High-skilled hacks: a (very) brief overview of H-1Bs (more to follow)

This post is part of my “high-skilled hacks” series, focused on immigration to the United States. The series explores various workarounds and caveats to immigration law that high-skilled workers and their employers have discovered in order to further their own interests, at the expense of the original intent of immigration law. Through the series, I try to argue that, although these hacks are an improvement over an alternative where only the basic immigration system existed, freer migration for all would be simpler, fairer, more efficient, and more just. The introductory post of the series is here.

My primary purpose here is to provide information rather than push a viewpoint. Nonetheless, I do not claim to hide my perspective. Rather, the purpose here is to present information as seen from a particular viewpoint (something akin to historical revisionism). Later posts in this series may include more focused discussion of my viewpoint, as I delve deeper into the regulations.

In this respect, my writing here differs from the many Wikipedia pages related to the H-1B that I have created, where I strive to stick to facts and avoid revealing viewpoints. These pages include: Labor Condition Application, Form I-129, Premium Processing Service, H-1B-dependent employer, public access file, American Competitiveness and Workforce Improvement Act (ACWIA), American Competitiveness in the 21st Century Act, H-1B Visa Reform Act of 2004, and Employ American Workers Act. For full disclosure, I also paid for the creation of the pages on H-1A visa and H-1C visa.

The following topics related to the H-1B visa are covered in this post.

  • Steps to getting started in H-1B status.
  • Relationship, similarity and differences between the H-1B and permanent immigration.
  • Key stages in the legislative history of the H-1B.
  • The H-1B annual cycle and cap. This is a very brief overview of the mechanics of the status. Workarounds, such as the use of Optional Practical Training and the use of other work visas as a temporary measure, are discussed.
  • Comparing the stated purpose and real use of the H-1B program. Once again, this is a brief summary that will be elaborated on in future posts.
  • How the H-1B compares with other options: L-1, TN-1, O-1, and H-2B (to name the most salient alternatives).

The following are not covered in this post and will be the subject of future posts.

  • The role of H-1B1 and E-3, and their effects on the market of technology workers from Singapore, Chile, and Australia in the United States.
  • A deeper look at the different occupations, intended employment areas, and countries of origin for users of the H-1B program.
  • A full analysis of the educational credentialism in the H-1B system, contrasted with other temporary and permanent immigration categories. I discussed some of these points in an Open Borders Action Group post, that Bryan Capan reblogged on EconLog. But I intend to cover it in more depth.
  • A better overview of exactly how the H-1B lottery works. Basically, understanding what your chances are based on whether you have or don’t have a master’s degree.
  • The role of the H-4, the status for dependents of H-1B holders, and how the two H statuses interact.
  • Comparison with analogous statuses in other countries, i.e., with other generic temporary skilled work visa categories.
  • What the whole H-1B application process means for people who aspire to having a job (temporarily or permanently) in the United States, particularly people who are not from any of the treaty countries (Canada, Mexico, Australia, Singapore, and Chile). Note that the current post touches only briefly on the issue from the perspective of a job-seeker.
  • A detailed discussion of the Labor Condition Application and U.S. Department of Labor investigative authority. This will included discussion of H-1B-dependence, its current and past prevalence, and its implications for the mid-level tech workers who account for about 50% of H-1B use.
  • A full discussion of various criticisms leveled at the H-1B program, by people such as Norm Matloff, Michelle Malkin and John Miano in their book Sold Out, and labor unions and labor-advocacy think tanks such as the Economic Policy Institute (see for instance here). Either in the same post or in a different one, I will also look at the pro-H-1B rhetoric used by different groups ranging from immigration lawyers to liberal think tanks and advocacy centers to libertarian think tanks.

The list of things I don’t cover here also includes other stuff I haven’t yet even realized is important enough to be discussed! But the above list is already pretty daunting.

