Raise The H-1B Cap Or Continue To Export Talent

Monday, February 24, 2014 - 15:57

Though Congress has not yet been able to move forward with bipartisan action to overhaul the U.S. immigration legal system, both Democrats and Republicans agree that significant economic benefits stem from the immigration of educated foreign nationals. If there is any further need for evidence of the impact of foreign-born professionals on the U.S. economy, one might look no further than the recent and widely publicized appointment of foreign-born top executives at some of the most visible U.S. corporations – a trend that has increased significantly in the last decade. These appointments are not confined to the C-suite; they are examples of a larger trend of foreign-born professionals founding or holding executive positions at a significant number of U.S. companies. But if one of these foreign-born CEOs were today a foreign student newly graduated from a U.S. university, the choice of starting their career in the U.S. would not entirely be theirs.

One of the most highly anticipated annual events in U.S. immigration is just weeks away: the 2015 Fiscal Year H-1B Cap Filing Season, which begins on April 1, 2014. The H-1B visa permits companies to employ foreign nationals in specialty occupations that require theoretical or technical expertise in specialized fields, such as science or engineering. To qualify for the H-1B visa, foreign nationals must possess at least a bachelor’s degree or higher or its equivalent in the specialty occupation.

During the Fiscal Year 2014 filing, United States Citizenship and Immigration Services (USCIS) reached the statutory cap of 85,000 H-1B visas in the first week in which filings were accepted, with approximately 124,000 H-1B visa petitions received. When more petitions are received than there are visas available, USCIS enters the petitions into a lottery-style system. With the limited availability of H-1B visas, thousands of U.S.-educated foreign-born graduates who are not selected in the lottery may be forced to leave the U.S., taking their knowledge and skills elsewhere. Further, U.S. petitioners are left with a job vacancy after having expended a significant amount of effort and expense for the preparation and filing of the rejected petition.

Yet the sheer number of H-1B visa petition filings underscores the economic demand from U.S. employers for highly skilled professionals. As a wide range of industries continue to grow in the U.S., companies have increasingly experienced a shortage of highly skilled workers to fill the newly created jobs. Major U.S. organizations have assiduously advocated for immigration reform, and in particular, an increase in H-1B visa availability, to obtain individuals with the skills necessary to fill these high-tech jobs. If the demand is not met, these companies cannot continue to drive innovation and ultimately create new jobs in the U.S.

Despite the great demand for H-1B visas from U.S. companies, and in particular, in the high-tech industry, Congress has not raised the numerical cap of H-1B visas to meet the needs of U.S. employers. This year, it is anticipated that USCIS may receive twice as many H-1B petitions as there are visas statutorily available for the fiscal year. As a result, a significant number of highly educated (and often U.S.-educated) foreign nationals for whom H-1B petitions are filed must leave the U.S. to pursue their careers elsewhere if their petition is not selected in the lottery.

Both Republicans and Democrats see the disadvantage of exporting our next generation of talents. In June 2013, a bipartisan effort in the Senate resulted in a comprehensive immigration bill that includes an increase in H-1B visas based on market conditions. In January 2014, House Republicans released a set of broad standards for immigration reform, which include changes to the legal structure of employment-based immigration. While both Senate and House proposals acknowledge that reform of the employment-based immigration system is critical to the U.S.’s long-term economic interests, no definitive action has been taken to resolve the problem.

With just weeks to go before April 1, it is a perfect time for Congress to demonstrate its commitment to immigration reform. Instead of leaving the private sector with open jobs in the U.S. that they cannot fill, some have called for Congress to raise the current restrictive numerical cap to allow all H-1B applications submitted in the first week of Fiscal Year 2015 to be accepted. This is not a radical idea; Congress temporarily raised the H-1B cap to 195,000 from Fiscal Year 2001 through 2003. Raising the cap to keep pace with today’s economy will allow U.S. employers to fill immediate job openings as well as ultimately create new jobs in the U.S.

The shortage of high-skilled workers threatens U.S. innovation at a time when economic growth is needed most. Unless Congress is willing to take a much-needed step toward employment-based immigration reform, the U.S. risks losing the battle over the global talent pool, which includes a significant number of current and future U.S. business leaders who are foreign born.

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. Jessica Laumanns, an Associate 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.