H-1B lottery approaches, experts mull TARP effect

Legal experts, IT professionals weigh in on the current state of the U.S. H-1B visa program.

Economic conditions could lessen demand for H-1B visas as U.S. government officials work to limit abuse of the program.

Legal experts anticipate fewer applicants in the lottery for available H-1B visas next week as economic conditions and updated requirements will likely lessen the immediate demand for hiring foreign nationals under the controversial U.S. immigration program

The pool of 65,000 H-1B visas for 2010 could take longer to deplete this year, industry watchers say, unlike previous years in which the number of petitions filed exceeded the lottery cap set by the U.S. Citizen and Immigration Service in record time. Another 20,000 visas are made available to applicants via an exemption for recipients of a graduate degree from a U.S. university.

According to the American Immigration Lawyers Association (AILA), more than 70% of 72 respondents to a survey of their members said their client companies expect to file fewer petitions this year.

"The survey shows that fewer companies are going to file H-1B petitions for a number of reasons, but the main reason is the current economy," says Eleanor Pelta, AILA official and Morgan, Lewis & Bockius immigration partner in Washington D.C. "That means the chances for many companies to get an H-1B are better. In the past, the demand was more than double the available visas so hiring a foreign national was really a crapshoot for most companies." 

Economic conditions such as hiring freezes and headcount reductions are more likely to blame for fewer petitions than the updated restrictions associated with companies receiving government funding, Pelta explains. 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.

"Overall, TARP provisions aren't going to impact that many filings," she says. "But it is portentous in regards to the shape of things to come. Congress and lawmakers will put restrictions on H-1B going forward because in a time of a shrinking economy, many think American jobs are for American workers."

The decrease in demand could help U.S. companies looking to hire a foreign national. But Pelta notes that some companies are opting instead to send foreign nationals to work at locations in Canada or the U.K. fearing the U.S. immigration laws won't allow them to bring the talent they need in-house.

"It makes a difference to the U.S. economy when Microsoft puts an R&D center in Canada because the company believes it can't get the visas it needs to keep that part of its business in the U.S.," Pelta says.

But many American IT professionals view the situation differently. In response to a recent Network World article, readers commented online regarding the added restrictions and general practice of American companies using the H-1B program to bring foreign nationals into the U.S. workforce.

"Unfortunately our government has become way too bureaucratic with corporations running the show. While I'm all for globalization, there has to be [monitoring] and control in place when it comes to H1B visas," one person commented online. "The focus needs to be bringing Americans back into the workforce, not driving out all because shareholders want more than marginal returns on their investments. It's a complex situation but it can be somewhat solved as long as greed is pushed to the side."

Others insist U.S. companies aren't truly considering American workers when looking to fill open positions.

"U.S. companies have been bringing in H-1B workers because they claim there is no talent here. Also these same companies get tax breaks and make money off the H-1B workers," another comment reads. "There is a lot of great talent and skills here in the U.S. We need to start using it. Give your fellow American a chance for success."

Considering the current economic state of the U.S. and the rising number of unemployed Americans, others feel companies should first consider U.S. citizens for job openings.

"Being a laid-off IT worker with vast experience, I am appalled that the government would even think about issuing any of these visas when there are so many workers like myself who can not find employment," one reader commented online.

And still others see the program as part of the competitive nature of America's job market.

"There are two sides of the coin, but both ways hiring an H-1B professional benefits the company (low wage and better skills). I have seen many Americans doing a great job in engineering in my company, as much or better than any H-1B professional. The economy is more service-based today rather than manufacture-based," one person said. "You learn the tool, meet the requirements and apply for the job. If you are a better candidate than the H-1B professional, sure you will get the job. Why would the company pay $3,000 more to process H-1B and take on all the other hassles if they can get away by hiring an American? If there are low wages involved, you also have to compete and agree to provide the same sort of productivity and get the work done. That's how it works. Can you do that? If yes, go for it. Don't forget this country is driven by capitalism."

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