This April could be the last true harvest season for tech companies that pour resources into H-1B visas, hoping to reap new employees.
On Tuesday, President Donald Trump signed a “Buy American and Hire American” executive order at the headquarters of Snap-On, a manufacturer of high-end tools in Kenosha, Wis., a move that could restrict companies that recruit skilled foreign workers. The order, which aims to eliminate fraud and abuse in the H-1B visa program, follows a triad of guidelines issued late last month.
The H-1B — a non-immigrant visa that admits workers in specialty occupations to the U.S. — is responsible for bringing in many talents in computer-related industries, people who have spearheaded tech startups. Under the new executive order, the qualifications of those kinds of workers will be examined under a microscope.
In the past few weeks, the U.S. Citizenship and Immigration Services issued a policy memorandum, which forced sponsoring firms to more precisely describe an applicant’s specialty qualifications for a visa, as well as announcing new steps meant to fight fraud and abuse of the visa system such as a making targeted site visits. In addition, the Department of Justice issued a reminder to employers that it would not tolerate discrimination against U.S. workers.
The measures, which fall in line with Mr. Trump’s “America first” campaign, are aimed at information technology offshore outsourcing firms who purportedly hijack the H-1B visa system by abusing cheap labor and displacing American workers.
In reality, some argue that startups and universities could feel unintended consequences.
“The larger companies are the ones that are not going to be affected. The Googles and the Microsofts will be fine,” said Abbie Alejandro Rosario, an associate at JBM Legal, LLC, an immigration law firm located in Downtown.
Annually, the U.S. Citizenship and Immigration Services awards 65,000 visas through a lottery process, and exempts up to an additional 20,000 foreign nationals who hold master’s degrees or higher. In 2013, at least 460,000 workers entered the U.S. on an H-1B visa, according to the Economic Policy Institute, an independent think tank.
The visas are extremely competitive, as demand outweighs supply. Most years, the application cap is reached in mere days, making early April a nail-biter.
Many firms and universities rely on early-option processing to make the long application procedure more predictable. But with the new guidelines, early-option processing has been suspended for at least six months.
In 2015, the U.S. Department of Labor reported that 7,324 H-1B visas were granted to foreign workers in Pittsburgh — and many of those apply to professors or people who work for startup companies.
Risa Kumazawa, associate professor of economics at Duquesne University, went through the H-1B visa application process about 15 years ago.
Ms. Kumazawa, who holds a Ph.D. in economics from the University of Texas at Austin, said despite universities’ ability to hire unlimited, exempt workers, elimination of the expedited application processing is an enormous pitfall in the hiring process.
Universities typically pay an additional fee to speed up the process so they can be sure they’ve secured particular researchers or professors.
“Usually universities have strict hiring timing, and this makes it more unpredictable,” she said.
Without the security of a fast pass, university applicants will hang in limbo. If the government has not approved an applicant by a set hiring deadline, schools may have to pass on qualified individuals.
Citing a June 2001 report from the Partnership for a New American Economy, Ms. Kumazawa said over 40 percent of Fortune 500 companies were founded by immigrants or their children. A decreased predictability in university hiring could mean a loss in immigrant entrepreneurial prowess.
Pittsburgh-area startups use employees with the visas, and also could be hurt by suspension of the early-option processing.
“It’s critical for us to have strong international talent on our team — people who understand the challenges of learning a foreign language and the cultural differences of our users,” said Christine Raetsch, head of people at Duolingo, a language learning startup that heavily relies on foreign tech-savvy workers.
Duolingo, a spinoff from Carnegie Mellon University, serves more than 170 million users. The 72-employee startup is headed by Guatemalan co-founder Luis von Ahn, who earned his Ph.D. in computer science from CMU in 2005.
While these small companies may initially appear safeguarded from amended H-1B guidelines, that’s not always the case. Since the visa process operates on a lottery basis, Duolingo has far fewer chances to have applicants selected than a large firm.
Duolingo filed 29 labor condition applications with the U.S. Department of Labor between 2014 and 2016, according to Myvisajobs.com, a Los Angeles-based website that compiles employer applications to the federal government.
The labor condition applications are documents in the H-1B process used to gauge a firm’s compensation rate. The rate should be equal to or greater than the domestic “prevailing wage” in that occupation. That figure is set by the labor department to ensure that cheap, foreign labor is not pushing out American workers and to provide fair compensation to visa holders.
But the Department of Labor typically certifies more than three times the number of foreign work requests than the number of H-1B visas actually issued by U.S. Citizenship and Immigration Services, according to Bill Zhao, founder and CEO of Myvisajobs.com. So 29 labor condition applications may equate to just 10 H-1B-sponsored employees.
Compare that to the 43,794 applications that Indian IT giant Tata Consultancy Services filed between 2014 and 2016. The company, which offers consulting and digital solutions, recently donated $35 million to CMU for a new campus building focused on STEM innovation and hopes to bring its own employees into the Pittsburgh region.
Ms. Raetsch said Duolingo depends on H-1B visa employees, most of whom have roles in software engineering or research and development.
“If the tech industry is going to succeed in Pittsburgh, then tech companies here need to recruit the best talent from around the world,” Ms. Raetsch said.
Rajesh Gopinathan, CEO of Tata Consultancy Services, believes that it would be a loss if the H-1B visa acquisition process changed dramatically.
“Quite frankly, I think that view will prevail over time,” he said after Thursday’s groundbreaking ceremony for TCS Hall. “We have great trust in the U.S. system because it is fair and honest.”
Courtney Linder: clinder@post-gazette.com or 412-263-1707. Twitter: @LinderPG.
First Published: April 19, 2017, 4:00 a.m.
