Each spring presents a special immigration law spectacle: the H-1B cap season.
The H-1B visa is a U.S. work visa that can be applied for by U.S. companies for foreign skilled professionals. They must have (among other things) at least a bachelor's degree or its equivalent, and the job offered must require such a qualification. The H-1B visa has enjoyed great popularity for years - not only among U.S. employers in the highly competitive "War of Talents," but also among international professionals seeking to gain a foothold in the United States.
As one of the few U.S. employment visa categories, however, it is limited in number. In the U.S. fiscal year (FY = October 01 - September 30), only 65,000 H-1B visas are available (plus a special quota of 20,000 for individuals who have completed a master's degree in the U.S.). For years, demand for this category has far exceeded the so-called H-1B cap. This results in a not uncontroversial and complicated application process:
Only those U.S. companies (and their potential applicant:s) that register via an online portal of the U.S. Immigration and Naturalization Service during a roughly 14-day window in March are even considered. If USCIS receives more registrations for the upcoming tax year than are available under the H-1B cap, a computer-generated lottery process is used. Only for these drawn individuals can U.S. companies then file H-1B petitions with U.S. immigration authorities beginning April 1.
For FY 2024 (October 1, 2023 - September 30, 2024), all H-1B visas are already out of stock. The trend of the last few years continued - not entirely surprisingly - also this year the demand of the US economy for H-1B visas far exceeded the supply according to the quota.
One record number immediately catches the eye: in FY 2024, 780,884 applications from U.S. companies were received in the online registration tool - a significant increase of about 60% compared to the previous year, where "only" 483,927 potential H-1B applicant:s registered.
Of course, the more applications received, the lower the chance of being selected in the lottery process. Thus, in FY 2024, only 14.6% of potential H-1B applicants:in could be considered. This compares to 26.9% in FY 2023 and as many as 46.1% in FY 2022, as fewer registrations were received.
Part of this dramatic increase in demand can certainly be explained by the tight labor market situation in the U.S. and the shortage of skilled workers there.
However, the USCIS sees a significant increase in multiple registrations via the online portal as the main cause. According to the U.S. Immigration and Naturalization Service, 408,891 registrations were filed for foreign persons who benefit from the fact that several U.S. companies have made registrations on their behalf via the online portal. This, of course, increases the chance of selection in the H-1B lottery. In principle, this does not violate the filing process or immigration laws and is normal in a competitive labor market.
However, the dramatic increase in multiple registrations for the same individual from 165,180 in FY 23 to over 400,000 for FY 24 raises questions for USCIS:
"The large number of eligible registrations for beneficiaries with multiple eligible registrations - much larger than in previous years - has raised serious concerns that some may have tried to gain an unfair advantage by working together to submit multiple registrations on behalf of the same beneficiary."
U.S. immigration authorities suspect abuse behind the numbers in order to gain unfair advantages in the selection process. Thus, an investigation has already been initiated.
With each H-1B online registration, the U.S. company certifies that there is a concrete (actual) U.S. job offer for the specific individual and that there has been no collusion with third parties to increase the chances of selection in the H-1B lottery. As mentioned, there are circumstances in which filings can legally be made for a foreign individual by multiple U.S. companies in the online portal. Namely, if that person has fortunately received multiple H-1B job offers at the same time in the highly competitive job market. This is not unusual as far as it goes.
But what specific accusations are being made by the USCIS?
The U.S. agency is said to have evidence of targeted collusion between individual U.S. companies that wanted to illegally increase the chances of H-1B selection by means of multiple registrations.
For example, several U.S. companies express their interest in hiring a foreign professional by registering online. As a result, this individual has an increased likelihood of being considered in the lottery process. The corresponding U.S. company now files the H-1B visa petition with U.S. immigration authorities and receives approval. Initially, H-1B visa holders are bonded to that employer. However, if the employment relationship is terminated and a new U.S. job offer is available, a potential U.S. employer may file an H-1B "transfer" petition directly. In other words, apply for an H-1B visa for that person, without a lottery process.
Certain companies are now trying to exploit this special feature - according to the fears of the USCIS. In some cases, companies are said to have been founded in the U.S. for the sole purpose of carrying out H-1B application procedures, then issuing dismissals in order to place these persons with "foreign" employers.
If these activities can be proven to U.S. companies, these organizations or individuals face criminal prosecution and revocation of potential H-1B authorizations.
In the wake of the fraud allegations in the air, USCIS has announced an improvement or change to the H-1B registration process, with the goal of preventing abuse. One option, for example, would be to conduct the H-1B lottery by individual rather than by employer. However, specific measures have not yet been mentioned. The next H-1B application round is expected to begin in March 2024 for FY 2025 with an earliest possible work start date of October 01, 2024.
The very low annual H-1B cap (of 85,000 maximum) continues to be the biggest problem for U.S. employers seeking to hire foreign skilled workers. From the perspective of many companies in the U.S., this significantly weakens their competitiveness in the international skilled labor market. The high demand for H-1B visas reflects nothing other than the enormous need for skilled workers in the U.S. economy.
Updated on 12.6.2023