Editors Note: John Lindsey is a member of the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A.It’s probably too late to apply for an H-1B visa in fiscal year 2005.
In early September, the U.S. Citizenship and Immigration Services (USCIS) announced that it had already received approximately 46,000 applications for H-1B visas for fiscal year 2005. This figure means that the 2005 cap on H-1B visas to be issued in fiscal year 2005 will probably be met from applications received by USCIS prior to the start of fiscal year 2005.
If your company was planning to hire a new foreign employee on an H-1B visa in fiscal year 2005 and has not yet filed the H-1B application, it will likely need to look to fiscal year 2006 to make the hire. USCIS is not expected to take applications for issuance of H-1B visas under the fiscal year 2006 cap before April of 2005.
The cap on H-1B visas for fiscal year 2004 was reached in February, six months into that fiscal year, and the cap for fiscal year 2005 will, obviously, be met faster than in 2004. If these trends continue, without an increase in the cap or elimination of the cap altogether, the H-1B visa will, for all practical purposes, not be available for employing foreign workers for the foreseeable future.
Background information on the H-1B and the caps
An H1-B visa is the form of nonimmigrant visa issued to individuals who have a college degree (or equivalent) and seek temporary employment in the U.S. in a specialty occupation or as a professional, such as computer analyst, engineer, scientist, or teacher. The H-1B visa program began in the early 1950s, and H-1B professionals now work in all sectors of the U.S. economy. Historically, workers on H-1B visas have been concentrated in information technology fields, primarily in computer related occupations. In the past year, however, more H-1B visas were approved for occupations in fields other than information technology, primarily in education and health care.
Congress has placed limitations (the “caps”) on the number of new H-1B visas that may be approved each fiscal year (October 1 to September 30 of each year). The current cap is 65,000 visas, down from 195,000 visas in fiscal year 2003. As a result of trade treaties, 6,800 H-1B visas are reserved for applicants from Chile and Singapore, reducing to 58,200 the number of H-1B visas available under the cap each year for persons from other countries.
Under existing law, companies have limited alternatives once the cap is reached.
When the 2005 H-1B cap is reached, companies that wish to hire new foreign workers in fiscal year 2005 will have limited options. Alternative visas, such as the TN (for professionals under the North American Free Trade Agreement), E (for executives, managers and employees under trade and investment treaties) and L (for intracompany transfers of executives, managers and employees) may be available under certain circumstances, but these visas come with restrictions on eligibility that limit their usefulness for many companies. Another option is to hire a foreign worker already working in the U.S. on a valid H-1B visa for another employer, since an application filed by the new employer for an H-1B visa for this employee will be exempt from the cap on new H-1B visas. Unless one of these alternatives is available, once the 2005 cap is reached, companies must postpone hiring new foreign workers on an H-1B visa until applications are being accepted for fiscal year 2006.
Debating cap increase
Reasons for the cap are not supportable by available evidence, so why not increase the cap or eliminate the cap altogether for H-1B visas?
In recent years, opponents of the H-1B program have been successful in getting Congress to impose caps on the number of visas available each year. A number of claims have been put forward to justify these caps. Among these claims are that H-1B professionals are flooding the U.S. market, that they are taking jobs from U.S. workers, that they are lowering the wages and working conditions of U.S. workers, that U.S. employers prefer H-1B professionals in the work place, and that H-1B professionals earn lower wages than U.S. workers. We have all seen or heard the stories of U.S. workers who claim they are training their foreign replacements.
The available evidence does not support these claims. H-1B professionals have always been a very small percentage of the U.S. workforce (less than one tenth of one percent in the highest year for such visas). The number of applications to employ H-1B professionals is driven by market demand, rising in times of increasing employment for all workers, and declining when market demand falls. It is more time consuming and expensive for employers to hire H-1B professionals than U.S. workers, meaning that foreign workers would be less likely to be hired if comparable U.S. workers were available. Further, the H-1B program includes safeguards to prevent lowering of wages and working conditions for U.S. workers. Employers must guarantee that U.S. workers will not be adversely affected by the hiring of an H-1B professional, and the wages to be received by an H-1B professional must be equal or above the higher of the actual wage paid to comparable U.S. workers or the prevailing wage in the area for the position to be held by the H-1B professional.
Statistical analysis of the available H-1B data also suggests that these claims have no statistically significant basis. A study of H-1B professionals in the information technology field done by the Federal Reserve Bank of Atlanta (published in its Economic Review for the third quarter of 2003) found no evidence to support the claim that an increase in the number of H-1B professionals will lower the wages of information technology workers. Many of the results of the Federal Reserve study actually show that H-1B professionals have had a positive, though insignificant, effect on wage growth for information technology workers.
The study found no adverse effect of hiring H-1B professionals on contemporaneous unemployment rates, although some of the study’s results suggested there may be an adverse, though insignificant, effect on unemployment rates in the following year. The Federal Reserve study concluded that its results, and those of similar studies, show that it is difficult to find any adverse effect of H-1B professionals on U.S. wages and unemployment. If the claims against the H-1B program were, as the opponents insist, true, it would seem more likely that the statistical studies would not have such trouble finding adverse effects.
It may be too late to file an application for an H-1B visa, but it is not too late to write your congressman.
If your company plans to employ H-1B professionals in the future, you need to take steps now to avoid losing this important means to employ foreign workers who can contribute to the growth of your company and the economy. Once the election is over, write your congressman and demand that the cap be removed, or if not removed, that it be raised at least to the 2003 level.
Daniels Daniels & Verdonik, P.A. has been serving the legal needs of entrepreneurial and high technology clients for more than 20 years. John Lindsey concentrates his practice in the areas of copyright, trademark, immigration, international trade and corporate law. Questions or Comments can be sent to email@example.com.