Need for skilled foreign labor far outpacing program's ability to provide workers
Recent headlines surrounding skilled foreign labor and big tech layoffs paint a picture of undercut American workers being replaced with foreign nationals.
But the problem isn’t too many skilled foreign workers, says Jennifer Behm, a lawyer at Berardi Immigration Law in Buffalo — it’s that there aren’t enough.
Behm specializes in helping individuals and employers apply for H-1B visas. HRD spoke with her to find out how HR departments can best navigate the process.
Tech industry takes advantage of visa program
The H-1B program allows employers to sponsor and apply on behalf of foreign “workers in a specialty occupation”. The tech industry is a major user of the program, which provides a stream of skilled IT staff, many with degrees earned at American universities.
The catch is the visa term is only three years, with a cap of six (unless the individual is waiting for green card approval, in which case the cap is waived), and the government limits annual H-1B first-time permits to 85,000 — a number far outpaced by growing demand, resulting in a lottery system for selection.
There were over 750,000 eligible applications to the program for the 2024 fiscal year — 61% higher than 2023, partly due to high numbers of multiple registrants for single beneficiaries, a sign of companies trying to game the system.
“The fact that following all those tech layoffs, you still have that many applicants vying for one of the first-time H-1B visa numbers speaks volumes about the U.S. economy and our labor needs,” Behm said.
Costly process for H-1Bs
The process for hiring H-1B workers is costly and slow; a potential employer could pay upwards of $30,000 for various government, legal and relocation fees.
The first step is filing an LCA (Labor Condition Application) to the Department of Labor (DOL), outlining proposed H-1B positions and wages. This information is also posted internally for current employees to view and respond to.
Wages are based on a four-level regulated scale, determined by the “prevailing” wage of the position in a given geographic location, with low- to high-end wages based on an applicant’s education and experience.
As this step of the process is self-determined and not closely enforced, there is an opportunity for loopholes that can be tempting to take advantage of. Some companies do, drawing accusations of U.S. employees having their wages undercut by lower-paid foreign nationals.
However, Behm says the practice is not commonplace, as the process is too costly for most employers to risk the consequences. She strongly advises specialized legal counsel, not only for applications but for the duration of the permit.
“It’s not worth trying to cut corners. Be prepared to pay [these workers] a competitive wage that they would otherwise pay an American worker, and they should also have a backup plan. It’s not a realistic way to get a candidate in the door.”
Accusations of ‘loud firing’ by tech giants
Use of the H-1B program has been common practice for decades, with documented positive impacts on America’s innovation and startup economies. However, the program has drawn fire in the media recently as tech giants like Google, Meta and Amazon (three of the country’s top H-1B users) publicly lay off large swaths of their workforce, a practice dubbed “loud firing”.
But the “politicized” reporting of the moves paints an inaccurate picture of the real issue, says Behm. In the larger context of the American labor market, it’s a much more complex matter.
“As a lawyer, I’m looking at the law; there is no real law that prevents them from doing that,” said Behm. “The government needs to change these things, close the loopholes.”
Bringing on H-1B workers is still one of the few ways for many companies to compete, and although the optics may not be good, even corporations doing mass layoffs are usually playing within the rules.
Need for ‘meaningful reform’ of H-1B visas
Behm says it’s the rulebook that needs to be changed.
“If we want to point fingers, we should be pointing at Congress, that neither side can get its act together to make some meaningful reform, and it’s super frustrating for employers, H-1B workers, and your average American who might look at this and go, ‘Oh, they’re undercutting.’
“It’s not that simple of an issue.”
In a 28 April 2023 statement on its website, U.S. Citizenship and Immigration (USCIS) acknowledged flaws in the program:
“Based on evidence from the FY 2023 and FY 2024 H-1B cap seasons, USCIS has already undertaken extensive fraud investigations, denied and revoked petitions accordingly, and is in the process of initiating law enforcement referrals for criminal prosecution. The H-1B program is an essential part of our nation’s immigration system and our economy, and USCIS is committed to implementing the law and helping meet the ever-changing needs of the U.S. labor market.”