The H-1B: the most important work visa

One of the most important sources of high-skilled migration to the United States is the H-1B visa. The H-1B is significant in at least a few ways:

  • For many high-skilled workers who enter the United States for work, the H-1B is how they are able to first enter.
  • Even those who enter for work in other ways (such as the TN-visa, L-visa, or OPT on F student status) often transition to the H-1B when they get the opportunity.
  • While many who come to the US on H-1B status eventually leave, many others settle permanently in the United States. Some do so by applying for permanent residency through one of the EB visas (which has a long wait time, and the H-1B allows them to work as they wait for it to come through). Others find true love among US citizens and permanent residents, marry them, and transition to lawful permanent residency through the Immediate Relative or Family based quotas.
  • Those on the H-1B who do go back to their home countries often play a key role in facilitating technology transfer and outsourcing and the international spread of technology.

Later, we’ll talk more about why so many people want or need to switch from other temporary work statuses to the H-1B.

There are two other close cousins of the H-1B: the H-1B1 (for Singapore and Chile) and the E-3 (for Australia). We will not discuss these variants in the current post, but will review them later.

Steps to getting into H-1B status

The following is the sequence of steps for getting H-1B status.

  • First, the employer files a Labor Condition Application with the U. S. Department of Labor, showing that the worker to be hired will be paid the same wage (or a higher wage) compared to U.S. workers within the company doing the same job, as well as others in the geographic area. The LCA has other stipulations regarding working conditions, strikes and lockouts (most of which are irrelevant for most employers). Note that (with the exception of the case of H-1B-dependent employers or employers who have been found to be willful violators) the LCA does not need to assert that no qualified United States worker is available! UPDATE: Alex Nowrasteh has a blog post on the Congressional discussions around whether to impose the requirement, and the ultimate decision not to do so.
  • With an approved LCA and other supporting documentation, the employer files Form I-129 with the United States Citizenship and Immigration Services (USCIS), a division of the Department of Homeland Security. Approval of this form gives the employee permission to start employment under the employer at or after the start date of employment, and until the end date of employment. The employee must be with the employer for the entire duration of H-1B: even a day of unemployment nullifies H-1B status. The Form I-129 can be filed at most six months in advance. For cap-subject applications, prior to considering a H-1B application, USCIS makes sure that it has space in its annual quota. Since the quotas start every fiscal year (October 1), most H-1B applications occur in the beginning of April and set a start date of October 1.
  • With an approved Form I-129, the employee can start work with the employer if present in the United States already (in other words, Form I-129 also allows for change of non-immigrant status; there is no need to file a separate Form I-539). However, if not present in the United States, the employee needs to obtain a H-1B visa from a consular officer at a United States consulate. Consulates are under the U.S. Department of State. After obtaining a visa, the person may enter the United States at most 10 days in advance of the start date of the job. At the port of entry (the airport for people flying in), the person receives a Form I-94 from the U.S. Customs and Border Protection Office of Field Operations officer (CBP is under the Department of Homeland Security).

H-1B and “permanent” immigration

There is a lot of confusion about the role played by the H-1B and its relation to Lawful Permanent Resident status (getting a Green Card). H-1B status is a dual-intent non-immigrant status. Let’s unpack that. Here, “non-immigrant” means that the status is a temporary status to be in the United States (in this case, for work) and does not provide any automatic path to permanent residency. The “dual-intent” part says that it is okay for a person on H-1B to also be trying to transition to a Lawful Permanent Resident (LPR) status.

There are two main routes to LPR status (aka “immigrant” status): Employment-based (EB) and family-based (this includes Immediate Relative (IR) and Family (F) statuses). The initial USCIS form for EB(-1,2,3) statuses (the analogue of Form I-129) is Form I-140 and that for F and IR statuses is Form I-130. (These are not the only routes; there are Diversity Immigrant Visas, refugees and various special immigrant categories, and the EB-5 category for investors and entrepreneurs; but let’s set all those aside since most of them aren’t very relevant to the sort of person who’s doing or considering a H-1B).

