Raising the Cap: The Need For Increased Numbers Of H-1B Visas For Skilled Workers

Wednesday, December 18, 2013 - 15:23

Companies across the United States are now beginning to assess their H-1B visa needs for the FY 2015 (10/1/14 - 9/30/15) filing season and are expecting even greater competition for the limited number of available H-1B cap slots. Raising the number of H-1B visas available each year would help to alleviate the growing disparity between insufficient H-1B visa availability and ever-growing U.S. business needs. The H-1B visa allows U.S. companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields, such as in architecture, engineering, mathematics, science and medicine. The workers must possess at least a bachelor’s degree and can be employed for up to six years with the visa.

Under the current U.S. immigration system, there is a cap on the number of H-1B visa petitions that the government accepts each fiscal year, commonly referred to as the “H-1B cap.” Since 2005, the H-1B cap has been set at 85,000, with 20,000 reserved for those with advanced degrees from U.S. academic institutions. There are some H-1B visa petitions that do not count against this cap, such as those for extensions, amendments, and for work at higher education institutions or nonprofit and government research organizations.  However, there is clearly a need for the availability of more H-1B visas to meet the demands of the U.S. labor market.

Each year USCIS begins accepting H-1B visa petitions during an initial filing period in April for the following fiscal year, which begins on October 1. If the H-1B cap is reached within five business days, the government runs a random selection of all cap-subject H-1B petitions received in that period. This was the case this year, when over 124,000 H-1B visa petitions were filed by U.S. employers by April 5, 2013, and then approximately one-third were rejected through the lottery. In fact, the H-1B cap has been reached earlier and earlier each year since FY 2011, and it is expected to be reached during the initial five-day filing period again for FY 2015. This indicates that the H-1B cap is set too low to meet the needs of U.S. employers.

Raising the H-1B cap will not necessarily result in an influx of foreign-born skilled workers, as some critics suggest. In fact, when the H-1B cap was 195,000 from 2001 to 2003, it was never even met. In 2001 there were approximately 163,200 cases counted against the H-1B cap, and only 79,000 for 2002 and 78,000 for 2003. Further, the number of H-1B specialty occupation workers is infinitesimal compared to the number of U.S. professionals in the workforce. The Bureau of Labor Statistics estimates that in 2012 there were 31,365,000 workers in the U.S. in professional and related occupations. The current H-1B cap number of 85,000 is less than 0.3 percent of this number, and even the previous level of 195,000 would only be approximately 0.6 percent of this figure. Therefore, raising the H-1B cap to address the shortage of skilled workers in the U.S. will not have a drastic negative effect on U.S. workers.

On the contrary, studies have shown that foreign-born skilled workers help the economy and actually create jobs for U.S. citizens. Many of those rejected H-1B petitions were filed by U.S. employers on behalf of foreign nationals who were educated in the U.S. in science, technology, engineering and mathematics (“STEM”) fields while on a student visa. These educated skilled workers are highly sought after by U.S. companies, and they help these companies to grow and hire more workers, including U.S. citizens. A 2012 report co-sponsored by the U.S. Chamber of Commerce found that every foreign-born student who graduates with an advanced degree from a U.S. university and stays to work in a STEM field creates on average 2.62 jobs for U.S. workers, often because they help lead in innovation, research and development. However, due to limited H-1B visa availability, these foreign-born U.S. graduates are often forced to leave the U.S.

Other countries have benefitted from more flexible immigration systems that adjust to meet the needs of their labor markets. For example, Australia has enacted a points-based system to attract foreign-born skilled workers to reduce its reliance on the mining industry. Under Australia’s skilled immigration program, applicants complete a survey that allocates points based on age, education and work history. If an applicant earns enough points, he/she may be asked to apply for a visa. This system has enabled technology-related industries to expand in Australia and has benefitted its overall economic outlook. On the other hand, the UK is suffering from a strict immigration policy designed to reduce the number of non-EU highly skilled immigrants by half, which is stifling economic growth. These restrictive policies have coincided with a decrease in foreign investment and a sharp decline of 0.7 percent in the UK’s GDP, resulting in the country’s worst recession in more than 50 years.

There is now a great need in the U.S. for a dramatic increase in H-1B visa availability in order to meet the demand of U.S. businesses for skilled workers. Comprehensive Immigration Reform promises some relief, as the bill passed in the Senate would increase the baseline H-1B cap to 115,000, with 25,000 reserved for holders of U.S. advanced degrees in STEM fields, and allow for increases in the cap up to 180,000.  Similarly, the House bill raises the standard H-1B cap to 155,000, with a STEM U.S. advanced degree exemption of 40,000. At least there is hope that Congress understands that an increase in the number of H-1B visas is simply good for U.S. business.


Michael D. Patrick is a Partner at Fragomen, Del Rey, Bernsen & Loewy, LLP, resident in its New York office. He may be contacted via email at mpatrick@fragomen.com. Robert Jones, a Contract Attorney, and Nancy Morowitz, Counsel at the firm, assisted in the preparation of this column. To learn more about Fragomen, please visit http://www.fragomen.com.