Tech Demands More H-1B Visas As Critics Cry Foul

Some Americans have been voluntarily giving the government a little extra help with the nation's debt problem. KAREN BLEIER / AFP - Getty Images file

Hundreds of thousands of applications for visas meant to bring specialty workers to the United States were filed in early April, but critics of the program say the current system is broken and may discourage companies from hiring American workers.

Each year, thousands of applications for coveted H-1B visas pour in from companies looking to employ foreign workers in highly specialized positions the firms say mostly cannot be filled by Americans. This year, about 172,500 applications were received, according to Citizenship and Immigration Services.

Eighty-five thousand of them were accepted, and while executives at the head of some of America’s biggest tech companies would like that number to rise, critics, researchers, politicians, federal investigators and CEOs alike have raised serious concerns about the use and abuse of the H-1B program –- including that it might be used to replace American workers with lower-wage employees from overseas.

While outsourcing has become an accepted form of doing business for American companies, H-1Bs have gained more political attention in recent years as tech-backed groups including Mark Zuckerberg’s have lobbied for changes to the H-1B cap as part of comprehensive immigration reform. Microsoft, Intel and Facebook were among the top five clients that filed lobbying reports regarding immigration in 2013, according to data from the Center for Responsive Politics.

This year, as in the past, the vast majority of the 65,000 regular H-1B visas doled out each year, plus 20,000 more visas for applicants with master’s degrees, likely won’t go to companies like Facebook or Google, according to data from the Department of Labor.

The top employer holders of H-1B visas in fiscal year 2014 were multinational information technology consulting and outsourcing firms, with Cognizant Technology, Wipro Limited, and Cisco Systems topping the list. And the gap between the one and two spots was massive, with Cognizant holding more than twice as many H-1Bs as Wipro.

Further down the list was Infosys Limited with about 3,400 visas. Infosys reached a record civil settlement with the government in October 2013 when it paid $34 million after “allegations of systemic visa fraud and abuse of immigration processes” involving H-1B and B-1 visas, according to the Justice Department.

Zuckerberg is not the only tech or business leader who wants to see the H-1B cap expanded or dismantled. Microsoft founder Bill Gates asked a Senate subcommittee for an unlimited number of H-1B visas in 2007. Former New York City Mayor Michael Bloomberg has also said he would do away with the cap.

In most cases, business leaders and politicians who want to raise or abolish a cap on H-1Bs say that American companies need easy access to these visas to attract the world’s greatest minds, and make up for a deficit of American talent in the STEM fields –- science, technology, engineering, and math. Business-backed organizations like Compete America and non-profits like the National Foundation for American Policy have claimed that every H-1B creates five American jobs.

“This year the U.S. economy is sending clear signs that not only are STEM jobs growing but the highly skilled shortages masked by the economic crisis are still there as well,” Compete America said in a statement after the 2015 cap was reached. “The U.S. needs to move on to the business of fixing its highly skilled immigration system before it loses more of the top foreign professional and job creators that make America’s fastest growing industries competitive.”

Facebook and Google might not be getting the lion’s share of the available H-1B visas, but that’s because under the current system those visas are going to large, and in some cases off-shore, consulting and IT firms, said Daniel Costa, director of immigration law and policy research at the Economic Policy Institute.

“I would see why they might be upset, because they’re not getting a lot of the visas,” Costa said. “A lot of the visas are going to these offshoring companies.”

Critics of the current H-1B program point to mostly stagnant wages and an unemployment rate for computer workers that has still not recovered to pre-recession levels as signs that there is an untapped market of American tech workers who could snatch up tech jobs.

In a 2013 report published by the EPI, University of California, Davis professor Norman Matloff concluded that the H-1B program needs to be more, not less, tightly regulated to truly attract the “best and the brightest.”

Under the current system, “the former foreign students have talent lesser than, or equal to, their American peers,” Matloff wrote, adding that “skilled-foreign-worker programs are causing an internal brain drain in the United States” –- effectively driving American students away from these fields because they assume the jobs will go to foreign workers.

Advocates for more H-1B visas disagree.

“Study after study shows this isn’t the case -– and reams of economic data demonstrate that highly-skilled immigrants create American jobs,” Kate Hansen, a spokesperson for, said in an email. “In fact, every foreign-born student who graduates from a U.S. university with an advanced degree in STEM creates an average of 2.62 jobs for American workers.”

“We need to fix our broken immigration system and ensure that our country continues to be a magnet for the best and the brightest, including those who would be eligible to contribute on H-1B visas,” Hansen said.

A report from the White House’s Council of Advisors on Science and Technology found that “fewer than 40 percent of students who enter college intending to major in a STEM field complete a STEM degree.”

The idea that an advanced, and often pricey, education is a prerequisite for these jobs is also flawed, according to some researchers. In a 2012 report, the EPI’s Costa wrote that data show nearly half of all web developers do not hold a four-year college degree. Neither do 41 percent of computer systems analysts (who made up 26 percent of H-1B holders in FY2014), according to the report.

H-1B visa holders are supposed to be paid a fair market wage, referred to as a “prevailing wage,” but that does not always happen or some companies find loopholes, said San Francisco attorney Daniel Hutchinson. In immigrant employment cases he’s worked on, he’s seen companies sidestep the rules with visa-holders they sent to the U.S.

“We’re seeing companies that say that they’re paying someone $50,000 or whatever, but they’re actually making the employees pay for themselves to come to the U.S., travel expenses, living expenses,” Hutchinson said.

IBM settled allegations with the DOJ last year that the company had posted jobs with a preference for H-1B and F-1 visa holders, agreeing to pay the government $44,000 in civil penalties.

“The idea behind the H-1B visa is you’re supposed to protect American workers by setting a prevailing wage and not letting it be undercut,” Hutchinson said. “But what I’m seeing is the prevailing wage is undercut.”