H-1 Petition Filings Continue Despite Recession
Posted Feb 01, 2002

The Associated Press (AP) recently reported that the demand for H1B visas increased in fiscal year (FY) 2001 despite layoffs throughout the U.S. The number of H1B petitions increased by 14% in FY 2001, to 342,035. As many of our MurthyBulletin and MurthyDotCom readers are aware, the H1B is filed for a temporary worker in a specialized category, which is usually a professional position. The FY for the Immigration and Naturalization Service (INS) for FY 2001 would have started on October 1, 2000 and ended on September 30, 2001.

According to information recently issued by the U.S. Department of Labor (DOL), the majority of the Labor Condition Applications, which are required in order to obtain an H1B petition approval from INS, are for computer-related jobs. Other frequently requested occupations were accountants and auditors; electrical or electronic engineers; other architecture or engineering positions; college or university faculty; assorted types of managers; medical doctors; and economists.

The source of the increase is unclear. Some point to 80,000 new engineering and computer positions that were created in the technology industry. As we have often mentioned, the H1B visa enhances the ability of companies to locate qualified workers, particularly in fields that have recently suffered shortages like the computer and engineering fields. Critics of the H1B program claim that economics are the reason for the increase, citing studies that reportedly show lower wages for H1B workers than for U.S. citizens.

It should be noted that H1B employers are required to pay a wage that is at or above the "prevailing" wage for U.S. workers. Therefore, it is difficult to see how the H1B visa would be an avenue to inexpensive labor. Additionally, with only limited exceptions, employers are required to pay a $1,000 training fee to the Immigration and Naturalization Service with each application. Employers who are readily able to locate U.S. workers would not choose to pay such a premium to hire an H1B worker instead. This is particularly true, in light of the fact that there is no guarantee that the employee will remain with the employer for any length of time. In addition, should an employer want the INS to make a decision on an expedited basis, instead of taking the standard few months, the INS then requires an additional $1,000 in premium processing fees. In the end, no employer would make such expenditures unless there were no other viable options.

When an H1B worker is laid off any new employer desiring the worker's services must file a new H1B petition with INS. Many of the H1B workers have been hard hit by the layoffs in the U.S. These workers, generally need new petitions filed in order to lawfully remain and work in the U.S. The increased instability in employment sometimes causes an increased number of filings to be made on behalf of a particular individual. This repeated filing for the same individual could account for some of the current H1B filings. In addition, although the market is soft compared to the boom in the late 1990s, our reliance on technology and computers is expected to remain strong in the U.S.

As noted, with limited exceptions for certain research or teaching positions, most employers must pay $1,000 as a training fee with each new H1B petition. This fee was enacted as part of the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). The money is made available through grants intended to resolve the problems of U.S.-worker shortages in "high skill and high technology occupations." Essentially, employers who utilize the services of foreign workers must contribute to a fund designed to pay for U.S. workers to increase their skills through special programs. The Department of Labor Employment and Training Administration published a Notice on December 14, 2000 soliciting applications for grants of the moneys collected under the ACWIA fee. Approximately $20 million dollars is available at the present time. An additional $16 million is expected to be available for projects that meet certain different criteria. The information is available from the Department of Labor. Award notifications will be available at the same URL.

This substantial sum and the programs it supports should not be ignored in discussing the value of the H1B program to this country. We deem it in our best interest to allow U.S. employers to sponsor H1B temporary workers within their areas of expertise who fulfill a critical need and shortage. These workers have helped the U.S. to become a world leader in the technological revolution of the 1990s. They continue to play a key role in our economy, which depends increasingly on computer and other technological advancements.