Behind the Push to Reform U.S. Work Visa Programs: QuickTake Q&A

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U.S. Toughens H-1B Applications

U.S. President Donald Trump and members of Congress from both parties have vowed to overhaul the visa programs used by corporations to bring overseas workers to the U.S. That’s left companies that rely on such workers and those that source them bracing for change. A first step came at the end of March, when the U.S. Citizenship and Immigration Services department issued guidelines making it harder for companies to bring foreign technology workers to the U.S. using the H-1B visa program. Next up, Trump will order a broader review of that program.

1. What’s the H-1B program do?

It allows companies to recruit 85,000 employees from abroad each year for specialty positions in fields including technology, science, medicine, architecture -- even fashion modeling. It took less than a week for applicants to exhaust that allotment in 2016, and technology companies including Facebook Inc., Google Inc., Intel Corp. and Cisco Systems Inc. have sought to increase the number available. People from India receive more H-1Bs than any other nationality.

2. What changes were made?

For H-1B visas given out in the 2017 lottery beginning April 3, the government now requires additional information for entry-level computer programmers, to prove the jobs are complicated and require advanced knowledge and experience. Computer programmers made up about 12 percent of all H-1B applications certified by the Department of Labor in 2015. In March, the immigration department suspended a program that expedited visa processing for certain skilled workers who paid extra, which some analysts saw as a first step to dismantling the H-1B program altogether. According to an administration official, Tata Consultancy Services, Cognizant Technology Solutions Corp. and Mphasis Corp. are examples of outsourcing companies that would likely have fewer visas approved as the administration’s changes are adopted.

Efforts to overhaul U.S. visa programs could have huge implications for Silicon Valley.

Source: Bloomberg

3. Which other programs are under scrutiny?

Apart from the best-known H-1B, companies use a variety of visas to bring in workers from abroad, including the B-1 for temporary business visitors and the L-1 for managers, executives and specialized workers of international companies.

4. Why does the U.S. have these programs?

They were designed to allow U.S. companies to hire temporary workers from other countries when they couldn’t find qualified people domestically. These temporary visas were established under the Immigration and Nationality Act of 1952. The programs have morphed over the years, and many of the visas now go to companies that pay foreign workers less than their American counterparts would receive. The total number of visas issued for temporary employment-based admission to the U.S. grew to more than 1 million in 2014 from just over 400,000 in 1994, according to the Congressional Research Service. Those numbers included some unskilled and low-skilled workers, plus accompanying family members.

5. Do the programs need reform?

It’s pretty clear the H-1B program and others have been used in ways that contradict their original intent. There have been allegations of abuse and at least one big settlement: In 2013, a Bangalore-based outsourcing company, Infosys Ltd., agreed to pay a record fine of $34 million to settle U.S. allegations that it sent employees to the U.S. with B-1 visitor visas to sidestep the caps on H-1Bs.

6. What does Trump propose?

During his presidential campaign, he said the H-1B program is a “cheap labor program” that takes jobs from Americans. He hasn’t yet detailed his ideas as president, but based on a draft executive order, his administration may push companies to try hiring American workers before turning to foreign ones -- a step that isn’t necessary now. He’s also asked that the programs prioritize giving visas to the most highly paid workers from abroad. 

7. Who gets priority now?

Currently, H-1B visas are allocated by random lottery, with no priority given to companies that pay workers more. The biggest recipients of the visas are outsourcing companies, including India’s Tata, Wipro Ltd. and Infosys. They pay workers in the program an average of about $65,000 a year, while Apple Inc., Google and Microsoft Corp. pay their H-1B employees more than $100,000.

8. Can Trump act on his own?

An executive order can begin the reform process, but Trump lacks the broad powers of Congress. For example, he can’t change the number of H-1B visas that are given out each year, but he probably can change the way they’re allocated. So he could order that priority be given to higher-paid workers.

9. What might Congress do?

Congress has tried many times in the past decade to change the work visa programs, with limited effect. Bills offered in the House by two California lawmakers, Republican Darrell Issa and Democrat Zoe Lofgren, aim to do so by raising the wages for some H-1B workers. In Lofgren’s proposal, companies that are the heaviest users of the program would have to pay salaries of at least $130,000, up from the current $60,000, or attest that they are not displacing American workers and making a good faith effort to recruit U.S. workers if they pay less than that. The legislative push has spooked India’s tech companies, weighing on their stocks. There’s also a bipartisan proposal in the Senate, long pushed by Republican Chuck Grassley and Democrat Richard Durbin, that would forbid replacing U.S. workers with H-1B hires and prioritize visa applications from people who earned degrees at American colleges.

10. Will Silicon Valley be hurt by the changes?

It depends on the details, of course, but the U.S tech industry may well come out on top. Because so many H-1B visas go to outsourcing firms, American employers like Apple, Google, Microsoft Corp. and Facebook haven’t been able to get as many as they would like. They could be benefit if outsourcers face more restrictions.

The Reference Shelf

  • India’s tech titans plan to make their case personally to Trump.
  • India’s loss could be Canada’s gain.
  • How high-skilled immigrants may hurt U.S. workers but help U.S. consumers.
  • Biotech executives warn a crackdown on H-1B visas could fuel a “crisis of science.”
  • A QuickTake explainer on U.S. policy on skilled immigrants.
  • The 2016 Congressional Research Service study of the visa programs.
  • Office of Foreign Labor Certification breakdown of H-1B visas workers by positions, employers and states.
  • Bloomberg News profiled America’s H-1B workers in four charts.


— With assistance by Jing Cao, and Joshua Brustein

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