One key difference between LPR status and temporary statuses like H-1B is that, once LPR status is obtained, it is no longer necessary to maintain the connection (whether employment-based or family-based) that was the basis of getting the status.

In other words, once you have a green card, you can quit the job or divorce the spouse that helped you get the green card. LPR status can be revoked for various reasons (such as committing crimes or aggravated felonies, or being outside the United States for too long), but maintaining the original reason for acquiring the status is not required. LPR statuses also offer a path to citizenship: somebody who has been a LPR for five or more years can file Form N-400 for naturalization.

Another key difference between LPR status and temporary statuses is the complexity and time taken for the application process. There are actually two aspects to the time taken for this status, that operate in parallel (so the longer of these is the constraining factor). These are:

  • The processing time for applications: Processing times for Form I-140 applications can be quite long, varying from 5 months to a year. In addition, some EB categories require a separate process called PERM labor certification prior to filing Form I-140. PERM labor certification is similar to the LCA, but with much more onerous requirements, and can take several months to obtain. Essentially, the goal of PERM labor certification is to establish that the worker has truly unique skills and the company is unable to hire a qualified United States worker with those skills.
  • Independent of this processing time is the time taken for a visa number to be available. Permanent immigration is controlled by a complicated system of quotas introduced by the Immigration and Nationality Act of 1965, that controls the number of permanent immigration slots that are released every year by the preference category as well as the country of chargeability. The queues for these are managed by the Visa Reporting and Control Division and published in the Visa Bulletin. Particularly for large countries like India, China, and Mexico, these categories can be backlogged by over a decade. Note that the potentially indefinite backlogs for “permanent” migration are consistent with its meaning: whereas with temporary worker needs, it does not make sense to have the application queued for several years, this might make sense for a permanent worker or a family member.

The reason the total time taken is the maximum rather than the sum of these two wait times is that the priority date (that determines an application’s position in queue) is taken as the date the Form I-140 was received (and for applications with labor certification, the date the labor certification petition was received). (Note that the way the caps operate for EB status is different from the way they operate for H-1B: the H-1B quota is reset annually, and applied at the time Form I-129 is adjudicated, whereas the quota for EB status can extend indefinitely and therefore there is no upper limit on how far the backlog can grow).

In addition to the max of these two, there could be some processing time for the Form I-485 (Adjustment of Status application) if the employee is already in the United States in H-1B or another status, or to get an immigrant visa, if the employee is outside the United States. Generally, the processing for the Form I-485 or immigrant visa begins a little before the applicant’s priority date becomes current, so that the two finish in parallel.

The upshot of this is that getting an employee on an immigrant status is a process that can take somewhere between several months (if the employee happens to be from a country that doesn’t have huge backlogs) to decades (if the employee is from a country with huge backlogs). Regardless of how brilliant the employee is, therefore, this is not a very effective solution for most employers, who are operating at much shorter timescales with respect to their hiring needs. For this reason, even employers who are interested in sponsoring employees for a green card may initially hire them on a H-1B so that the employee can start working for them while the steps to transition to immigrant status are ongoing. This relationship has been implicitly acknowledged with the American Competitiveness in the 21st Century Act (AC21), where people with long-pending Form I-140 or Form I-485 applications can extend their H-1B while waiting for it to go through.

When the EB category and the current incarnation of H-1B were first introduced in 1990, the EB category started off without backlogs. Hence, those employers who sought workers on a more permanent basis went the EB route, and those who wanted temporary work went the H-1B route. As the EB category started developing backlogs, and demand for high-tech workers increased overall, the pressure on the H-1B status increased. Since it is extremely difficult to adjust the overall rate of permanent immigration (since that involves fundamental changes to the Immigration and Nationality Act), the EB category will likely continue to be severely limited, and the H-1B will continue to be the first step for many workers, including those who qualify for EB status.

