IT Staffing Report: June 11, 2015

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The H-1B lottery: Who is gaming the system?

When we discussed the (then forthcoming) H-1B filing period for the Federal fiscal year (FY) 2016 in our February issue, we joined the chorus of voices predicting another year-over-year jump in petition filings. Consensus turned out to be correct, as the number of petitions received this year increased by about 35% from FY2015, which in turn was up 39% from the prior year, as seen in the graph below.

To review, the H-1B visa program allows foreign nationals who possess highly specialized knowledge or training, typically in science or technology, to legally work in the US for an initial period of up to three years. The total number of new H-1Bs issued each year is limited to 85,000, of which 20,000 are reserved for advanced degree holders. When the volume of petitions exceeds that cap after the minimum five-day filing window, visas are allocated by a computerized random lottery.

As we also mentioned back in February, one factor fueling the rapid increase is the employer strategy of filing more petitions than the number of workers required under the expectation that most petitions will be unsuccessful. An article published last week in the Wall Street Journal (subscription required) sheds some additional light on this practice. Regulations permit affiliated organizations, such as multiple divisions of the same company, to file H-1B petitions for the same individual provided each can demonstrate a legitimate business need. The article quoted one immigration attorney, who mentioned having filed petitions on behalf of four subsidiaries of one corporation for the same worker, as calling the technique a “best practice.” Another attorney interviewed said, conversely, “it’s not completely ethical and above board.”

Meanwhile, foreign citizens seeking a visa are free to pursue multiple offers from H-1B sponsoring companies, each of which may file a petition on the worker’s behalf unbeknownst to the others. If one or more of those petitions are granted, the worker may accept the offer of whichever sponsoring employer they choose. Should that choice not be the prospective employer whose petition was actually selected, the employer chosen by the worker need only file an H-1B transfer, which is not subject to the annual cap and is typically a rubber stamp approval process. In such a case, the company that filed the successful petition is left with no worker, and no recourse through the H-1B program until the next year’s filing period.

US Citizenship and Immigration Services does not track how often multiple petitions are filed by affiliated entities for the same worker, thus we can’t be sure how prevalent the practice may be.

Corporate members may access a recent report we published on global work migration policies, including the various US work visas on offer.