H-1B Visas: 6 Most Misunderstood Facts - InformationWeek

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IT Leadership // Team Building & Staffing
08:06 AM

H-1B Visas: 6 Most Misunderstood Facts

The H-1B visa program has cooked up a hot stew of myths and misconceptions. Legal experts break down the facts on salaries, timing, and more.

It's just a couple of letters, one number and a hyphen. But say "H-1B" in IT circles and you're likely to get reactions from all over the map.

H-1B visas are issued by U.S. Citizenship and Immigration Services (USCIS) to foreign workers for "specialty occupations." They're commonly used by companies to fill in-demand technology jobs, though the visa isn't limited to IT professionals. Because immigration -- not to mention economic policy, the unemployment rate, and discussions of an IT skills shortage -- is a naturally contentious topic, H-1B visas are sometimes misunderstood by employers and employees alike.

We asked Ronald Rose, a partner with the law firm Rose Carson Kaplan Choi & White, and James Richards, CEO of Teleborder, to help us debunk some of the common myths surrounding H-1Bs. Rose's areas of specialty include immigration and technology law. Richards's firm makes cloud software that automates much of the paperwork and bureaucracy involved for employers that hire foreign workers. In separate interviews, they cleared up some common misconceptions about the H-1B process. Note that what follows applies to new H-1B applications, not renewals of existing visas.

Myth 1: You can apply for new H-1B visas at any time.

Reality: The window for new applications opens only once a year, on April 1. The window closes as soon as the cap for that year -- currently set at 65,000 visas, with an additional 20,000 reserved for people with advanced degrees -- is met. Once the window closes, that's it for the year -- USCIS won't accept any more new applications until the following April. Successful applicants receive their visas on Oct. 1 of the same calendar year, which is the start of the new federal fiscal year.

Takeaway: H-1B visas aren't often a good solution for immediate, short-term hiring needs. You need to plan ahead -- and be aware that even successful applications don't kick in for another six months.

[ Is there really an IT talent shortage? Read IT Talent Shortage Or Purple Squirrel Hunt? ]

Myth 2: H-1B applications remain static.

Reality: The volume of applications tends to reflect the overall US economy and job market. In 2013, the April application period lasted just five days, marking the first time since 2008 that the window closed in less than a week. USCIS received 124,000 applications for new H-1B visas for fiscal year 2014; visas were then granted based on a random lottery. Applications were lower in the years immediately following the 2008 financial crisis, as payrolls shrank and unemployment rose. In 2012, by comparison, the window didn't close until June 11.

"Right now, we're experiencing a boom in [the technology sector], and so there has been a corresponding boom in H-1B applications," Richards said.

Takeaway: The application process isn't for the meek. You need to have your paperwork ready to submit immediately on April 1 or risk missing the window altogether. "[That] really means starting the process by February," Richards said.

Myth 3: The application is the only the hurdle you need to clear.

Reality: Once the visa is issued, the real work begins for organizations with H-1B workers on their payroll. "A visa is just the start of an ongoing relationship that you have with your worker," Richards said, adding that visas come with considerable compliance requirements.

Richards and Rose both said that audits of businesses that employ foreign workers are on the rise. Both UCSIS and the Department of Labor are empowered to conduct such audits. "They can come knock on your door and ask to see all of your compliance files related to your H-1B workforce," Richards said. "If they don't exist, you're going to be hit with heavy, heavy sanctions."

According to Richards, a common misstep made by H-1B employers, especially smaller ones, is that they add the employee to payroll too soon or too late. Start them too late and "it looks like you're underpaying them, which is a [significant problem]," Richards said. "If you start someone on payroll before their visa starts, that's even worse -- because that means that you're employing someone who is not authorized to work in the United States."

Takeaway: Understand what you're getting into. Synchronize payroll with visa dates and other terms. Stay organized. Handle paperwork as if you'd welcome a government audit, not as if you're simply trying to avoid one -- or, worse, as if you assume it will never happen to you.

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User Rank: Apprentice
11/27/2013 | 2:34:12 PM
Re: H-1B Myths
"Myth 6: H-1B visas replace American workers with cheap foreign labor."

That is ABSOLUTELY NOT A MYTH.  In fact, the outsourcing industry has even reporting in their financial briefs that H-1bs are paid 30% below U.S. market rates, therefore a 30% increase in costs will be associated with hiring local workers.  There are tons of loopholes in the prevailing wage. 