Key pieces of legislation that have shaped the H-1B

H visas were originally introduced with the Immigration and Nationality Act of 1952, with a H-1 for skilled workers and a H-2 for unskilled workers. The Immigration Nursing Relief Act of 1989 (text) created a separate H-1A visa for nurses, and renamed the existing H-1 program to the H-1B program; however, the substantive structural changes to H-1B would occur with the Immigration Act of 1990 (described below). The H-1A would later be replaced by a H-1C visa, a status that was retired in 2009 and is no longer granted.

For more on the early history of the H-1 visa, prior to its splitting into the H-1A and H-1B, see the post A Legislative History of H-1B and Other Immigrant Work Visas by a blogger critical of the H-1B program.

Below are the key legislations affecting the H-1B:

  • Immigration Act of 1990 (IMMACT), passed by the 101st United States Congress and signed into law by President George H. W. Bush, introduced the basic rules of the H-1B: a three-year visa that could be extended another three years, an annual cap of 65,000, a Labor Condition Application with rules regarding prevailing wages, and a concept of Specialty Occupation. Surprisingly, every phrase of the preceding sentence continues to describe the H-1B regime today, even though, in practice, a number of hacks have led to far more H-1Bs effectively being available. But more on that later. Note that since this Act made it through the first stages of its legislative process in 1989, it is sometimes said that the H-1B was introduced in 1989, but its actual implementation (“going live”) happened only in 1990.
  • American Competitiveness and Workforce Improvement Act (ACWIA), passed by the 105th United States Congress and signed into law by President Bill Clinton on October 21, 1998, offered temporary reprieves from the caps, but otherwise was a victory for restrictionists and advocates of labor. Specifically, it introduced the concept of H-1B-dependence and imposed additional LCA attestation requirements (around displacement, secondary displacement, and recruitment and hiring) for H-1B-dependent employers and willful violators. With that said, there were discussions of imposing the requirement on all employers, but these were successfully defeated. For more, see Alex Nowrasteh’s post.
  • American Competitiveness in the 21st Century Act (AC21), passed by the 106th United States Congress and signed into law by President Bill Clinton on October 17, 2000, extended some temporary reprieves and introduced a number of hacks that effectively expanded H-1B availability, while offering some minor sops to the other side. These hacks will be discussed later in the piece.
  • H-1B Visa Reform Act of 2004, part of the Consolidated Appropriations Act, 2005. The main relevant provision here was to add 20,000 slots for people with graduate degrees every year. There were also some changes (in the direction of tightening, but also toward more standardization) to the process for the LCA.
  • The H-1B1 (for Singapore and Chile) and E-3 (for Australia) were created as a result of free trade agreements that happened between 2003 and 2005: Singapore–United States Free Trade Agreement (ratified 2003, effective January 1, 2004), Chile-United States Free Trade Agreement (ratified 2003, effective January 1, 2004), and Australia–United States Free Trade Agreement (ratified 2004, effective Janaury 1, 2005).

Since 2004, there does not appear to have been any new legislation regarding H-1Bs, with a few minor exceptions related to additional fees and attestations:

  • Employ American Workers Act (signed into law in February 2009 with a two-year sunset provision, not renewed): This basically treated any company that was a recipient of TARP and Federal Reserve Act Section 13 funds as a H-1B-dependent employer for the purposes of the LCA. These employers needed to make the additional attestations required. Once a company had paid back all the funds they were no longer subject to these requirements.
  • Public Law 111-230, that imposed an additional fee of $2,000 for H-1B petitions (Form I-129) between August 14, 2010 and September 30, 2014 (extended by Public Law 111-347 to September 30, 2015), in cases where employers had more than 50 H-1B workers and more than 50% of their workforce was H-1B workers. These filters were stricter than those for classifying an employer as H-1B-dependent. The fee has expired.
  • Public Law 114-113, that imposes an additional fee of $4,000 for H-1B petitions (Form I-129) filed between December 18, 2015 and September 30, 2025. This effectively doubled the Public Law 111-230 fees.

