Frontera Fund News Trump Watch

Trump Administration Scrutinizing H-1B Visas for Third-Party, High-Tech Employer Crackdown

Written by Carmen Cornejo

The Trump administration is highly scrutinizing legal immigrants’ visa applications and immigration processes, causing a lot of uncertainty and fear among professionals in the high-tech industry, who traditionally have been almost worry-free.

But these developments may be one of the few changes in immigration policy from the Trump administration that at some point needed to happen: the crackdown on the abuse of H-1B visas.

The United States Citizenship and Immigration Services (USCIS) announced that it has temporarily halted the premium processing of H-1B visa applications for the second time in two years.

The Trump administration’s decision comes less than two weeks before USCIS begins accepting applications for fiscal year 2019 (October 2018 to September 2019).

Premium processing allows the fast-tracking of visa applications from the typical three to six months, to 15 days, for an additional fee of $1,225.

USCIS is tightening the rules to prevent abuse of H-1B visas by third-party contractors. These actions are meant to scrutinize companies such as Tata Consultancy Services (TCS), Infosys, Wipro and others that hire highly qualified tech professionals from India to be placed in third-party companies.

This practice is called third-party placing, E-V-C (employer-vendor-client) or, colloquially, body shops. The employees hired by the above-mentioned companies provide no long-term benefit to the U.S. economy or local communities; nor is there a pathway to a green card/citizenship for them (unless the client company decides to sponsor the employee, which, in this model, rarely occurs).

Click here for a table that lists the top 100 H-1B visa sponsors and the salaries they pay.

In this employment arrangement, there is no legitimate employer-employee relationship. This hiring practice is not illegal, per se, but tends to undermine the working conditions of legitimate H-1B visa holders and even citizens in high-tech industries.

The practice, which brings cheaper, highly qualified labor for the client with significant commissions and revenue to the vendor, is criticized also for lowering the salaries of other high-tech workers.

In order to reduce the practice of third-party placing, USCIS is now requiring more documentation on the qualifications criteria, the contracts, the employment conditions, itineraries and other details from applicants.

The original intent of H-1B visas was to allow a U.S. employer to bring in a highly qualified foreign professional who is not taking job opportunities away from citizens and who is directly sponsored by a company to do the work as its employee. H-1B visas are capped each year, so businesses (and foreign employees) compete for the limited amount released every year.

Many times this legitimate employee-employer arrangement leads to a formal legalization petition from the employer and a pathway to a green card/citizenship for the H-1B visa holder.

Through the years, abuse of H-1B visas has accelerated, allowing “vendors” to snatch a good percentage of the H-1B visas.

In the past 25 years, neither the GOP nor the Democrats have put limits on these “body shops.”