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Business News/ News / World/  U.S. Says Some Companies Cheat H-1B Lottery, Driving Record Applications
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U.S. Says Some Companies Cheat H-1B Lottery, Driving Record Applications

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Multiple tech employers are said to enter same the applicants to boost chances

Premium processing of H1B visa was suspended in April to handle huge rush of new petitions. Photo: AFP (AFP)Premium
Premium processing of H1B visa was suspended in April to handle huge rush of new petitions. Photo: AFP (AFP)

The Biden administration says it has found evidence that several dozen small technology companies have colluded to increase the chances that their prospective foreign hires will win a coveted H-1B visa for skilled foreign workers in this year’s lottery.

U.S. Citizenship and Immigration Services, the federal agency that awards H-1B visas, said it has found that a small number of companies are responsible for entering the same applicants into the lottery multiple times, with the alleged goal of artificially boosting their chances of winning a visa. The findings were laid out in a notice to employers viewed by The Wall Street Journal and set to be released Friday.

That practice, according to the agency, is in large part responsible for inflating demand for the visas to a record high this year, with 781,000 entries into the lottery for 85,000 visa slots.

Also read: Amid US H1B visa delay, THIS option is in high demand among Indians

Some of that increase in demand is organic, government data shows. About 350,000 applicants for H-1B visas submitted one entry into the lottery this year, compared with about 307,000 last year.

A much greater share of the increase, the data shows, can be attributed to applicants whose names were submitted by multiple companies. A large proportion of the duplicate entries, the immigration agency says, were submitted by a handful of the same companies. Some 96,000 people submitted multiple visa entries, for a total of about 408,000 entries.

Also read: USCIS raises concern over H-1B visas ‘abuse’, launches ‘extensive fraud investigations’

Though it isn’t technically illegal for a foreign worker to have multiple companies submit visa applications on their behalf, companies submitting applications must attest that they have a real job for the employee in question if they win a visa. If companies that win a visa then quickly contract an employee out to third parties, or lay off an employee on the visa so he or she can switch companies, that could potentially amount to fraud.

The government declined to name the companies in question, citing their status of being under investigation. People familiar with the situation said they are small companies in the tech and information-technology sectors that aren’t household names, some of which were potentially set up with the express purpose of submitting duplicate visa lottery entries.

The companies have been referred to federal law-enforcement agencies for potential criminal prosecution, a USCIS official said. Though some of the duplicate entries might have been picked in the lottery, which the government ran late last month, officials hope to disqualify visa applicants if they committed fraud to boost their chances. If enough of those applications are rejected, the official said, it is possible that the government will run a second lottery to hit the congressionally mandated 85,000 visa cap.

Since its creation in 1990, the H-1B visa has served as the primary way companies can hire foreign employees with college degrees, particularly international students educated in the U.S. Though it is a temporary visa, it is one of the few, and for international students, often the only, visa that allows foreign employees to eventually become U.S. permanent residents and citizens.

In recent years, demand for the visa has far outstripped supply. About 478,000 people competed for visas last year, a record at the time.

Interest in the visas has stayed strong even despite historic layoffs in the tech sector, in which numerous companies that are heavy users of the H-1B program recently shed tens of thousands of jobs. The companies have said the applicants they are looking to sponsor aren’t replacements for laid-off employees, but rather primarily existing employees whose student visas are about to expire and need an H-1B to continue working.

The alleged abuse of the H-1B visa system is a direct outgrowth of a recent change, adopted by the Trump administration and kept by President Biden, to how H-1B visas are awarded. Before 2020, to enter the lottery, companies needed to submit voluminous applications and pay thousands of dollars in fees attesting to the jobs they had on offer and how the employee qualified.

Beginning in 2020, prospective applicants for visas could simply submit their names to a new registration system and pay a $10 fee. If selected for a slot, they would then pay all the associated visa fees to have an application looked at in full.

The updated system was intended to cut down on the amount of money and work that companies and their employees must put in to enter the lottery.

Policy advocates and business groups warned that the new system lowered the barrier of entry so much that it would likely invite duplicate applications. That concern, government officials and some companies said, needed to be balanced with legitimate cases in which a sought-after foreign applicant has multiple legitimate job offers.

The government has proposed raising the registration fee to $215, a change that will likely be in effect by next year’s lottery, and the agency said it plans to write regulations to try to prevent further fraud.

Meanwhile, the inflated number of entries into the lottery means that just one in 10 entries has been picked.

Heather Prendergast, an immigration attorney in Cleveland who represents a hotel chain and several small companies, said she submitted 32 applications this year, and four were approved. That compares with nine applications in 30 being picked last year.

“This is not the sort of talent that we want to be losing," she said. “I can’t imagine this is the outcome they hoped for when they designed this system."

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