Companies may look to move presence abroad amidst H-1B uncertainty

The Trump administration’s attempt to change the H-1B visa now includes two proposed rules around selection and eligibility. This could alter how companies use the visa to acquire foreign professionals to work in specialty fields, and even drive some employers to build an offshoring presence to keep their IT operations going.

The Department of Homeland Security (DHS) recently proposed a new rule to reform the H-1B program that revises eligibility for cap exemptions, scrutinizes employers that have violated the program’s requirements, and oversees third-party placements (meaning subcontracting). At the end of September, DHS began requesting comment for a proposed rule that would introduce a weighted selection process favoring “the allocation of H-1B visas to higher skilled and higher paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels.”

This follows the Trump administration’s announcement that employers will need to pay a flat fee of $100,000 for new H-1B petitions, which DHS clarified only applies to new applicants who are currently living abroad.

Taking advantage? The current overseers of the H-1B program are reacting to incidents where companies, specifically major contractors, are sending lower-paid IT workers on the H-1B to other companies, according to Cecilia Esterline, a senior immigration policy analyst at the Niskanen Center, a nonpartisan think tank.

In June, Bloomberg reported that one of these instances involved banking companies like Citi, which use Tata Consulting Services (a supplier of H-1B contractors) as a way to hire these specialty workers. The consulting company is currently under investigation by the Equal Employment Opportunity Commission (EEOC) for bias claims.

Esterline said that as H-1B was originally intended to be a temporary program for workers to come and go—and is now one of the only programs that allows someone to remain in the US while going through the green card—there are instances where bad actors have taken advantage of the program.

Third-party worksite cases should, in Esterline’s opinion, “undergo more scrutiny.”

“I think that it’s widely accepted that this is an area that is ripe for abuse, simply because of the number of actors that are involved,” Esterline said. “I think that it is a genuine concern, and it’s something that we need to really address, look into, and figure out how is it best that we ensure that…someone’s wages are being compared to other employees at the third party, at the contracting company, but also at the place where they are being placed.”

A lead data engineer at AT&T, Monika Malik said she can understand how the proposed adjustments to the H-1B program can be helpful in combating companies taking advantage of the program through duplicative submissions and filing multiple registrations for single workers.

Malik, who said she has a few team members working on H-1B who have studied in the US to receive degrees, and said via email that she believes the current lottery “doesn’t favor merit or US education, so even talented students who studied and trained in the US face the same odds as mass-filed petitions.”

Stricter rules and the $100,000 fee could drive companies to consider outsourcing, since “now working remotely is as easy,” Malik said. “We have the tools where we can work with people who are not in the same time zone.”

Under pressure. Esterline told IT Brew that the tech sector is facing a “cacophony of pressures” regarding the talent pipeline normally accessible via the H-1B.

She said tech firms trying to retain their workforce may reduce the number of visas they sponsor, or might even move jobs abroad. Specifically, Esterline said the US marketplace could see tech workers favor Canada (which seems to be a theory among some analysts, despite no major movement by companies in that direction).

“[The H-1B is] pushing our innovation forward, it’s helping us maintain our competitiveness,” Esterline said. “If those individuals are working elsewhere, another country is able to benefit from those same things that we have long benefited from.”