Loosely speaking, of the 1990-2015 H-1B regime, the latter half has been legislation-free. Changes have happened, but mostly at an administrative and executive level, with the United States Citizenship and Immigration Services (USCIS) issuing additional guidance on changing interpretations of existing provisions. This extreme stability is not indicative of anybody being satisfied with the status quo — there is general consensus within the Beltway that some liberalization in H-1Bs would be desirable. Rather, as I discussed in my introductory post, it’s a phenomenon of gridlock: high-skilled immigration is treated as a deal-sweetener that different sides want to tack on to their preferred bills to make them more palatable, but isn’t important enough or urgent enough for anybody to pass immediately.

The history of temporary migration of skilled workers prior to the H-1B is important to understand, and we’ll probably cover it in our origins of immigration restrictions series. However, for reasons of space and focus, we’ll restrict discussion here to the H-1B as it started in 1990.

The H-1B annual cycle, lottery, and workarounds

My overview here is not really intended as either a definitive description of law or an action guide. For a more definitive and legally accurate description, see the USCIS page about the H-1B cap season for Fiscal Year 2017. For something geared more to potential applicants, see the RedBus2US “All about H1B Visa Cap” guide.

There are two aspects of the H-1B that make it a fickle tool for employers, over and above the legal fees and administrative overhead involved.

First, the annual cycle. The H-1B cap is applied separately for each fiscal year. The cap applies only for the worker’s first H-1B at an institution that is not a nonprofit research institution (in other words, it doesn’t affect H-1Bs issued to professors and postdocs in academia). It also does not apply to workers transferring jobs, or extending beyond the first three years to another three years (or possibly more if the worker has a pending I-140 or I-485). It does apply for workers who leave after a H-1B is over and then return for a new H-1B.

The annual cap is set to 65,000 (of which 6,800 are set aside for the H-1B1, but unused H-1B1s are returned to the general pool the next year, so effectively the annual number of slots is pretty close). There are an additional 20,000 slots for people holding master’s degrees from accredited United States universities. That’s a total of 85,000. There are approximately 50,000 successful applications from nonprofit research institutions. A total of about 135,000 new H-1B Form I-129s are approved annually, 85,000 of them cap-subject.

The year for which the H-1B caps apply annually is the Fiscal Year (FY) and it starts October 1 of the preceding calendar year (for instance, FY 2017 starts October 1, 2016). Form I-129 petitions can be submitted at most six months in advance of the start date of employment. Thus, all cap-subject applications need to be made around April 1, with a start date of around October 1. The USCIS generally stops accepting applications after the first week of April. Note: While rereading, I realized that there have been many years, particularly those in the aftermath of the 2007–08 recession, when the quota has taken much longer than one week to be filled. However, it now appears to fairly consistently get exhausted in the first week. My guess is that the only thing that would make the quota extend out much further would be either a significant U.S. recession or other significant changes to the world economy. If you’re interested in data on what the cap was in different years and when it was reached, check out these two links on RedBus2US: H1B Visa Total Cap Stats from 1990 to 2017, Trend Plot until 2017 (information on the size of the cap and how it has varied) and H1B Visa Cap Reach Dates History 2000 to 2017 – Graph – USCIS Data (information on the date the cap was reached). The information in the links is all based on data available on the USCIS website but presented in an easier-to-digest format.

Of the 200,000 or so applications received, it runs two lotteries: one lottery picks 20,000 of the master’s degree applicants, and the second picks 65,000 from everybody in the pool who failed to make it to the first 20,000 (so master’s degree holders get effectively two shots, others get only one). [Slight note: USCIS conducts the lottery before adjudicating the petitions. So it actually gets slightly more petitions through the lottery than the annual cap. Essentially, it budgets how many to select in the lottery based on its estimated rejection rate. If it undershoots, it will announce that there are slots remaining, and accept more applications.]

