On April 1, U.S. Citizenship and Immigration Services (CIS) began accepting petitions for H-1B visas for 2012. H-1Bs are temporary employer-sponsored work visas for highly skilled workers in specialty occupations. They run for three years, are renewable once, and are capped at 65,000 with 20,000 additional spots available for foreigners who earned advanced degrees in science, technology, engineering, or mathematics from American universities.
Not long ago, the H-1B visa was raked over the coals in Congressional hearings. During prosperous times, such as before the current recession, the quota was reached on the first day that petitions were accepted. When the economy is weaker, the quota is reached within months rather than hours, yet it is filled nonetheless, with thousands of petitioners left out. If too many petitions are made the government allocates them via lottery.
Outrageous visa fees compound the inefficiency by diverting resources from wealth creating businesses and workers to government coffers. The minimum a small firm pays in government fees per H-1B is $2500. That can range up to $4475 for firms seeking expedited approval. Lawyer fees are an additional $1000 to $2000 per visa.
These high fees are taxes on the movement of highly skilled foreign workers. They punish hard working and highly skilled people and the American firms that seek to employ them. But as long as visas exist they will cost money to process. These fees should fall entirely on the petitioner, but they should only cover the fees and not be a deterrent to hiring as they currently are.
Other regulations also slam employers. Before a petition for an H-1B is even filed, firms must submit a Labor Condition Application to the Department of Labor. Employees are then assigned a number that will be used in the application process. For firms unfamiliar with the process, the delay caused by these bureaucratic hoops can mean the difference between successfully hiring a worker or not expanding this year.
A January 2011 Government Accountability Office (GAO) report found that small firms were hurt the most by H-1B restrictions. “Small firms were more likely to fill their positions with different candidates, which they said resulted in delays and sometimes economic losses, particularly for firms in rapidly changing technology field,” it said. Most large firms found other, more expensive, ways of hiring the workers they needed.
Firms petition for H-1Bs when they are expanding, so the quota, fees, and lottery amount to a huge tax on business expansion – the last thing a recovering economy needs.
The Obama administration and Congress have made the process even more difficult.
President Obama signed the Making Emergency Supplemental Appropriations for Border Security (P.L. 111-230) in August 2010. It placed an additional $2,000 fee on H-1B employers who employ 50 or more employees with more than 50 percent of its employees in the United States on H-1B or L visas. This law targets foreign information technology companies investing in the U.S.
Last year, the Obama administration announced 25,000 random workplace inspections of H-1B visa employers for this year—a fivefold increase over any previous year. New targeted fees and workplace disruptions are going to raise the cost of hiring skills for all American employers.
But there is a bright spot on the horizon. Representative Jeff Flake (R-Ariz.) introduced the Stopping Trained in America Ph.D.s from Leaving the Economy (STAPLE) Act (H.R. 399) in late January. If passed, it would allow foreign Ph.D. students who graduated from American universities in the sciences, technology, engineering, or mathematics to get an H-1B without worrying about a cap. Currently only 20,000 spots are left open for graduating foreigners. The STAPLE Act increases the cap by exempting a large number of petitioners from it.
All of these quotas, regulations, and fees are designed to prevent highly skilled and educated foreign workers from adding to our economy. Ninety-nine percent of all H-1B workers have at least a bachelors degree. The remaining 1% are on the high end of the fashion or modeling agency – two industries that don’t require advanced education.
Our restrictive immigration policy punishes American firms for seeking the skilled labor they require to expand. The STAPLE Act is a step in the right direction but much, like fee reduction, remains to be done. The U.S. economy has a lot of rebuilding to do after the economic destruction of recent years. We shouldn’t deny ourselves the highly skilled workers that will make that reconstitution possible.
Alex Nowrasteh is the immigration policy analyst at the Cato Institute's Center for Global Liberty and Prosperity.