H-1B visa denials surge in 2018

Outsourcing firms hit hardest under Trump crackdown, new federal data shows

President Donald Trump’s promised crackdown on the H-1B visa had a dramatic impact last year, according to recently released federal data that shows immigration officials denied nearly 1 out of every 4 requests for new visas for skilled foreign workers.

That’s the highest denial rate for new H-1B visa applications in nearly 10 years and almost double the 13% rate in the prior fiscal year.

The data, which tracks H-1B visa approvals and denials since 2009, was released by the Trump administration last month as it seeks to carry out a pledge to reform the visa to better protect American workers under the president’s “Buy American and Hire American” executive order.

“It appears that the administration’s efforts are working,” said Sarah Pierce, an analyst at the Migration Policy Institute in Washington, D.C.

However, after comparing the 2018 denial rate for new visas with 2016, the last fiscal year under the administration of President Barack Obama, Pierce said the increase is not being “felt evenly” across firms that seek new visas.

Looking at the nation’s top 30 H-1B employers, Pierce’s analysis found that among so-called H-1B dependent companies, where at least 15% of the workforce has the visa, denials of new visas increased from about 4% in 2016 to 42% in 2018. The majority of those H-1B dependent companies were outsourcing, staffing and consulting companies, which traditionally receive huge numbers of new H-1B visas every year.

For example, outsourcer Cognizant Tech Solutions — the top recipient of new H-1B visas in 2017 — saw its denials skyrocket five times higher in 2018, to 61%. Other top outsourcers like Tata Consultancy, Tech Mahindra Americas and In

fosys also saw significant increases in their denial rates last year.

In contrast, top direct employers, like Facebook, Google and Microsoft, aren’t having the same experience, the data shows. The three companies had denial rates of 1% to 2% for new H-1B visas in fiscal 2018 — roughly the same rate as 2017.

Tech giants rely heavily on the H-1B, which is intended for jobs requiring specialized skills, and have pushed for an expansion of the annual 85,000 cap on new visas. But critics point to reported abuses by outsourcers and argue that companies, including major tech firms

that hire contract employees, use the visa to supplant American workers with cheaper foreign labor.

As part of its effort to put more scrutiny on H-1B visa applications, a U.S. Citizenship and Immigration Services spokeswoman said the agency has “strengthened fraud detection and prevention efforts” and in 2017 created a new program for targeted inspection visits to H-1B employers.

While the agency did not detail its reasons for denying visa requests, it did recently list the reasons it demands more information for H-1B applications deemed deficient. At the top of the list are failure to establish that an occupation meets the visa requirements, failure to show that a company and visa candidate have a valid employment relationship, and failure to demonstrate that work is available for the term of the visa. Those deficiencies often lead to denials: The rate of approvals for applications subject to demands for more evidence dropped to 62% in 2018 from 74% in 2017 and 79% in 2016, according to agency data.

Despite the increases in denial rates among outsourcers, Howard University professor Ron Hira, who studies the H-1B and immigration issues, said the data suggests the government hasn’t completely eliminated their dominance of the H-1B program. Outsourcing companies remain among the top H-1B recipients.

“The Trump administration has taken some positive steps to clean up the program,” Hira said. “They should be taking much more significant steps. We haven’t had the major overhaul of the H-1B program that President Trump promised in his first 100 days.”

So far this year, India’s Tata has received almost 1,200 new H-1B visas, the most of any company. However, USCIS has not yet completed its processing of visa applications this year.

The federal data shows that the total number of new H-1B visas approved last year declined almost 9% from the preceding year, to 87,900. Although there is an annual cap on H-1Bs, it does not include exempt employers, such as universities and research nonprofits.

The number of H-1B extensions also decreased last year to about 247,100. Extensions rose significantly after 2015 in part because of a new requirement that H-1B employers apply for a continuing visa whenever an employee changed worksites. Denial rates for continuing visas also spiked last year to their highest level in nearly 10 years. However, there were still far more H-1B extensions approved last year than in 2009.

Pierce said that increase was likely driven by two other factors in addition to the 2015 rule change: approval of shorter visas, which require more frequent extension applications, and a green card backlog that keeps some H-1B visa holders renewing for years.

In addition to visa totals, denials and approvals, the new data contains information about whether each application for a new H-1B visa or an extension received an initial approval or denial. Applications for which a decision is pending are not included. Neither is information about cases in which an applicant appealed a denial — a rare occurrence, Pierce said.