Low H-1B visa annual limit makes it difficult for US firms to secure foreign talent: Study

Amid tech layoffs and freezed hiring, US firms are facing issues in recruiting foreign talent due to low annual limit for H-1B visa in the USA, finds a study

Edited By Sharmila Bhadoria
First Published3 Feb 2023
Low limit of the H-1B visa application is the main reason for lack of foreign talent hiring by US employers
Low limit of the H-1B visa application is the main reason for lack of foreign talent hiring by US employers

Amid rising need to rope in foreign skilled work force, US employers are finding it hard to secure foreign talent due to a low annual limit for H-1B visa approvals, stated a report titled “H1B Petitions And Denial Rates In FY 2022' by National Foundation for American Policy (NFAP).

The report has been released by National Foundation for American Policy, a nonpartisan research organisation. Currently,the annual H-1B visa allocations are capped at 85,000. In contrast to the annual limit, US employers submitted around 4,83,000 H-1B registrations in April 2022, reported US Citizenship Immigration Services(USCIS). 

H-1B visa is technically the key for foreign national to work in the USA. It is a non-immigrant visa used by US-based companies to employ foreign workers in speciality occupations that need expertise. It is a major factor for tech firms to hire tens of thousands of employees from countries like India and China. H-1B visas help skilled foreign workers earn and live in the US for up to six years in specialised fields such as technology, engineering, and medicine.

H-1B denial rates reduced after Trump administration's loss in federal court

H-1B visa's denial rates used to remain very high during Donald Trump's administration. However, the scene changed after the Trump administration's losses in federal court. Now the only problem with H-1B visa approval is the low limit of H-1B visas sanctioned in a month. 

Out of the 85,000 H-1B visa allocations made in a year, 20,000 are reserved for workers holding advanced degrees from US institutions. Whereas, the remaining 65,000 visas are approved on lottery basis.

Donald Trump administration made several actions to curb H-1B visa approvals. However as the court declared many of his administration's actions unlawful, there was a recovery in the H-1B visa approvals in the USA.

H-1B visa opens path for permanent residency for foreigners

After a H-1B visa holder completes his six year of tenure, he is eligible to hold permanent residency or Green Card. This is the only way for foreign nationals to work in the USA or even hold citizenship of the country in the future, reports PTI quoting NFAP

Maximum of US universities students pursuing technical courses are international students. The NFAP informed that around 70 % of full-time graduates in electrical engineering and computer and information sciences are foreigners.

“Despite the end of the Trump administration’s restrictive immigration policies that made US companies less competitive in the global battle for talent, companies in America still must deal with the low annual limit on H-1B petitions and employment-based green cards,” said Stuart Anderson, NFAP’s executive director.

Foreign nationals play an important role in US economy. A latest NFAP study revealed that 55 per cent of America's startup companies valued $1 bn or more have at least one immigrant founder.

Amazon got the most H-1B visa approval in FY 2022

In the previous financial year, Amazon got most of the H-1 B petitions approvied for initital employment. The company got 6,396 petitions approved in FY22. Infosys stood as the runner up company with 3,151. The company earned a 2,000 additional approvals compared to its numbers from FY 2021. 

Infosys was followed by TCS which got 2,725 employees. The number was lower than previous financial year. In FY 2021, Cognizant got 2,521 approvals, Google got 1,562 approvals, Meta received 1,546 approvals, IBM received 1,239 approvals and HCL America received 1,260 approvals. 

The average salary of H-1B visa holders stood at $1,08,000 in FY 2021, according to USCIS data. Whereas average salary was $1,11,000 for computer-related occupations. 

Despite the major tech firms trimming their workforce with major layoffs, there will be a start difference between the number of H-1b visa approvals and number of applications due to the set low limit by the US government. 

Challenges ahead for fired H-1B visa holders amid tech layoffs

As major tech firms are cutting their workforce by firing its employees, layoff for US based workers can be harder as they have to find another US-based job within 2 months to remain in the H-1B status. According to a ZipRecruiter survey, around 79 per cent of workers were rehired after a tech-company layoff or termination landed their new job within three months of starting search. 

Moreover, the survey found that four out of 10 laid-off tech workers were able to found jobs less than a month after starting their job hunt.
The chief economist at ZipRecruiter, Julia Pollak, says that even after the prevalent tech layoff, hiring freezes and cost-cutting by tech firms, many tech workers are finding their next job quickly.

(With agency inputs)

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