New rules may bring 'false H-1B demand'

U.S. says prosed new H-1B visa process could lead to significant savings for businesses

WASHINGTON - The U.S. Citizenship and Immigration Services has proposed a new process for filing H-1B visa petitions that it says could help businesses save millions of dollars, particularly due to reduced legal fees.

But some critics warn that the government proposal would also create a new way to game the H-1B visa system.

The USCIS proposal aims to prevent a recurrence of what happened in 2009, when the government received 163,000 H-1B petitions for 85,000 slots allowed under the cap.

The result of that year's overload of H-1B applications: "Multiple truckloads of petitions were stacked on pallets on loading docks, in offices and in hallways," said the USCIS in its proposal.

Employers had to spend thousands of dollars in legal fees to file these petitions, without any guarantee that it would survive a lottery held to make the final selection.

The USCIS said its proposal aims to fix the problem.

Under the proposed rule, employers would initially register electronically by completing a relatively simple form in a process that should take about 30 minutes. The electronic registrations would be used by officials to create a first cut of full registrants. A waiting list would be created if the number of H-1B registrations exceeds the cap limit.

The USCIS says that the "main benefit that will result from this rule is that employers that want to hire an H-1B worker will be able to forgo the time, effort and expense associated with the preparation of a full H-1B petition" and completing U.S. Department of Labor paperwork, "until USCIS notifies the H-1B employer that space exists under the cap."

Some immigration attorneys believe the USCIS plan would create a new way to game the system of applying for H-1B visas.

Brian Halliday, a Cleveland-based immigration attorney, told the USCIS that the proposal seems "like a reasonable idea."

However, in a letter commenting on the proposal, he added that "the reality is that a small handful of U.S. employers -- mostly IT consulting companies -- use the vast majority of H-1B visa numbers each fiscal year. Their existence depends on getting as many H-1B visa numbers as possible each year, to the detriment of all other H-1B employers in the U.S."

Thus, Halliday asked, how will this electronic system "be safeguarded from potential abuses such as 'stuffing' the electronic registration system with huge numbers of speculative H-1B cases to hedge their bets for a number; or other unfair 'gaming' of the H-1B registration process system?"

In an interview, Halliday likened the registration system to music fans that "buy all the front row tickets to a rock concert."

The American Immigration Lawyers Association is warning that the system will create a rush of registrations and "generate false H-1B demand" by "creating a flood of unnecessary or unqualified registrations, potentially numbering in the thousands, that will ultimately be abandoned or denied."

It's expected that the USCIS will set up this electronic registration period each March, just prior to the April 1 start date for new fiscal year applications. The lawyers' association said the proposal presupposes that employers will have completed work on projecting staffing levels needed for the entire U.S. fiscal year.

The USCIS projects that the new rules would save employers some $24 million in preparation costs over the next ten years.

The USCIS ended the comment period on the proposal rule last month.

This USCIS proposal was borne out of the crush of the H-1B petitions the agency received in the pre-recession years. The pace of demand has slowed since then.

As of last week, the government has received 13,100 H-1B petitions toward its 65,000 cap, and 9,000 petitions toward the cap of 20,000 that's set aside for advanced degree holders. It's expected that the USCIS will reach the fiscal 2012 cap for the year, though it's still months away from doing so.

The relative fall-off in demand is blamed on a still weak economy, as well as a recent move by Congress to impose a new $2,000 fee for H-1B petitions on companies, mostly offshore firms, that rely heavily on holders of U.S. visas.

Offshore firms may be shifting to other visas, such as L-1, as well as improving the efficiency of their onshore operations, and/or boosting U.S. hiring, to reduce the need for visa holders. But some in Congress believe that the slowdown in H-1B visa requests will be short-lived.

Late last week, U.S. Rep. Lamar Smith, (R-Texas), chairman of the House Judiciary Committee, said at a press briefing that he would support doubling the H-1B cap.

He has not introduced a bill yet to do so, but has previously advocated an increase.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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