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The H-1B Visa Blog by Siliato and Malyk

H-1B Visa Usage On The Decline: Is It The Economy Or Increased USCIS Scrutiny Or Something More?

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For the first time in recent memory, USCIS has been reporting an actual decline in the H-1B count from previous weeks. For example, as of July 10, 2009, USCIS reported a total count of 44,900 against the 65,000 cap limit, 900 less than the cap count of 45,800 at the end of May. At first blush, this may be seen as nothing more than a computational error on the part of USICS.  But this is not the case. According to USCIS, the number of withdrawals of H-1B petitions, combined with denials and revocations, has actually exceeded the number of new H-1B filings in recent weeks.  Is this development just a function of the economy or is it more on account of the recent "Just say NO" climate becoming more and more pervasive with USCIS Service Centers, ostensibly to protect U.S. workers? Perhaps it is a little of both--in addition to something else which is just as troubling.

Given the rash of RFEs being issued by the USCIS adjudicators regarding H-1Bs for IT consultants (see our last H-1B Visa Blog post immediately below), it comes as no surprise that H-1B employers are withdrawing petitions already pending.  And with unemployment across the country fast approaching double digits, it is also not surprising that H-1B usage in general is down.  But what is perhaps the most troubling factor in the declining number of H-1B petitions filed under the cap is the recent trend of large IT companies shifting more jobs to low-cost destinations such as India, China and Mexico, a factor which may be attributed at least in part to the Service's over-scrutinizing of the limited temporary work visa programs like the H-1B.  In other words, the U.S. government's efforts to "protect U.S. jobs" apparently has backfired by the systematic relocation of business from the United States to locations abroad.

As reported in a recent article in Hindu Business Line, Tata Consultancy Services (TCS) did not file a single H-1B petition for the current USCIS fiscal year starting October 1, 2009.  TCS, which already has around 18,000 employees with valid H1B visas, has instead chosen to relocate over 1,000 employees from the United States (and other locations) to India last quarter to increase offshore revenues. According to TCS, returning U.S. based employees to India is beneficial for TCS, its clients and its employees. By shifting the work offshore, TCS claims that it is better suited to deliver a reduction in the customer's overall costs while achieving higher profit margins for the company. 

As a result of the H-1B "crackdown", a recent Computer World article predicts that more and more Indian IT firms will look to alternate locations to the United States, including Mexico, which are more immigration friendly and less costly.

Hence the query: Is this downward trend of H-1B usage an aberration or will we see this trend continue?  Most assuredly, a confluence of factors have contributed to the recent trend--a struggling economy, compounded by the current naysayer attitude of USCIS and the fact that the United States is becoming less and less attractive to an immigrant workforce that has historically helped to stimulate our economy.  While there is little doubt that we can expect some increase in H-1B usage as our economy recovers, there is no doubt that the United States has lost some of its glitter to the best and brightest of the world.  Now prospects are becoming dimmer for highly skilled professional immigrants under the H-1B program.

Regardless of the empirical data upon which one relies, it is undisputed that the shifting of nonimmigrant personnel offshore is a damaging blow to our overall economic recovery and to the United States' dominance in the areas of medicine, science, engineering and technology.  One such set of data is set forth in a recent position paper published by the Harvard Business School which finds that invention increases with higher H-1B admission levels. In finding that the H-1B visa program for temporary workers has played an important role in U.S. innovation patterns and technological commercialization over the last 15 years, the authors conclude that the H-1B program is a matter of significant policy importance and that  "total invention increases with higher admission levels primarily through the direct contributions of immigrant inventors".  It naturally follows that, as invention and innovation are on the rise, so are employment opportunities for U.S. workers.  This begs the question that if we cede to certain isolationist sentiments and ideas in the name of "protecting U.S. workers," are we simply cutting off our nose to spite our face?

The U.S. scientific, engineering, and technology industries cannot expect to maintain their present position of international leadership if we continue to create legislative and administrative obstacles that discourage the hiring and retention of highly educated foreign talent. We also cannot hope to grow our economy and create more jobs if we are ceding leadership in innovation to other nations.  Indeed, Google, one of the most innovative companies in the world, has said that it could not develop its innovations in the United States without the assistance of the H-1B workers program. In a hearing last year before the House Judiciary Immigration Subcommittee Laszlo Block, Vice President for People Operations at Google, testified, "If U.S. employers are unable to hire those who are graduating from our universities, foreign competitors will."

Comprehensive immigration reform is clearly necessary with a realization by Congress that current restrictions on high skill immigration are counterproductive.  Otherwise, not only will some of the best graduates of our universities, and highly qualified scientists and researchers of the world, have no choice to live and work elsewhere, but more and more U.S. companies may follow the lead of IT consulting companies and vacate the United States to set up facilities offshore--all of which, of course, does not bode well for the health of our national economy.

For additional information and frequent updates on a variety of employment-based immigration law issues, please click here to navigate to Meyner and Landis LLP's Corporate Immigration Law News Blog.

Post Authored By: Anthony F. Siliato, Esq. and Scott R. Malyk, Esq. of Meyner and Landis LLP


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