The Trump administration was hostile to high-skilled immigration, but the Biden administration may enact the most enduring policy changes to H-1B visas. And the changes might not be positive for employers. A series of decisions loom on regulations that would affect who can receive H-1B petitions, how much employers must pay H-1B professionals and much more.
The number of H-1B visas is small for a country the size of the United States. The 85,000 annual H-1B limit—the 65,000 regular cap and the 20,000-exemption for H-1B visa holders with a master’s degree or higher from a U.S. university—comes to 0.05% of the U.S. labor force. Companies are allowed to file for only 85,000 new H-1B petitions in a year, and about two-thirds, or 56,000 a year, are in computer occupations.
Today, there are well over 1 million active job vacancy postings in computer occupations, according to a National Foundation for American Policy (NFAP) analysis of Emsi Job Posting Analytics. “There is not a fixed number of jobs, and people with high skills often create more jobs for people with complementary skills,” notes the NFAP analysis. “Still, even if one adopts a zero-sum approach, there are nearly 20 times more job vacancy postings in computer occupations than new H-1B petitions typically used by companies in computer occupations each year. There are also likely many more openings than publicly posted positions.”
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With regional Covid-19 bans still in place and many U.S. consulates either not operating or working in a limited capacity, visa backlogs, including for H-1B and L-1 visa, will continue to mount until the State Department commits to new policies. Jeffrey Gorsky, former Chief of the Legal Advisory Opinion section of the Visa Office in the U.S. Department of State, believes the State Department could become more creative with biometric intake, give visa processing a higher priority and conduct more interviews via video. He believes interviews via Zoom would meet the statutory definition of in-person interviews.
Still, the H-1B annual limit is low. Employers filed 308,000 H-1B registrations for cap selection for FY 2022, according to USCIS. That means over 72% of H-1B registrations for high-skilled foreign nationals were rejected even before an adjudicator evaluated the application.
The economic literature shows loosening restrictions on H-1B visas would benefit the U.S economy and American workers. A study by economists Giovanni Peri, Kevin Shih, Chad Sparber and Angie Marek Zeitlin found, “The number of jobs for U.S.-born workers in computer-related industries would have grown at least 55% faster between 2005-2006 and 2009-2010, if not for the denial of so many applications in the recent H-1B visa lotteries.”
Britta Glennon, an assistant professor at the Wharton School of Business at the University of Pennsylvania, found in her research that H-1B restrictions push technology-related jobs out of the United States: “[A]ny policies that are motivated by concerns about the loss of native jobs should consider that policies aimed at reducing immigration have the unintended consequence of encouraging firms to offshore jobs abroad.”
Some policymakers argue America needs even more restrictive laws and rules to block the hiring of foreign-born scientists and engineers. As discussed below, the Biden administration will soon decide on a series of restrictions that could produce significant changes in H-1B visa policy.
Rule Would Make it Less Likely International Students Will Get H-1B Petitions: Before Donald Trump left office, his administration finalized a regulation that would end the H-1B lottery and replace it with a system that awards H-1B petitions by highest to lowest salary level. Many attorneys consider the regulation to be unlawful, and there are pending lawsuits against the rule. Instead of taking steps to rescind the rule, the Biden administration only delayed the regulation until next year’s H-1B cap selection.
In addition to questions of legality, the rule finalized by the Trump administration would fulfill a long-standing goal of Trump White House adviser Stephen Miller and his allies to make it more difficult for international students to obtain an H-1B petition, which would discourage many students from coming to America in the first place.
International students are disadvantaged under the rule because choosing H-1B petitions by salary level favors individuals with the most experience in the labor market over those with the least experience. “The National Foundation for American Policy found that an international student may be 54% more likely to get an H-1B petition under the current H-1B lottery system than under the Trump administration’s regulation that would end the H-1B lottery,” according to an NFAP analysis of actual cases of recent international students and filings for H-1B petitions. “The data demonstrate the new regulation would have a significant negative effect on the ability of international students to gain an H-1B petition.”
“The law firm Curran, Berger & Kludt provided NFAP with 170 cases of F-1 students with applications for H-1B cap selection for FY 2018, FY 2019, FY 2020 and FY 2021,” according to NFAP. “Under the current system that randomly selects H-1B petitions, 60% of the F-1 students were chosen through the H-1B lottery. However, the law firm provided information on the pay levels (Level 1 through 4) for the students’ H-1B applications, and NFAP found if the new regulation had been in effect, only 39% of the students’ H-1B petitions would have been selected.” Education organizations had warned the Trump administration’s rule would harm international students and make studying in America less attractive.
Rule to Force Employers to Pay H-1B Visa Holders and Employment-Based Green Card Applicants Well Above Market Wages: Under a Department of Labor (DOL) rule, published in the final days of the Trump administration, “employers must pay 23% to 41% higher salaries than under the current system across a range of occupations if they want to employ high-skilled foreign nationals in America,” according to a National Foundation for American Policy (NFAP) analysis.
The rule would apply to H-1B visa holders and employment-based immigrants and could have a devastating impact on both. H-1B visa holders waiting in the green cards backlog might be forced to leave the country if an employer could not extend their H-1B status at the new, much higher required salary level.
There is no evidence H-1B visa holders and employment-based immigrants as a group are underpaid relative to native-born professionals. Numerous economic studies have found high-skilled foreign nationals, on balance, earn more than their native-born counterparts. For example, Andrew Chamberlain, the chief economist at Glassdoor, found, “Across the 10 cities and roughly 100 jobs we examined, salaries for foreign H-1B workers are about 2.8% higher than comparable U.S. salaries on Glassdoor.” A recent study by Utah State University economist Omid Bagheri finds a larger wage premium for high-skilled foreign nationals.
Three courts blocked the rule when it was published as “interim final” in October 2020. On January 14, 2021, the Trump administration published a final rule that was only slightly modified from the original and carried the same aim—to price H-1B visa holders and employment-based immigrants out of the U.S. labor market. “The revisions to the rule don’t change the fact that it still fails to do what the law requires—to reflect the actual, prevailing wage for workers in that geographical area doing similar work,” said Kevin Miner, a partner at Fragomen.
The U.S. Chamber of Commerce and allied business groups and education organizations filed an amended complaint that argues the regulation to end the H-1B lottery is unlawful and continued its lawsuit to end the Department of Labor wage regulation.
New Regulation on Work at Third-Party Sites: “USCIS is still aiming to have a regulation in place by FY23 cap season to restrict use of the H-1B category by outsourcing companies by changing the ‘employer-employee relationship’ definition,” according to Berry Appleman & Leiden. Peter Bendor-Samuel, founder and CEO of Everest Group, argues access to talent is key for competitiveness as information technology services companies attempt to build digital platforms for U.S. companies. “Almost every major U.S. firm is building some form of digital platform so it can enhance its competitive position both domestically and internationally,” he said. “This is probably the most important thing these firms are doing and success will define both company and global success as we move into the future.”
The mistaken premise of nearly all restrictions on high-skilled immigration is that foreign-born scientists and engineers offer no value to America or U.S. companies except for a willingness to work for less money. Some policymakers believe that people born in other countries possess inferior abilities to people born in the United States—hence the belief companies must pay them lower salaries—and incorrectly assume that only a fixed number of jobs exist in the U.S. economy. The Biden administration has an opportunity to adopt a more forward-looking policy.