The Trump administration on Wednesday announced plans to scrap the H-1B visa lottery and replace it with wage-based selection. But a prominent critic of the government’s immigration policies said the new rule would keep younger foreign workers out and deter international students from coming to the U.S.
Under the proposed rule, when initial H-1B visa applications subject to the annual 85,000 maximum surpass that cap — as has occurred since 2014 — visas would be awarded first to people in the highest of four wage categories, then to those in the third level, on down to the lowest level until all have been given out.
If fewer than 85,000 applications come in over an initial 14-day period, officials will continue accepting applications until the cap is reached, the U.S. Department of Homeland Security said in the 100-page proposed rule.
Under the current system, companies apply during the first week of April and applications are selected randomly. But that “does not serve the ends of the H-1B program or Congressional intent,” the proposed rule said. “The majority of H-1B cap-subject petitions have been filed for positions certified at the two lowest wage levels. This contradicts the dominant legislative purpose of the statute because the intent of the H-1B program is to help U.S. employers fill labor shortages in positions requiring highly skilled or highly educated workers.”
Typically, there are enough applications at the two highest wage levels to meet the 85,000 cap, said Ron Hira, a Howard University professor who studies the H-1B. Companies that tend to bring in H-1B workers at higher wage levels will benefit and those that bring them in at the lower levels will be forced to apply for visas at higher wage levels if they want to continue to obtain H-1B workers, Hira said.
His research with the left-leaning Economic Policy Institute found that in 2019, IT staffing companies such as Infosys, Deloitte and Cognizant had applied for large numbers of H-1B workers at the second-lowest wage levels, while Bay Area technology giants Google, Apple, Cisco and Oracle had a mix of higher and lower levels.
The Trump administration has cracked down on the H-1B program, dramatically increasing visa denials for staffing companies and outsourcers that contract out foreign workers. Critics have charged that these companies and their client firms use the H-1B to supplant U.S. workers, drive down wages and send work overseas. Major technology companies, who hire H-1B workers directly and also via staffing firms, push to expand the annual cap, arguing that the visa is necessary for securing the world’s top talent.
Hira called the proposal “a major step” toward improving the quality and skill levels of H-1B workers. “This is going to be good for the U.S. economy,” Hira said. “You’re going to get higher-skilled people.”
But that means early-career foreign workers will be less likely to obtain H-1Bs, with visas going to those with the most experience, said Stuart Anderson, executive director of the National Foundation for American Policy, which supports expanding the H-1B program’s 85,000 cap. “You’re cutting out the future great performers who companies have identified as being valuable but given their level of experience they don’t yet warrant the highest salary levels,” Anderson said. Foreign students whom U.S. universities and the U.S. economy depend upon would be deterred because their chances of working here after graduation would be reduced, he added.
Anderson believes the rule may exceed the administration’s authority. “They’re trying to do this unilaterally without engaging with Congress,” Anderson said. “If Congress had wanted to go from highest to lowest salary level they would have put that in the statute.”
The rule is subject to a 30-day public-comment period that will start once the proposal is published in the federal register. Hira said that would likely happen Thursday, and that the administration of President Donald Trump appears to be aiming to have the new rule replace next year’s H-1B lottery.
Earlier this month, the administration issued new rules that included boosting minimum wages for H-1B workers and imposing a one-year limit on placements of H-1B workers at third-party firms. The Bay Area Council, Stanford University and a host of educational and business groups are suing the administration over those rules. The ITServe Alliance, which represents American firms that place foreign tech workers at U.S. companies, is suing the government over the new required minimum wages.