H-1B lottery approaches, experts mull TARP effect

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.