Do You Hire Foreign Nationals or Plan to? Then Here is What You Need to Know About H-1B Visas and the Challenges Ahead

We previously reported on the TriNet blog how employers of immigrant workers can prepare for DACA reform and a potential increase in I-9 investigations. There is, however, another issue impacting many employers: the H-1B program. H-1B visas are the primary way U.S. employers recruit and hire foreign national professionals and students. 

How the H-1B program works

H-1B visas allow workers in highly-skilled occupations to work in the U.S. for up to six years and can be sponsored by any company that is in the U.S. or by a multinational company that has operations in the U.S. The sponsor company must demonstrate that they are offering a competitive wage for the position and that hiring a foreign worker would not negatively impact the U.S. workforce.

Congress sets an annual cap on the number of H-1B visas it will allow, starting on April 1.  Currently, the cap is 65,000 plus an additional 20,000 for students who graduated with an advanced degree from a U.S. college or university. In fiscal year 2017, nearly 199,000 people applied for an H-1B visa.  It takes approximately 3-4 weeks to make all the preparations and pre-filings for an H-1B.  For most employers, the work begins on applications no later than March 1, as in most years the cap is reached in the first week of April.

Current challenges of H-1B visas

The current immigration climate in the U.S. is less welcoming to the potential foreign worker than it has been in the past. The “Buy American, Hire American” executive order signed by President Trump on  April 18, 2017 forecasted sweeping changes in the way foreign workers are issued visas. 

While the executive order lacked specifics, the overall tone of the order hints at reforms to ensure that visas are awarded to the most skilled or highest paid petition beneficiaries. This suggests a more deliberate assessment of applicants will replace the lottery system currently in use. Critics of the proposed change fear that the extra assessment will encourage discrimination between workers based on country of origin.

As a part of this shift, H-1B visa applicants are facing increasing challenges in the form of requests for evidence (RFEs). The U.S. Citizenship and Immigration Services (USCIS) sends applicants an RFE if it requires additional information to determine if that applicant is eligible for a benefit. RFEs issued in the first eight months of 2017 increased by 45% over the same period in 2016, while H-1B applications increased by just 3%, according to data from the USCIS. Not since 2009 has the USCIS issued REFs at such a rate.  

More changes coming to the H-1B program

The USCIS has proposed additional changes that would restrict the possibility for spouses of H-1B visa holders to apply for work permits. The proposed changes would also restructure the Optional Practical Training program (OPT), which currently allows foreign students to work in the U.S. for up to three years after graduating from a U.S. college or university. This would result in fewer graduates being sponsored for work visas.

With the new regulations and proposed modifications, the H-1B process has become increasingly difficult. Emily Neumann, an immigration lawyer in Houston, told Bloomberg Technology, “We’re entering a new era. There’s a lot more questions; it’s very burdensome.” 

In the coming months, a good immigration lawyer may be the next “must have” for the small business owner.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

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