There are some obvious problems with practical usability of this sort of system. An employer who realizes in December the need to hire a worker needs to wait until April to apply, and wait until October for the worker to start. Even worse, an employer who finds a worker to hire in June needs to wait till October of next year to have the worker actually start. And that’s ignoring the issue of the low chances in the lottery. For workers without master’s degrees from the United States, the lottery chances are less than 50% (more precise number-crunching in a later post, though naive estimates, such as those used in this San Francisco Chronicle piece, place the number at 25%). So in expectation the employer may have to wait till October of the year after next.

Admittedly, this isn’t as bad as the long wait times (both processing times and the queue wait times on account of visa number availability) for the EB category. However, it’s still not a very practical time horizon except for large companies that can afford to wait, or multinationals that have carefully built a business model to cope with the regulations. Multinationals (whether it’s high-tech companies like Google or mid-level companies like Infosys) that are already employing the person in another country and want to move the person to the US office can afford to wait: the person stays employed in the office abroad, and at the appropriate time, moves to the US. Note that multinationals that do this may also be able to use L visas in some cases, thereby avoiding the H-1B’s annual cycle. Small companies that are based only in the US, on the other hand, often find it harder to afford these time horizons.

One workaround is the use of other more temporary statuses to start employment and then transition to H-1B when one makes it through the lottery. One example I previously discussed was the use of Optional Practical Training. A just-graduated student can start working for an employer on OPT, and then transition to the H-1B status next year. The OPT is 12 months long, which is sometimes not enough to meet the H-1B’s annual cycle (for instance, for somebody who starts work in July) so the OPT has a cap gap extension for people with pending Form I-129 applications in cap-subject categories. There is also a 24-month STEM extension that can be used by a person with a STEM degree. With this STEM extension, plus the H-1B cap gap extension, it is possible to get three shots at the H-1B lottery while working using the OPT. For those with master’s or Ph.D. STEM degrees from United States universities, therefore, the combination of the STEM extension and the H-1B masters quota makes it quite likely that the person will be able to eventually secure the H-1B if the person gets an employer willing to sponsor him or her.

Other temporary and more restrictive visas people might use include the TN-1 (Canada), TN-2 (Mexico), and O-1 (all countries). These are discussed as full-fledged alternatives to the H-1B in a later section, but they are also useful as complements. The TN-1, in particular, is useful because it can be extended indefinitely in three-year increments, allowing a person to keep trying his or her chances at the H-1B lottery while continuing to work. An initial O-1 visa is granted for up to three years, also giving enough time to get a few shots at the H-1B lottery while working.

Note that the role OPT plays with relation to H-1B is similar to the role H-1B plays with respect to EB: as a potential temporary stop-gap while the other, slower status is still in process.

Interestingly, one of the ways that smaller companies end up hiring H-1B workers (in addition to the OPT route) is people who change jobs from big companies. Essentially, you start your H-1B at a big company, then subsequently move to a startup. The American Competitiveness in the 21st Century Act (AC21) exempts such cases from the H-1B cap, therefore avoiding both the lottery and waiting for the annual cycle (note, however, that the person does not get the full six years for the new H-1B but only whatever is still remaining of it). As it is, many people start out at a big company to make some money and get some experience before moving to a smaller company. For foreign workers, H-1B regulations offer yet another reason for this kind of trajectory.

The stated purpose, and real uses, of the H-1B

The stated goal of the H-1B is to temporarily employ foreigners when the supply of skilled workers in the United States falls short of employer needs. In other words, the H-1B is intended as a stop-gap measure to address temporary labor shortages for skilled workers. It is not intended to be a path to permanent migration (for that, there is the EB category, discussed earlier). It is also not meant to be restricted to cases of truly outstanding people (for whom, in addition to the EB-1 category, there is the O-1 category for temporary workers). It is also not intended as a means for technology transfer, i.e., the goal of the H-1B is not to train people for a few years in the United States so that they can return to their home country with increased productivity and better practices. Rather, it is meant to address cases where employers have a temporary need for additional workers and can’t find people in the United States fast enough, so they hire people from abroad briefly, and then once the supply of workers in the U.S. catches up, they replace the foreign workers with the now-appropriately-qualified U.S. workers. This stated goal of the H-1B is the justification for a fee on H-1B applications (of $750 or $1500 depending on the employer’s size) whose funds are used for improving science education and workforce training in the United States.

