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February 2000, Volume 7, Number 2

H1-B, H-1Cs

H-1B. The INS is expected to run out of H-1B visas for temporary foreign professionals by March 2000 even though the annual ceiling was raised from 65,000 to 115,000; the INS issued about 135,000 H-1B visas in FY99 because of a computer malfunction. The H-1B quota is scheduled to fall to 107,500 in FY2001 and 65,000 in FY2002.

There are several bills pending in Congress to raise the ceiling, or to exempt foreign professionals employed by educational institutions or earning over $60,000 a year from the ceiling. Legislation, sponsored by Senate Judiciary Chair Orrin Hatch is expected to be introduced perhaps as early as February. The new bill is a compromise between an ambitious H1-B visa measure introduced in 1999 by Gramm and a proposal by Hatch and Abraham that took a more conservative and short-term approach to the visa shortage problem.

US employers may petition and admit and hire H-1B foreign professionals in "specialty occupations," defined as those in which "attainment of a bachelor's or higher degree . . . is a minimum for entry into the occupation in the United States." Thus, the fact that a foreigner has a BA is not relevant unless the US employer normally requires a BA degree for newly hired workers. H-1B visas are considered desirable for foreign workers because they permit the foreigner to adjust status to US immigrants, that is, an H-1B visa can be issued to a foreigner who tells a US consular officer that he is an intending immigrant.

Entry procedures for foreign professionals were simplified in the 1990 IMMACT. In exchange for making it easier for employers to obtain H-1B workers—they file a labor condition application asserting that the job offered to an H-1B worker pays the prevailing wage and that the employment of H-1B workers will not adversely affect the working conditions of US workers--a cap was imposed on annual admissions. The issues before Congress are whether to raise this cap and whether to tighten requirements on employers.

A profile of TekEdge Corp., a Santa Clara-based "body shop" that sponsored 600 H-1B programmers in 1999, including 375 Indians, noted that TekEdge is the H-1B worker's employer, even though it has no work for the H-1Bs—it hires out the H-1Bs on its payroll to other companies for an hourly fee for periods that range from several months to several years. H-1Bs are paid $50,000 a year to start and those who leave TekEdge within a year must reimburse TekEdge for any relocation expenses they received.

Demographer Lindsay Lowell surveyed high-tech firms that hired H-1B workers and concluded in a paper, "Information Technology Companies and U.S. Immigration Policy: Hiring Foreign Workers," that employers set admissions processes in motion by their desire to hire the most qualified workers, regardless of nationality. In fact, employers report that they prefer to hire US workers because of the costs ($5,000 to $10,000) associated with hiring each H-1B foreign professional.

The employers told Lowell they wanted to hire workers with exactly the right skills because Information Technology changes too fast to train workers. Most IT companies said that they did not select foreign workers because of their work habits—willingness to live in small towns or to work long hours—although small companies that recruited via current employees (networks) sometimes mention such factors as a reason to hire H-1Bs.

Most of the jobs filled by H-1B workers are permanent, not temporary. Employers report that many H-1B workers leave when and if they are able to become legal immigrants. Despite frustrations with the current immigration system, IT employers who responded to Lowell's survey prefer reforming the current system to a new admissions system.

Employers said their top priority was to speed up the DOL process for certifying that a temporary H-1B worker was needed permanently to fill the job he/she was holding. It now takes 30 months to obtain this DOL labor certification— necessary so that the H-1B can adjust to immigrant status— and another 12-18 months for INS processing, or a total of three to five years to convert a temporary foreign worker into a legal immigrant. Some US employers promise to help newly hired H-1B workers to obtain immigrant status to attract them; lengthy DOL and INS procedures mean that the employer must begin filling out forms soon after the foreign workers arrive.

In December 1999, DOL was sued by several employers because of these delays in labor certification. The suit says that "The typical two- to four-year adjudicating uncontested 'Applications for Alien Labor Certification' unconscionably thwarts the Congressional mandate providing a visa category for skilled and professional immigrant workers to satisfy time-sensitive employer demands while filling shortage occupational areas."

IT companies hire foreign workers at several stages. Some hire foreign students who have completed a US education—they can obtain one-year of "practical training" on an F-visa, or be hired as H-1B workers. After employment as a nonimmigrant, the employer may sponsor him for immigrant status as an EB1, extraordinary ability; EB2, advanced degree; or EB3, skilled worker. Most high-tech companies that sponsor H-1Bs to be immigrants lose them to other US employers—only about 25 percent of the H-1Bs sponsored for immigrant status remain with the employer who sponsored them.

Employers responding to Lowell's survey had a median 3,500 employees; of whom 25 percent were sponsored foreign workers—CPS data suggest that 14-15 percent of IT workers are foreign-born. Foreign-born high-tech workers in IT industries tend to have more education than US-born IT workers. About 90 percent of the foreign-born IT workers in the US have a BA degree or more (45 percent have an MS), while one-third of the US-born workers in US IT industries do not have a BA degree.

Starting salaries for IT workers with BAs taking a first job fell 10 percent between 1989 and 1995, in 1998 dollars; starting salaries began to rise again in 1997. The starting salaries of college graduates going into IT peaked in 1986 at $39,005 (in 1998 dollars); fell to $36,321 in 1989; and then fell further to $33,434 in 1994. In 1997, IT salaries began rising again, and surpassed the 1986 level in 1998. One interpretation of these data is that US students rationally did not seek training for IT jobs because of falling wages. For more information: />
H-1C. Public Law 106-95 created a new H-1C temporary visa for foreign nurses. Hospitals that have filed attestations that they need such help can request a portion of the 500 H-1C visas a year available for foreign-born RNs. Community colleges in California, which supply 70 percent of California's nursing graduates each year, have reportedly lowered their standards to the point that many graduates fail the state licensing examination.

(Under Canada's foreign nurses programs, local nurses' unions must agree that the hospital needs foreign nurses before Human Resources Development Canada will issue the necessary certification. The HRDC always consults unions before permitting foreign workers to be hired in a unionized sector and nurses' unions are sometimes accused of slowing down certifications by refusing to sign documents required for the HRDC to process hospital requests. Unions sometimes insist on strict adherence to rules that require, for example, national advertising and the training of eight local nurses for each foreign specialist hired.)

Pamela Barnett, "Reworked Senate Visa Bill Would Allow More High Tech Workers, National Journal's CongressDaily, January 25, 2000. Sarah Lubman, "High tech's imported brainpower," San Jose Mercury News, January 16, 2000. Lowell, Lindsay. 1999. Information Technology Companies and U.S. Immigration Policy: Hiring Foreign Workers