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An outsourcing-industry group has welcomed a Biden administration move to delay switching the controversial H-1B visa program from a lottery-based allocation to one based on wages.
The administration of President Joe Biden last week announced it would allow the H-1B allocation lottery to go ahead this year while it considers a rule imposed in former President Donald Trump’s last days that would see the visas — intended for jobs requiring specialized skills and heavily used in Silicon Valley — handed to companies paying the most.
“Prioritizing purely on wage levels has the potential to significantly damage some of the most innovative companies in the world along with many hospitals and health care providers, research facilities, universities and other petitioners,” India-based outsourcers association NASSCOM said in a statement. The group added that it would lobby the U.S. Department of Homeland Security on the matter.
The Trump administration’s wide-ranging crackdown on the H-1B targeted outsourcers, with a dramatic increase in visa denials and new restrictions.
Homeland Security, in announcing the rule would not take effect until the end of this year, said the delay would give the federal government “more time to develop, test, and implement the modifications to the H-1B registration system and selection process.”
The H-1B program has become a flashpoint in America’s immigration debate. Major tech firms push to expand the annual 85,000 cap on new visas, saying they need more visas to secure the world’s top talent, while critics point to abuses and argue that the H-1B is used to supplant U.S. workers, drive down wages and facilitate outsourcing.
Whether the Biden administration retains the Trump-era rule remains to be seen. Sean Randolph, a senior director for the Economic Institute at the Bay Area Council, which represents major Silicon Valley companies, said it was unclear whether the lottery would be scrapped or whether it might be retained with new wage mandates.
“You can have a lottery and still have certain minimum requirements for wages, rather than it being set on the highest wage comes in first,” Randolph said.
The council late last year won a lawsuit it filed along with Stanford University, the U.S. Chamber of Commerce, the National Association of Manufacturers and other groups against Trump administration rules including higher minimum pay for H-1B workers.
“They were set at such high levels as to be intended to discourage any use of the program,” Randolph said, adding that the council approves of the current wage requirements and would like to eliminate the annual H-1B cap.
A May report by the left-leaning Economic Policy Institute and Howard University professor Ron Hira, who studies the H-1B, concluded that outsourcers comprise half of the top 30 H-1B employers and “make heavy use of the H-1B program.” Major Silicon Valley technology firms “take advantage of program rules in order to legally pay many of their H-1B workers below the local median wage for the jobs they fill,” the report said.
The H-1B lottery favors outsourcing firms, which have typically flooded the program with applications and reaped large numbers of visas through the lottery, Hira said in an interview.
UC Davis computer science professor Norm Matloff, who also studies the H-1B, has concluded that major tech companies typically use the H-1B to hire foreign graduates of U.S. universities, and underpay relative to what a worker would receive as a “free agent.”
Hira noted that there has been broad support for changing the H-1B allocation system to a wage-based model. Homeland Security, overwhelmed in 2008 by a flood of H-1B applications, landed on random selection as the solution, Hira said. “There was no regulation. There was zero thought or debate,” Hira said.
The libertarian-rooted think tank Niskanen Center called the Trump administration rule to scrap the lottery “Trump’s one immigration reform that Biden should keep.” Niskanen immigration policy analyst Jeremy Neufeld argued that the lottery system “dictates that virtually all employers are equally likely to win, regardless of their petitions’ relative merit.”
The Trump administration crackdown on the H-1B led many skilled foreign workers to look to other countries because the U.S. was perceived as unwelcoming or even hostile, with steep odds against successful visa applications, the Bay Area Council’s Randolph said. Meanwhile, nations including Canada were aggressively courting tech workers and smoothing their way in, he noted. Any new allocation system for H-1B workers should be designed with that lesson in mind, he said.
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