McCarter & English. "Legally there is no requirement one way or the other if they hire U.S. or don't hire H-1B or terminate H-1Bs first. But some issues could arise with TARP funds and new hires; that is yet to be cleared up completely." (Read about Meg Whitman and John McCain proclaiming support for increasing H-1B Visas.)

While it is still being fleshed out in full, there is a provision that involves restricting employers from hiring an H-1B visa worker if the company has had layoffs 90 days either prior to or following the hire. That means many companies may reconsider looking at foreign nationals for U.S. positions, which has two potential negative implications, Roberts says. For one, foreign nationals might not continue to view American universities as an option if there is a lesser chance of them finding work after graduation. Secondly, business owners could be challenged to find and hire the skills they feel they need to stay competitive with many restrictions put upon their employment choices.

"This is a tough issue all around, and no one is happy about it. But if the U.S. starts taking away opportunities for foreign nationals, our public universities and school systems will feel that impact. Lawmakers need to be aware of that potential consequence," Roberts says.

As for business leaders hoping to match needed skills to potential candidates, Roberts says many will move the possibility of an H-1B hire off the top of their list. He says an informal poll by the American Immigration Lawyers Association (AILA) revealed that fewer clients of those legal members plan to seek new H-1B visas for the upcoming 2010 cap. (The AILA has not released the poll results publicly.)

"I don't see anyone going out of their way to pay more than $3,000 in filing fees and premium processing during this economy considering the added restrictions," Roberts says. "I am not talking about those that abuse the program, but the good companies that are trying to stay competitive or even stay in business will have one less option."

The negative attention given to the program could mean that next year's limit won't be reached in record time, as it has been in the past few years

"This could be a very different year for H-1B," Roberts adds. "The numbers seem to be way down, and some say it is possible we may not even hit the cap, but that is still unlikely."

A March 2009 report, "H1-B Visas by the Numbers," from the National Foundation for American Policy (NFAP) states that 2010 cap will be exhausted despite the down economy.

"Based on historical usage, the H-1B visa quota for skilled foreign-born professionals is likely to be exhausted during the new fiscal year or even before the start of the fiscal year," the report reads. "While the number of initial applications may diminish due to the economy, the demand built up by the inability of employers to hire skilled professionals on new H-1B visas for over the past year and the low quota for H-1Bs relative to the size of the U.S. labor force will contribute to employers likely reaching the annual cap."

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