H-1B demand may be slowing as feds increase scrutiny

A small decline from May in the number of H-1B petitions gives rise to theories on cause

For what may by the first time, the number of H-1B petitions withdrawn by applicants or rejected by U.S. authorities is exceeding the number of new petitions for the visas.

The numbers have resulted in a slight decrease over the past two months in the H-1B visa petition count on the scale of a rounding error. The drop may be little more than a short-term phenomenon, but it is inviting theories as to its cause, ranging from increased U.S. scrutiny of the H-1B petitions to the general economy.

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The United States has received approximately 44,900 visa petitions toward its 65,000 H-1B visa cap, one of two caps, since it began accepting petitions on April 1. But the number of visa petitions reported in mid-May by the U.S. Citizenship and Immigration Service (USCIS) was 45,500 visas. There has been a net decline of 600 visa petitions from May to June.

A USCIS spokesman, in an e-mail, said the reason for the decline is that the number of denials, withdrawals of applications, and revocations are "quite simply" exceeding the number of new filings. The United States has a second H-1B cap of 20,000 set aside for graduates from U.S. universities with advanced degrees. In raw numbers, that cap number has been reached.

In sum, the United States has received 65,000 H-1B petitions since April 1 for 85,000 available visas for the fiscal that begins Oct. 1. The combined cap may well be reached in the months ahead, but for now, demand has flatlined.

In the past year, the USCIS has increased the requirement for a wide range of documents to support visa applications to the point that the American Immigration Lawyers Association (AILA) says the requirement is "bordering on harassment."

The small H-1B decline reported by the USCIS may well be nothing more than a counting error, but Vic Goel, an immigration attorney in Reston Va., said it has more to do with cases being denied or withdrawn.

Goel said he has had clients withdraw pending H-1B cases because they couldn't get the large amount of material sought by authorities in time to meet government deadlines, or because the USCIS was seeking new documentation. In the larter instance, USCIS officials have asked IT consulting firms to obtain letters from clients with detailed descriptions of the duties performed by H-1B workers, their salaries, hours, benefits, and the length of the assignment, among other things, which has not been a normal business practice, he said.

"Not many companies are going to give such a letter to a vendor without serious reservations, which could jeopardize the business relationship," Goel said.

In large multiyear engagements, Goel said an IT consulting firm's employees will typically work in the client's offices, but the client does not oversee that person's work, benefits, and pay, which is why they may be unwilling to issue such a letter. The USCIS will often deny such cases "by concluding that the H-1B employer has not proven that a job actually exists or that it will really direct and control its own worker," he said. Denials have also been issued H-1B visa extensions on these grounds, he said.

The reason the USCIS is demanding more from clients may rest with a report last fall by USCIS investigators that looked at 246 visa cases and found that about 20 percent had evidence of fraud or technical violations.

Among the problems the USCIS reported were workers who weren't paid the prevailing wage or who were "benched" without pay when there was no work. That report was followed earlier this year by a U.S. Justice Department action that charged a number of companies with H-1B visa-related violations. Those violations included citing the prevailing wage of a lower-paying region but assigning the worker to perform the job in a higher wage region.

Robert Deasy, director, liaison and information for the AILA, said the economy has major role in the stalled demand for H-1Bs. "Ultimately, I think it's economy driven," he said. Deasy, however, said he's not ruling out a USCIS role in the visa decline through its aggressive actions and "extraordinarily rigorous" demands for documentation that are leading to visa denials and withdrawals.

This story, "H-1B demand may be slowing as feds increase scrutiny" was originally published by Computerworld.

Copyright © 2009 IDG Communications, Inc.