Another H-1B battle coming?

Backers of guest worker visas say more are needed, but critics oppose a higher cap and call for more worker safeguards.

Ed Frauenheim Former Staff Writer, News
Ed Frauenheim covers employment trends, specializing in outsourcing, training and pay issues.
Ed Frauenheim
6 min read
As the ink on a new law expanding the H-1B visa program begins to dry, another battle is already brewing about how many new foreign skilled workers, including computer professionals, should be allowed to work in the United States on the visas--and under what terms.

Critics of the H-1B program oppose raising the annual cap from its current level of 65,000. Last month, President Bush approved visa program changes, including an exemption to the cap for up to 20,000 foreigners earning graduate degrees at U.S. schools.

This new exemption comes on top of existing exemptions for institutions of higher education, nonprofit research organizations and governmental research organizations. For fiscal years 2000 to 2003, the number of new visas exempt from the annual cap averaged nearly 28,000. (Information about fiscal year 2004 was not yet available.)


What's new:
Just weeks after the H-1B visa program was expanded, a battle is brewing over how many new foreign skilled workers should be allowed to work in the United Sates on the visas--and under what terms.

Bottom line:
Backers of the guest worker visas say the annual cap of 65,000 is too low, having been reached the first day of this fiscal year. But critics oppose a higher cap as harmful to U.S. workers and call for more worker safeguards.

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Cap exemptions could translate into more than 40,000 additional foreign workers this year, said Vin O'Neill, legislative representative for the U.S. wing of the Institute of Electrical and Electronics Engineers professional group.

The cap is intended to provide a safeguard, but it's losing its meaning, O'Neill argues. "The greater the supply, the more leverage the employer has to drive down wages."

Critics also complain that the revamped visa program fails in other ways to adequately protect workers. But H-1B defenders point to new measures designed to benefit the American work force. Backers also say exceptions to the cap are needed and that if anything, the cap should be raised or eliminated. They note that this year's visa ceiling was reached on the very first day of the federal government's fiscal year, Oct. 1.

"We're still going to run into cap problems," said Harris Miller, president of the Information Technology Association of America trade group. "I've never believed the cap was necessary or appropriate."

A ticket to controversy
H-1B visas allow skilled foreign workers to come into the country for up to six years. Thirty-nine percent of visa petitions approved in 2003 were for workers in computer-related occupations, with nearly 37 percent of all approvals that year for workers born in India.

The annual cap, which primarily applies to applications for initial employment, has fluctuated over the years. Congress raised the cap from 65,000 to 115,000 in 2000. It then raised it to 195,000 for 2001 through 2003. When the cap fell back to 65,000 in 2004, employers hit the visa limit less than halfway through the fiscal year.

H-1B visas have long been a flashpoint of controversy in the tech industry. Critics have blasted the H-1B program as undermining U.S. workers, being ripe for abuse and fueling the shift of skilled work overseas. Industry leaders have said the visas serve instead as a brake on offshoring, defending them as a means to fill shortages and give U.S. companies access to international talent as they compete globally.

Recent changes to the H-1B program and to the also-controversial L-1 visa program were part of a catch-all bill signed into law by President Bush in December.

Bobby Chung, an immigration attorney based in Southern California, said it was quite possible that all 20,000 of the new visas for foreigners with graduate degrees from U.S. schools will be taken--and likely that the number of other exempt new visas will be similar to the 28,000

average of recent years. "I don't see that number changing all that much," he said.

Defending the exemptions
The new cap exclusion of up to 20,000 graduate degree holders is a smart move to keep smart talent on U.S. soil, ITAA's Miller argues.

"Granting this exemption puts America first by giving U.S. employers access to this talent and giving U.S. taxpayers a bigger return on the tax dollars they invest every year in U.S. institutions of higher learning," Miller said in a statement after Congress passed the omnibus bill. "Foreign students make up 50 percent or more of attendance in many advanced-math, science and engineering programs. Forcing foreign students to return home after earning their advanced degrees sends that public investment packing."

Immigration attorney Chung said the visa exception for universities is important as well. "If they didn't have these workers, it would hamper their ability to do research," he said.

In Chung's view, the current cap is too low, though he would not raise it all the way to the previous peak of 195,000. "If it's reached on the first day of the fiscal year, it's definitely not enough," he said.

IEEE-USA, however, argues that reaching the cap on Oct. 1 is a sign that employers have come to treat the visas as a standard business practice rather than a last resort. "Too many companies are going to H-1Bs first," said Russell Harrison, a legislative representative of IEEE-USA. "If they can't get a hold of an H-1B, then they'll go to an American worker."

A lower cap last year seems to have helped U.S. techies, according to IEEE-USA. The average number of unemployed workers in nine high-tech categories--including computer programmers, database administrators and computer hardware engineers--fell from 210,000 in 2003 to 146,000 in 2004, according to Labor Department data.

There are signs that the tech labor market is tightening as the economy improves, with at least one analyst predicting a shortage of technology professionals in the United States in the near future. Not all independent analysts share this view, however.

Devil in the details?
Controversy also continues to swirl around other aspects of the revised visa program. Visa advocates say there are a number of new H-1B rules that work in U.S. workers' favor. One is a new $500 fee earmarked for fraud prevention and detection. Another is an application fee of $1,500 for companies of more than 25 people, with funds used for education and training programs for U.S. workers.

One rule revision, though, is not as strong as it may have initially appeared.

Soon after Congress passed the measure in November, Sen. Saxby Chambliss, R-Ga., a major force behind the new rules, stated that under the legislation, "companies must attest that the H-1B worker will not displace a U.S. worker."

Although this statement suggests that all companies are bound by the rule, details of the law reveal that the requirement applies only to a subset of employers. Those affected are ones that hire a significant percentage of H-1B visas--so-called H-1B-dependent employers--as well as employers found to have committed a "willful failure or misrepresentation" in the previous five years. Regulations specific to these types of employers existed in the past but had expired in 2003.

Chambliss' office did not respond to requests for comment.

Norm Matloff, a computer science professor and longtime critic of the H-1B program, argued in a Web posting that reinstating the H-1B-dependent category "is of basically no consequence, as it applies to only 50 out of 50,000 H-1B employers."

At least one member of Congress is gearing up for another revision to the H-1B program. Rep. Bill Pascrell of New Jersey indicated in a letter this month that he plans to propose a bill that would force all employers applying for H-1B visas to search for qualified American workers first.

ITAA's Miller said his group would "strongly oppose" requirements that non H-1B-dependent employers have to attest that they will not displace a U.S. worker or that they have first sought to hire an American worker. Miller argued that the program's requirement that employers pay the prevailing wage is a strong safeguard for U.S. workers and that additional requirements would slow processing times.

Miller also said H-1B visas can be used to bring over foreign workers who can help a company sell a product in a foreign market--a situation where it would not make sense to recruit a U.S. worker.

In keeping with the heated tone that has long characterized debate over the visas, Pascrell said the H-1B stakes are high. "We, in the Congress, have a moral obligation to prevent our skilled work force from being dangerously eroded," Pascrell wrote. "If we do not act soon, we are in real danger of outsourcing the middle class of our country out of existence."