Tech Demand Likely to Be Strong in Annual H-1B Lottery

Despite layoffs thinning the U.S. tech work force, IT companies like Microsoft are expected to be among the companies competing for coveted H-1B visas when the annual government lottery for educated foreign workers gets under way.

Predictions are that U.S. Citizenship and Immigration Services is again likely to quickly hit its ceiling of 65,000 H-1B visas when the controversial program's annual lottery for educated foreign workers begins April 1. In 2008, the same quota was met in a single day, not to mention a supplemental program that provides for 20,000 additional foreign workers with advanced degrees.

The H-1B program is a temporary work visa program much prized among tech companies, particularly Microsoft and Indian outsourcing companies, to employ foreign guest workers who have the equivalent of a U.S. bachelor's degree in a job category that is considered by the USCIS to be a "specialty occupation." Tech employers insist the program is essential in the face of what they say is a shortage of U.S. IT workers.

Critics of the program, including U.S. Senators Charles Grassley (R-Iowa), Richard Durbin (D-Ill.) and Bernie Saunders (I-Vt.), are suspicious of those claims and have threatened legislation to impose greater accountability and transparency on the program. Tech layoffs and recent arrests tied to fraud and abuse in the system have only heightened the debate about H-1B visas.

However, business is still expected to be brisk when the lottery begins.

"Despite recent economic troubles and an expected decline in initial H-1B filings, it is likely the supply of H-1B visas will be exhausted during or before the start of FY 2010 [which begins Oct. 1, 2009]," stated a report (PDF) issued March 31 by the National Foundation for American Policy.

The Washington-based think tank said the cap quota will be hit again because of demand built up by the inability of employers to hire skilled professionals on new H-1B visas for over the past year and the low quota of H-1Bs relative to the size of the U.S. labor force.

"New H-1B visa holders each year represent only 0.07 percent of the civilian work force, a tiny proportion of the U.S. work force," the report stated. "Moreover, for the past several years no new H-1B worker could even be hired in the United States for at least a year due to low quotas, making it unlikely that employers would hold open jobs at a time if a qualified U.S. applicant was available."

The Association of International Educators also chimed in on the eve of the annual lottery.

"As America and the world fall deeper into recession, it is important to break free of the rhetoric of the political debate and refocus on the fundamentals. One fundamental is that talent is always a scarce resource. There is not enough of it to go around, and every country needs more of it," the group said in a statement. "To turn away individuals with skills that we need, who want to live and work in America, under the illusion that by doing so we are protecting our economy, is to deny ourselves a resource that we need to help pull us out of the recession and put our economy on a sound footing for the future. It will cost jobs, not save them."

Grassley and his colleagues think differently. After Microsoft announced it was laying off some 5,000 workers earlier in 2008, Grassley promptly fired off a letter to Microsoft CEO Steve Ballmer wanting to know if the company will be retaining H-1B workers rather than hiring similarly qualified American employees.

"My point is that during a layoff, companies should not be retaining H-1B or other work visa program employees over qualified American workers," Grassley wrote in a Jan. 22 letter to Microsoft. "Our immigration policy is not intended to harm the American work force. I encourage Microsoft to ensure that Americans are given priority in job retention. Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times."

The criticism of the H-1B visa program also prompted Congress to insist that a company taking economic stimulus funds be barred from hiring H-1B workers. The law took effect Feb. 17 and applies to any hire taking place before Feb. 17, 2011.

The program also took a hit as federal, state and local authorities began tightening the noose on H-1B fraud schemes in the United States, where USCIS claims one in five H-1B visas are obtained under false pretenses. Most recently, companies in New Jersey and Massachusetts were accused of H-1B fraud.

Four men were charged Dec. 4 with producing documents falsely stating that H-1B visa applicants had jobs with the Commonwealth of Massachusetts. Richard Schwartz, a now former Massachusetts employee, signed the documents and is charged with one count of visa fraud, which brings penalties of up to five years in prison time and a $250,000 fine.

Sridhar Reddy, Sudha Rani and Venkat Naidu are also charged with one count of visa fraud. Reddy and Rani face additional charges of visa fraud totaling up to 15 years of prison.

While the Massachusetts arrests were local in nature, a series of Feb. 11 raids conducted by the Department of Justice resulted in 11 arrests across seven states. According to the Department of Justice, the scheme involved hiring college-educated foreign workers to allegedly fill high-tech jobs in Iowa when, in fact, the workers were sent to the East and West Coasts while being paid the lower prevailing Iowa wage rate.

The investigation seems to center on Vision Systems Group of South Plainfield, N.J., and Praveen Andapally, identified as president of VenturiSoft, also based in South Plainfield. The other indictments include Vishnu Reddy, who was identified as president of Pacific West of Santa Clara, Calif.

Vision Systems Group faces charges of one count of conspiracy and eight counts of mail fraud and is looking at $7.4 million in forfeitures. Andapally also faces one conspiracy count, six counts of mail fraud, three wire fraud counts and two counts of making a false claim on an immigration matter. Reddy is charged with various conspiracy, mail and wire fraud counts.

Mail and wire fraud carry maximum sentences of 20 years in prison and a $250,000 fine, while false statements to immigration officials can involve up to 10 years of prison time and a $250,000 fine.