FACT: The H-1b outsourcing visa is used to displace U.S. workers with low cost guest workers.
User Rank: Strategist
11/24/2013 | 12:54:53 PM
Re: It is about Cheap, Indentured labor and practically nothing else.
Given that the Outsourcing companies, are using our Visa programs to skirt the real U.S. labor market.

Using uncounted numbers of B-1 visas to, illegally, bring in workers.  To, illegally, avoid having to pay U.S. payroll taxes, or even the U.S. minimum wage.

And using around 40,000 H-1b visas each year.  And with this number, being as large as it is, realizing that if Outsourcing companies were barred from using our H-1b visa program, as they should be, we wouldn't have seen a year where ever ran out of H-1b visas.

You have to realize something profound.

We wouldn't even be having this conversation, except for the fact that H-1b allows Outsourcing companies to bring in cheap, compliant labor.  

So it is, all the talk, everything, about Cheap, Indentured labor, nothing more.

Without H-1b, the immense job destroying power of the Outsourcing companies would be gone.  No country on this Earth would be so moronic, except for the bought off U.S. Congress, and allow such an immense job destroying government program to even exist.

User Rank: Strategist
11/24/2013 | 12:41:01 PM
It is about Cheap, Indentured labor and practically nothing else.
Most H-1b visa are used by Offshore Outsourcing companies.

The Offshore outsourcing companies use ~40,000 H-1b visas a year, but sponsor only a few people for Green cards.  Because the H-1b visa pins the worker down.  This allows companies to pay 25%-50% less in worker compensation, compared to the real free market for labor in the United States.  You know the market that's based upon Capitalism and not the artificial one created by the U.S. beaurocrats that manage the U.S. visa programs.

And every country has an immigration policy, so there is no real free market for labor between countries.  Just like there is no "World Citizen".  Further people can be equated with good in any free trade negociation, doing so denegrates humans to the level of goods, and that is the start of slavery.  People need more than storage (slums are unacceptable), therefore immigration must be planned.

The reality is that even H-1b wages are not cheap enough.  Companies regularly and illegally use the B-1 visa to skirt even the U.S. minimum wage requirements.  The settlement of the InfoSys case, for the largest fine in U.S. visa history, clearly shows this.

And InfoSys (and the other Visa outsourcers) problems are not over.  Because they also used our visa system to avoid even having to pay U.S. payroll taxes.

The real Myths about the H-1B visa program are:

Myth #1 - It isn't about cheap, indentured labor

InfoSys, case in point, all public information, clearly shows that it is about cheap, indentured labor, and practically nothing else.

User Rank: Apprentice
11/21/2013 | 5:26:19 PM
The fact is that the H-1B visa IS FOR CHEAP LABOR
In 2011, the GAO completed a study and determined that not only are H-1B visa recipients NOT "highly skilled," 94% of H-1B visa recipients fail to even reach a much lower standard of being "Fully Competent."

The 2011 GAO study concluded that a mere 6% of H-1B visa recipients are "Fully Competent" with 54% of H-1B visa recipients being "Entry Level" workers.  Tragically many disenfranchised US STEM workers, as their last official duty of being an employed US STEM worker, was forced to train their foreign replacement in order to receive a severance package.

The foreign replacement workers are in the country on work visas like the H-1B visa and the other work visas mentioned in this story that are created by elected officials in the the White House and Congress for their corporate campaign contributors that their corporate campaign contributors use to replace US STEM workers with workers from low cost labor centers, primarily India and Communist China, for the purpose of 1) reducing labor costs domestically and 2) moving US technology, US industry, and US jobs to the same low cost labor centers, primarily India and Communist China.
User Rank: Apprentice
11/21/2013 | 3:11:33 PM
Re: H-1B Myths
Regarding Myth 5: You must first prove that (you) can't find a qualified American worker. Originally the H-1B Visa program did require employers to prove that there were no Americans available to do the job, but that is no longer the case.  I remember in the late 80's and early 90's seeing help wanted ads in the newspaper (yes the newspaper, this was how jobs were adverised back then) that were exceptionally detailed and specific as to the job requirements.  These were ads that were required to be placed by employers in order to prove that there were no Americans available to do the job.

