The administration is increasing scrutiny of H-1B visa applications for low-level computer programmers — the workers often recruited by outsourcing firms. So outsourcers may get fewer visas, which means more for everyone else, including Microsoft and other tech giants.
The new way foreign-worker visas are doled out in the United States could benefit some of the biggest technology companies, like Microsoft, Alphabet and Facebook, while punishing outsourcing firms that developed a disproportionate dependence on the program.
The administration is increasing scrutiny on H-1B visa applications for low-level computer programmers, focusing enforcement on the heaviest users of the program, and warning applicants not to discriminate against American workers. The size and scope of the program remains unchanged for now.
There are 85,000 H-1B visas distributed through a random lottery each year, and applicants rush to file by the start of the process, this year on April 3. Outsourcing firms — many of them based in India — often recruit lower-skilled workers through the program, so they may not get as many visas under the new rules.
That means more for everyone else, including U.S. tech giants. What some see as a crackdown may actually be a boon for these companies, according to Rod Bourgeois, head of research at DeepDive Equity Research. “If Indian firms have a harder time getting basic programming jobs approved for the visa process, then the firms truly hiring people with high skills and specialized knowledge will benefit,” he said.
Most Read Business Stories
- Tacoma's housing market is now the hottest in U.S. — and Seattle knows why
- Murray Cox is trying to take down Airbnb
- Where US home affordability is the worst
- Smart homes offer convenience but can also compromise privacy
- Young homebuyers scramble as prices rise faster than incomes VIEW
Alphabet’s Google told some of its workers Monday not to worry about the changes, saying its software-engineering roles don’t fall into the job categories included in the administration’s new guidance.
Other big U.S. technology companies didn’t say anything publicly. That’s tantamount to a round of applause compared with the industry’s reaction to President Donald Trump’s executive orders restricting immigration from a handful of Muslim-majority countries. Dozens of companies supported lawsuits against the orders.
Carl Shusterman, a former attorney for the U.S. Immigration and Naturalization Service, called the H-1B changes, which were outlined in a memo over the weekend, “a subtle threat” against outsourcing companies.
Seven companies had more than 1,000 visa applications for the lowest-level computer programmers certified by the Department of Labor in 2015, the last year for which numbers are available. All of them provide outsourcing services — such as information technology, human relations, payroll and accounting — for other companies. One of them — HCL America — is headquartered in the United States, with most of the rest based in India.
“The top 15 job shops are pretty much all from India. They get 85 percent of the H-1Bs. If they cut that number, then the American firms will get the bigger slice of the pie,” Shusterman said.
“A lot of the Apples or Googles are paying over $100,000 a year. They’re going after top talent,” he added. “This memo is really going after the lowest-paid people.”
The American technology industry is happy to go along with the framing of H-1B reform as a matter of cutting down on bad actors. “If you’re taking that out of the system, you’re able to take the program back to its true, stated purpose,” Michael Hayes, government affairs manager for the Consumer Technology Association, said in February. “Removing the abuse lets you see what the future needs of the system are.” He declined to comment on the recent changes.
Technology companies say they use H-1B visas differently from outsourcing firms. Their common refrain is that its bad policy to let foreign students earn advanced degrees from the best U.S. universities, then send them away to work in other countries. But that’s not the main use of the program.
Ron Hira, who studies immigration policy at Howard University, shared analysis with Congress last year that looked at the H-1B program from 2005 to 2012. Only two of the top 20 H-1B recipients over that time used more than 10 percent of their visas to employ people who held doctorates. About one-third of Intel’s H-1B workers held doctorate degrees, while Google was second with 12 percent. A majority of H-1B workers employed by Apple, Microsoft and IBM didn’t hold higher than a bachelor’s degree.
The administration or Congress could yet find a way to make more sweeping changes to the H-1B program that would disrupt how the largest U.S. technology companies use the program. There are a handful of members of Congress vying to alter the H-1B program. But because the visas are handed out once a year through the lottery system, the time for such action has passed in 2017.
Like the big U.S. tech companies, most industry policy experts kept quiet on this week’s changes. They’re keeping their powder dry before any bigger changes before the visa rush next spring.