In the real world, employers don’t use the H-1B in that way. They do not “diligently search for a US worker and only reluctantly hire a foreigner.” Rather, the significant legal fees and loopholes around the H-1B lead to two broad kinds of use cases: multinationals that have built a business around arbitraging different strength profiles, income differences, and skillset differences between countries, as well as companies with enough deep need for specific skilled workers that they are willing to incur additional legal fees and the tyranny of the H-1B’s annual cycle to get a particular worker that they want.

Let’s examine these two use cases in a little more detail:

  • The most quantitatively significant (accounting for about half of H-1B use) is mid-level technology employees by large multinational technology/software firms to which other firms outsource their work. The Economic Policy Institute (a think tank that advocates the interests of labor, stereotypically construed) notes that the top ten users of the H-1B program, that account for half of H-1B use in the United States, all fit in this framework: Cognizant, Tata, Infosys, Wipro, Accenture, HCL America, Tech Mahindra SATYAM, IBM & IBM India, Larsen & Toubro, and Deloitte. Many of these have either their roots or significant operations in India, and that is a big part of how half of new H-1Bs are granted to people from India. Most of these workers don’t go on to transition to LPR status. Partly, this is because they don’t qualify for the higher bar set for EB status. Their short-term employment in the US office allows them to take back relevant technology and skills to their home countries, and, of course, to save money for their personal use. (For more information on the distribution of H-1B visas and approvals by country, industry, and employer, see the Wikipedia page section).
  • The other use case is high-skilled technology firms in sectors (programming, banking, quantitative finance) that need to hire workers. There are two main ways that these companies connect with the H-1B workers to fill these positions: some of the workers completed higher education in the United States and get on the job market at the end of their higher education. Others may be hired by the company at an office in another country and then transferred to the United States office (for instance, Google or Microsoft might hire a worker in Bangalore or Hyderabad, and when the worker later gets promoted or moved to a division in the company that is only at the company’s main headquarters in Mountain View or Redmond, sponsors a H-1B for the worker). The business model of the hiring companies is not built around the workers returning to their home countries; in fact, the hope is that the workers will be able to stay in the United States for as long as necessary. Many of these employees may later be sponsored for EB status if they are considered sufficiently valuable to the company. A good summary of this use case, in contrast with the preceding one, can be found on LinkedIn.

While the first use case has been decried (by the EPI as linked above, and by others) for the way technology transfer contributes to more offshoring of jobs, the second use case has been decried for creating more permanent competition in the market for skilled labor, leading to lower wages and reduced incentives for Americans to enter these sectors. With that said, not all critics of H-1B programs are critical of both kinds of use cases. Some people, like current U.S. Republican Presidential primary leader Donald Trump as well as Y Combinator co-founder Paul Graham, are critical of the first use case of the H-1B but supportive of the second. UPDATE: At the time I wrote this post, Trump hadn’t put out a formal set of immigration policies, so I was mostly going by remarks he had made. The most recent policies he has put out seem to suggest that he is opposed to both types of uses of the H-1B. For more, see Alex Nowrasteh’s post on the subject.

How does the H-1B compare with other options?

There are a number of alternatives to the H-1B, but none of them are good enough to render the H-1B unimportant. What the alternatives do help with is, in many cases, reducing the “pressure” on H-1B somewhat. So if you’re a H-1B applicant, you might want to thank the many other alternative visas for taking some of the competition out. A good place to check out the set of available work visas that make sense for each occupation is US Work Visas: Which One Shoud I Apply For? on VisaPro.

  • The L visas are visas available to multinationals that allow them to transfer people working for the same company but in another country.