Employers quickly learned to get around the requirement by tailoring the job requirement to fit the H1B visa candidate.  I experienced this with my own job as a programming manager at a small company.  One employee at the company was finishing up a placement at a major computer hardware and software company.  Unbeknownest to me, he needed my job to stay in the country - his Visa was up for renewal.  I had been injured in an auto accident and I was in critical condition in the hospital.  My employer took the opportunity to advertise my position under the H-1B visa program.  The ads dscribed my job, but with a few changes that most programmers would not have. The H-1B candidate did have these requirements, but they were not real requirements of the job.  For example, "applicant must be a CPA."

Months later when I learned of this sham, I contacted the US Department of Labor and explained what had happened.  They could not have been less interested.  They just made comments like, "Employers fudge their requirements all the time."  Sometime in the 90's, the "no American qualified to do the job" requirement was dropped.

Myth 6: H-1B visas replace American workers with cheap foreign labor. This is not entirely a myth.  Yes, employers are required to pay the prevailing wage, but Rose's comment that the rate "is often based on the Department of Labor's wage database" is a smokescreen.  The truth is the employer is allowed to choose the salary survey.  Employers often use surveys that are written to favor employers. 

If an employer lays off a H-1B worker, it is a common misconception that they have to find a new job or leave the country within ten days.  Surprisingly, there is no regulation addressing how long a H-1B worker has to find a new job.  The playing field, however, is not entirely level. H-1B visa workers are not eligible for unemployment.  This would have the affect of having the H-1B visa worker more dedicated to his or her employer, because they would not receive any benefits after their position was terminated.

The combination of less than competitive wages combined with not having to pay unemployment, can make an H-1B worker a more attractive option than a well qualified US citizen.
User Rank: Apprentice
11/21/2013 | 9:03:42 AM
Re: Even IBM Posts Discriminatory Ads
"The vast, vast majority of Americans believe incorrectly that employers must seek local talent first before recruiting foreign nationals for top dollar, white-collar jobs."

I think some of it is just wishful thinking and the old tryign to support the locals first, rather than a firm belief that has to be the case
User Rank: Apprentice
11/20/2013 | 12:56:19 PM
Not really a myth for every company
This article is very informative for those companies that are trying to apply for H1-B visas. However, for most part the companies (that are not in software development) are no longer interested in applying H1-B visas for their internal IT needs. Either they have outsourced IT itself or getting IT resources on short term basis from staffing firms. If you look at the major users of H1-B for IT purposes, it is IT service providers, Software companies and staffing firms. Furtheremore, it should be noted that H1-B application is a big issue only if a person is getting the H1-B for first time. If a company wants to apply H1-B for a person who already has H1-B from another employer, then it is relatively easy. There are no quotas, no time limitations in this case.


User Rank: Apprentice
11/20/2013 | 10:01:40 AM
Even IBM Posts Discriminatory Ads
The vast, vast majority of Americans believe incorrectly that employers must seek local talent first before recruiting foreign nationals for top dollar, white-collar jobs.  This reporter has gotten this mis-understood point right.

Even before the H1-b law was passed (1989), the tech industry was refusing to follow EEO laws, unlike other industries.  Now, discrimination is so brazen the Department of Justice caught IBM red-handed, posting ads for H1-bs and foreign students.  IBM's hiring is now being monitored by the DOJ for the next 2 years.

A request for a class-action suit against Infosys for national origin discrimination has just been filed. It alleges that Americans were denied employment, forced to train their foreign replacements, and mistreated because they weren't South Asian. This national origin discrimination lawsuit is ground-breaking in the tech industry but not in other industries.

Manpower is recruiting abroad now for jobs that don't start until Oct. 2014 to Mar. 2015. You read that right--next year and the year after that. It is important to stress that using visa programs is a choice by a corporation.  Since this choice must be made at least 9-15 months before the job actually starts, it is likely that recruiting abroad first--without giving Americans a shot at these jobs--is a prohibited act under EEO laws and strongly indicates pre-meditation.

So a follow-up article would be instructive.  Companies MUST follow EEO laws to fill job openings on US soil. It covers ALL Americans and green card holders. Using visa programs is optional.

Donna Conroy, Director
Bright Future Jobs
User Rank: Author
11/20/2013 | 8:39:50 AM
H-1B Myths
I think #5 may be the least understood point in the complicated discussion around H-1B. Do people in the trenches agree with how this expert explained it? Does it mesh with what you have experienced?
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