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Despite H-1B lottery, offshore firms dominate visa use

Despite H-1B lottery, offshore firms dominate visa use

Offshore outsourcers with ties to India once again snapped up tens of thousands of skilled-worker visas.

Offshore outsourcing firms that do most of their work in India remain the largest users of the H-1B visa for computer-related jobs, seemingly unaffected by the odds of the visa lottery, according to new data.

With the exception of a few tech firms -- notably Microsoft, Google, Amazon and Oracle -- the top 25 H-1B-using firms are either based in India or are U.S. firms running large offshore operations.

These firms include Tata Consultancy Services, the leading H-1B user with 7,149 approved visa petitions for last year, and Infosys, which ranked third on the list at just over 4,000 approved visas. Both were major contractors at Southern California Edison, where IT employees were fired as work was shifted to contractors.

HCL, one of the contractors at Disney Parks and Resorts, was approved for just over 900 visas. IT employees at Edison and Disney complained of training their visa-holding replacements prior to losing their jobs. (Disney later said it was canceling its recent IT outsourcing plans).

The IT services firms in the top 25 H-1B using firms accounted for approximately 43% of the 76,272 H-1B approvals in new computer-related jobs only in the U.S. government's fiscal year 2014, which ran from Oct. 1, 2013 to Sept. 30, 2014.

This is the first time we have data broken down by job type, via a federal Freedom of Information Act request. These totals will likely be lower than H-1B totals reported in prior years when Computerworld did not have breakdowns by employment categories. Visa requests for employment changes (as opposed to new employment) are not included in these totals.

The U.S. has been distributing its annual 85,000 H-1B allotment via a lottery because of high demand. This system works against many small U.S. tech firms that make up the bulk of the visa applicants. They must compete against large-volume IT services firms that submit multiple H-1B visa applications to improve their odds of winning the lottery, according to immigration experts.

New computer-related employment last federal fiscal year represented almost 64%, or two out of every three, such visas issued. Other job categories included engineering, medicine, science, law and, yes, modeling. (While rumors persist this is a large use of the H-1B program, in fact there were only 38 visas approved for fashion model new employment last fiscal year).

Computerworld requested but did not receive information about how many of these approvals were not subject to the H-1B cap, as well as a breakdown of approvals by gender and data about wages.

The tally of top H-1B users includes Computerworld analyses to combine various iterations of company names; there were, for example, 64 different versions of Cognizant Technology Solutions, including Cognizant Tech Solns US Corp, Cognizant Technology Solns US Corp and so on. The analysis also combines a company's different divisions and business units -- IBM Corp and IBM India, among others.

The lottery may be creating an arms race of sorts. In the 2014 fiscal year, the U.S. received 124,000 H-1B visa petitions; in 2015, the number reached 172,000 and for the 2016 fiscal year (the lottery drawing that was held this past April), the U.S. received 233,000 visa petitions.

There may be 300,000 visa petitions or more next year, said former Rep. Bruce Morrison (D-Conn.), who was the author of the 1990 immigration legislation that created the H-1B visa. He sees what's going on as a form of "ballot-box stuffing."

"They are buying more tickets [H-1B visa applications] because the percentage of winning has gone down -- that's the way any lottery works," said Morrison. Applicants can do this under the law, which allows firms to apply for visas even for someone who is not an employee, he said.

Morrison, who has represented the IEEE, says one fix is to give firms that aren't H-1B dependent preference or first crack at a visa. H-1B dependent is a legal classification that applies to firms that have 15% or more of their workers on this temporary, non-immigrant visa. That's a change the White House could make through regulation, he said.

Another remedy is to give preference to those firms that are paying the highest salaries to the visa workers, said Morrison.

The use of the H-1B visa as an offshore vehicle was not foreseen when the law was adopted 25 years ago, said Morrison. But through the clever use of rules governing the visa, the H-1B has become "a system for displacing American workers," he said.

On the likelihood that a large number of firms submitted only one petition, Costa said that perhaps it makes sense "to allow each employer with an accepted petition to get at least one of their H-1B workers, before giving a second to any company, because companies like Infosys and Tata are likely benefiting from submitting thousands of petitions, which increases their chances of getting picked in the lottery, while smaller companies that just need one or two H-1B workers are losing out altogether," he said.

The data include those H-1B applicants approved between Oct. 1, 2013 and Sept. 30, 2014 for new employment in computer-related jobs only. This is the first time we have data broken down by job type, via a federal Freedom of Information Act request. These totals will likely be lower than H-1B totals reported in prior years when Computerworld just had overall totals for all employment categories.

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Tags outsourcingMicrosoftOracleGoogleservicesinfosysIT outsourcingTata Consultancy ServicesH-1B

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