    Advantages: Fewer restrictions on the type of occupation and educational qualifications, longer period (7 for the L-1A and 5 for the L-1B, as opposed to 3 + 3 for the H-1B.

    Disadvantages: Only available to multinational companies, which excludes many technology companies, particularly the smaller ones.

    Microsoft has been known to use L visas creatively: it first gets people to Canada on a work visa, whereby they can visit the Redmond office (in the United States, close to Seattle, Washington close to the Canadian border) with relative ease, and eventually transfers them over to the Redmond office.

    You can see more detailed comparisons here and here.

  • The TN-1 status for Canadians, and a similar but somewhat more restrictive TN-2 status for Mexicans, allows people from these countries to work in the US in renewable 3-year increments.

    Advantages: The TN-1 for Canadians is uncapped, and can in principle be renewed many many times.

    Disadvantages: The set of occupations that are eligible for TN-1 is narrower than for H-1B. For instance, Computer Systems Analysts are TN-eligible, but mere computer programmers aren’t. The application and renewal process for TN-1 is also less standardized, and even though multiple renewals are possible in principle, renewals are often rejected for unclear reasons.

    You can see more detailed comparisons here and here.

  • O (“Outstanding”) visas are available to “aliens of extraordinary ability in the sciences, arts (including television and motion pictures), business or athletics.”

    Advantages: No caps, unlike the annual 65,000 visa cap for H-1B. Also, students and exchange visitors who came to the United States on J status can get an O-1 visa but cannot apply for the H or L visa without completing the 2-year foreign residence requirement.

    Disadvantages: More documentation and proof needed of extraordinary ability, with a particular focus on credentialism and formal academic accomplishment. This makes many people ineligible. Many star programmers, who might command several hundred thousand dollars in salary, may not be able to qualify for this visa.

    You can see more detailed comparisons here and here.

  • H-2B visas: The H-2B is a temporary visa for low-skilled work. As best as I can understand the law, there is no restriction on using the H-2B for high-skilled work. However, also as best as I can make out, it is quite rare to use the H-2B for any job where the H-1B could be used. An example of a case where there may be genuine ambiguity regarding whether the H-1B or H-2B is most appropriate is the case of a chef or cook. Specialty chefs may be able to get H-1Bs, but “food preparation worker” is a typical H-2B occupation.

    Advantages: No need to file a Labor Condition Application. Suitable in cases where wages are lower. No need to demonstrate educational qualifications. Lower filing fees, and savings can be significant if hiring large numbers of workers together. Also, instead of an annual cap, there is a twice-a-year cap.

    Disadvantages: Additional work is needed to obtain a H-2B Temporary Labor Certification, which in turn requires posting a job order publicly with a State Workforce Agency. The application process can be initiated at most 75 days in advance, making it harder to plan ahead. Premium Processing is currently disabled. The H-2B is made initially available for at most one year, and can be extended in increments of at most a year, to a maximum duration of three years. This is less than the 3 + 3 for the H-1B. Also, whereas the H-1B can be extended while employment-based applications for lawful permanent resident (either the Form I-140 or the Adjustment of Status) are pending, there is no such provision for H-2B.

For better or worse, the majority of high-skilled immigrant workers and companies sponsoring them use the H-1B despite the uncertainty of the application process, largely because it has a relatively large quota, relatively low burdens of proof, and accessibility to people who don’t have a lot of bureaucratically determined academic credentials as well as to companies that aren’t multinationals with deep pockets.

PS: After drafting an initial version of this post, I Googled around for lists of common misconceptions related to the H-1B, and came across this article. I was pleased to see that the draft I had covered about half the myths directly, and alluded to the relevant material that addresses the remaining half. I also made some edits to add in more explicit mention of the material related to the myths I didn’t explicitly cover.

Full disclosure

  • I am currently working in H-1B status in the United States. I started work on this post while I was still in student status.
  • See the note at the beginning of the article on Wikipedia pages I created while researching for this post.

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