Many H-1B workers get temporary jobs, study finds

Many employers sponsor H1-B holders to have them fill temporary posts, not to become full-time residents of the U.S., according to a study released last week by the Economic Policy Institute, a Washington D.C. -based nonprofit think tank.

The different ways companies use H-1B visas can be stark, according to the study, which was authored by Ron Hira , an associate professor of public policy at the Rochester Institute of Technology and longtime critic of the H-1B visa program. ( Download a PDF of study here .)

For example, large offshore, India-based vendors mostly seek permanent residency for just a small percentage of their workers, while some U.S. firms, such as Microsoft Corp. and Qualcomm Inc., are more likely to begin the green card process for employees. "Rather than attracting the 'best and brightest' for permanent immigration, as many have claimed, the programs have increasingly been used for temporary labor mobility to transfer work overseas and to take advantage of cheaper guest-worker labor," wrote Hira.

The study was called misleading by a spokesman for Compete America, a coalition of vendors, universities and other sponsors of H-1B visa holders. Spokesman Eric Thomas in particular questioned the use of L-1 visa data in the study. The L-1 visa is used by multinational companies for intra-company transfers. "That's how the system was designed, and that's how it's working. Lumping different visa categories into one bucket is a clear attempt to skew the data," he said.

The study examines company-by company data and then separates it into H-1B and L-1 visa categories. An examination of the study finds that even if L-1 visa data is excluded, the pattern of visa use appears to remain the same.

For instance, Infosys Technologies Ltd. was top H-1B user in 2008 with 4,559 approved visas, but in the same year, the company applied for permanent residency for 237 workers.

The paper benchmarks visa data with what it terms an "immigration yield," or the ratio of permanent residency applications filed to H-1B petitions. In the case of Infosys, that ratio is 5%. The low percentage pattern is similar in L-1 visa usage.

Because H-1B workers can work in the U.S. for six years, the applications for permanent residency can be from any of those years.

An exception among the large offshore vendors in seeking permanent residency for employees is Cognizant Technology Solutions Corp., a U.S. based company with major overseas operations.

In 2008 Cognizant was approved for 467 H-1B visas and sought permanent residency for 332 that year, for a ratio of 71%. Cognizant received 1,839 L-1 visas, the second largest in 2008 after Tata Consultancy Services Ltd., which received 1,998 L-1 visas.

Cognizant applied for permanent residency for 342 of its L-1 workers. Tata didn't apply for permanent residency for any of its L-1 workers or H-1B workers in 2008.

Among the top IT vendors, Hira's study found that Microsoft was granted 1,037 H-1B visas in 2008 and had sought permanent residency for 703 H-1B holders that year, a ratio or yield of 68%. Intel received 351 H-1B visas that year, but applied for permanent residency for only two visa holders that year. A year earlier, though, Intel's permanent residence yield was 42% of the 369 H-1B visas it received.

And Google Inc. received approval for 207 H-1B visas in 2008, and sought permanent residency for 108 visa holders.

Meanwhile, Goldman Sachs & Co., was granted 211 H-1B visas in 2008 and sought permanent residency for 13.

Researchers can only estimate the numbers of H-1B and L-1 workers in the U.S. at any one time because of a lack of pertinent government data on visa usage. Thus it is difficult to determine the overall percentage of H-1B workers that actually receive permanent residency.

In the Economic Policy Institute study, H-1Bs accounted for 63% of the permanent residence applications in 2008, or 30,951 of 49,205, in 2008. However, Hira noted that those in the latest permanent residency database have gained H-1B employment any time between 2002 and 2008, making pool of H-1Bs eligible for the permanent residency approval process much higher than the number of H-1B visas approved in 2008.

Various estimates put the overall total of visa holders in the range of 600,000 H-1B workers, and 350,000 L-1 workers, according to Hira's new study.

An decade-old study compiled by Georgetown University estimated that about 50% of H-1B visa holders become permanent residents of the U.S. Hira believes the percentage has fallen, based on the numbers in his analysis.

Hira argues that visa rules put most of the power to control H1-B workers in the hands of employers. Visa workers can "switch jobs in very limited circumstances, and their employer can revoke the visa at any time by terminating their employment, forcing the worker out of status with immigration authorities. If employment is terminated, the worker must leave the country immediately," the study said.

Eleanor Pelta, first vice president of the American Immigration Lawyers Association, was critical of Hira's assessment on the role H-1B workers play in the workforce, and added that visa proponents are hoping that Congress reforms the current rules. Such reforms, expected in a comprehensive immigration bill, could make it easier for high skilled workers to get permanent residency.

Citing the multi-year backlog in Green Card applications, Pelta doesn't believe visa holders should come to the US. "and then wait 10 to 15 years for a Green Card, I think that is really bad for the economy."

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 , send e-mail to or subscribe to Patrick's RSS feed? .

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Copyright © 2010 IDG Communications, Inc.

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