H-1B demand this year will be fast, furious

Proponents will call demand come April 1 evidence of need while opponents will emphasize offshore outsourcing is behind demand

WASHINGTON -- The federal government begins accepting new H-1B visa petitions today, with demand expected to be heavy. And the initial rush is going to be followed by much fury.

Industry proponents of the H-1B visa will argue -- at megaphone strength -- that high demand is evidence of both an improving economy and the need for skilled workers.

Opponents will counter that H-1B visa employees are displacing U.S. workers, and they will point in particular to H-1B visa demand by offshore outsourcing companies.

Immigration experts say visa demand this year will be high enough to cause the U.S. Citizenship and Immigration Service (CIS) to hold a lottery to decide who gets a visa. The last time this happened was in 2008.

This is how it works: The government will likely treat the first five days of April as essentially one day. If, at the end of this period, the number of applications exceeds the number of visas to be allotted under two caps -- a general 65,000-visa cap and a 20,000 limit on visas for holders of advanced degrees from U.S. universities -- the government will use a lottery to distribute the visas. In 2008, a total of 163,000 petitions were received for the visas allowed under the two caps.

The lottery will cause some to scream. In 2008, for example, Google complained loudly that 90 of its 300 H-1B applications were rejected in the lottery.

In the U.S. Senate, those working on a comprehensive immigration reform bill will likely turn the visa lottery into a marquee example of why reform is needed. Opponents are already making their case by pointing to recently released U.S. Department of Labor data.

H-1B opponents cite a wide range of problems with the visa. For one thing, they say use of the visa puts downward pressure on wages, since most visa holders are hired at entry level. They also argue that age discrimination can be a problem at companies that hire H-1B workers, because the visa holders are generally young. Concerns about offshore outsourcing also come into play in the H-1B debate, because IT service providers are increasingly relying on the visas. The visa has also emerged as a competitive issue for some domestic IT services companies.

The major users of H-1B visas are offshore outsourcing companies, not U.S. employers such as Google or even Microsoft, which is a big user. A Computerworld analysis of H-1B data from the CIS makes this clear, and that finding is further backed by the Labor Department data on Labor Condition Applications.

The IEEE-USA, which has been arguing for green cards instead of more H-1B visas, points to new Labor Department data that shows 10 organizations, all offshore outsourcing firms, applied for H-1B visas for 112,739 positions in the first quarter of the federal fiscal year, which began Oct. 1. That figure represents about 64% of the H-1B applications. The Labor Department requires employers to file Labor Condition Applications (LCA) for the jobs they would like to fill with H-1B visa holders. In the LCAs, employers must identify the regions in which the employees would be working and the wages they would be paid. The government requires employers to pay H-1B workers prevailing wages.

In a statement, IEEE-USA President Marc Apter said, "Proponents of an H-1B visa increase will bemoan the fact that the H-1B cap is already used up, but it was outsourcing companies -- businesses who use the visas to take American jobs -- who used nearly two-thirds of them."

The number of LCAs filed is typically higher than actual number of H-1B applications because companies can file more applications than they may end up using. This leads to some interesting results.

For example, the Department of Labor listed Syntel, a Troy, Mich.-based services provider, as the top H-1B employer because it had filed about 55,000 LCAs. But in fact Syntel employs only about 21,000 people globally. About 81% of the company's billable workforce is in India, according to its most recent annual report.

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