In response to the “Buy American and Hire American” executive order, USCIS has been steadily tightening the H-1B visa program with the intent that U.S. firms will hire U.S. workers. However, the evidence that restrictions will result in more American workers being hired seems to be lacking. Employers argue that the H-1B visa program has allowed U.S. firms to remain competitive in an increasingly global economy. Unless the White House changes its approach to the program, the degree of difficulty for companies to hire highly-skilled foreign workers will likely continue, and the trend toward hiring workers in other countries instead, will continue.
Since President Donald Trump signed Executive Order 13788, titled “Buy American and Hire American,” on April 18, 2017, the administration has been steadily tightening legal avenues for highly-skilled foreign-born workers to be employed in the United States. The recent release of fiscal year 2019 U.S. Citizenship and Immigration Services data provides new insight to the extent the Trump administration’s policies are targeting the H-1B specialty occupation visa. As the 2020 H-1B cap season approaches, the FY2019 numbers raise questions over whether the increasing restrictions will persist.
On October 9, 2019, USCIS released its FY2019 H-1B data. The numbers reveal how changes in USCIS’s internal adjudication protocol over the last two years has resulted in a higher rate of denials and Requests for Evidence, or RFEs. In particular, the number of petitions that received an RFE and were subsequently approved has drastically fallen, and it has become increasingly difficult for individuals already holding an H-1B to renew their status.
In FY2015, USCIS received 368,148 H-1B petitions. Of the petitions received, 288,501 were initially approved, while 67,315 received an RFE. As shown in Figure 1, this amounted to an RFE rate of 22.3% in 2015. In FY2019, however, USCIS reported an RFE rate of 40.2%, approximately twice as high as the 2015 rate. In addition, as shown in Figure 2, the percentage of petitions that received an RFE and were subsequently approved has drastically decreased since 2015. Of the petitions that received an RFE in 2015, 83.2% of them were eventually approved, amounting to an overall approval rating of 95.7%. Of the petitions that received an RFE in 2019, only 65.4% of those petitions were subsequently approved. This amounted to an overall H-1B approval rate of 84.8% in FY2019.
In both figures, we see a significant change in the percentage of petitions that received an RFE and the percentage of petitions that received an RFE and were subsequently approved beginning in Q3 of FY2017, when the administration issued the Buy American and Hire American executive order. The resulting data shows a long-term correlation between the administration’s objectives set forth in the order, with an increase in the overall RFE rate and a decrease in the number of petitions that received an RFE that were then approved.
The increasing RFE rates depicted above is a result of USCIS having significantly raised the burden of proof for adjudicating an H-1B. Following a FOIA request submitted by the American Immigration Lawyers Association in 2017, USCIS recently released internal documentation outlining how they adjudicate H-1Bs, how the wage level of a job may impact a petition’s adjudication, and how USCIS determines whether a position qualifies as a “specialty occupation” pursuant to an individual’s educational background.
In a March 31, 2017, memo titled “Rescission of the December 22, 2000 ‘Guidance memo on H-1B computer-related positions’”, for instance, USCIS directs adjudicating officers to follow more restrictive analysis when reviewing an H-1B petition for a computer-related position. The memo instructed USCIS officers to adhere to stringent requirements on which educational degrees qualify for H-1Bs and stated that the burden of proof always fell to the petitioner to prove the individual was eligible for their renewal even in cases where an individual had a previously-approved H-1B. An October 2017 memo reaffirmed this adjudication policy, requiring that every H-1B case be reviewed without any deference, or weight, given to past approvals. This has contributed to the increased level of RFEs or denials issued to cases seeking to renew an existing H-1B petition over the past two years. In a July 2019 press release, USCIS announced it is “creating and carrying out these initiatives to protect the economic interests of U.S. workers and prevent fraud and abuse within the immigration system,” with the intent that U.S. firms will hire more U.S. workers.
The 2017 memos are just two examples of the administration’s actions to tighten the H-1B visa program. Additional USCIS email correspondence obtained from AILA’s FOIA request revealed the new policies set forth in the memos contradicted the historical practices and operations of USCIS’s regional service centers that adjudicate H-1Bs. In those emails, both the Vermont and California Service Centers expressed concerns the memo constituted a change in policy on whether entry-level computer programmers can be considered specialty occupations, and the Nebraska Service Center indicated it was “holding [its review] of thousands of cases” until they received the finalized training slides and deference guidance slides to implement the March 2017 rescission memo. The rescission memo seems to account for much of the increased number of RFEs being issued, as service centers have been directed to ask for additional evidence when they receive petitions for entry-level positions that may not necessarily require a bachelor’s degree.
From an analysis of USCIS’s FY2019 data and internal documentation, it is clear the administration’s “Buy American and Hire American” executive order is being successfully implemented. However, private companies are pushing back against the tightening restrictions. Between 2017 to 2019, Mother Jones, in partnership with Cornell Law School, documented approximately 100 lawsuits filed against USCIS regarding the H-1B petition process. This compares to only a handful of cases filed per year over the previous decade.
Corporate lawsuits are not the only arena where USCIS is facing pushback. While the White House is justifying restrictions to the H-1B process to protect U.S. workers, there is consensus among economists that high-skilled immigration boosts the American economy, and there is a lack of evidence that restricting H-1B workers will result in more U.S. workers being hired. In fact, USCIS’s approach to the H-1B program assumes that there is a large talent pool of specialized individuals that hold US citizenship or a green card to take the positions left vacant by H-1B visa holders.
A 2019 study examined firm-level data on H-1B visas and multinational firm activity and found that employment at company entities located outside of the United States rises when H-1B visas are restricted rather than an increase in the hiring of native-born workers in the United States. The research confirmed a direct link between H-1B visa restrictions and job-offshoring, which goes against the idea that fewer H-1B visas would lead companies to hire more U.S. workers. In fact, other studies find that highly-skilled immigrants do not take away jobs from native-born employees, but rather fill positions that would otherwise be left vacant.
A 2018 study found that the institution of the H-1B cap significantly reduced the employment of new H-1B workers in for-profit firms, while the employment of native-born workers did not change. The assumption that companies will hire U.S. workers to replace foreign workers sponsored on an H-1B is not borne out; instead, companies are still hiring these workers, but sending them to offices in Canada instead, where immigration policies are seen as less restrictive. Companies like MobSquad are actively recruiting highly-skilled immigrants who were unable to receive a U.S. visa and helping them obtain work authorization in Canada. In response to increasing restrictions on the program, advocates believe that the United States is closing the door to the highly-skilled immigrants the American economy needs to thrive.
On December 6, 2019, USCIS announced it will implement an electronic registration process for the FY2021 cap season. Beginning in 2020, employers filing H-1B cap subject petitions will be required to first electronically register and pay the $10 registration fee. USCIS maintains the system is designed to streamline processing, but employers are concerned that lower paperwork barriers to entry will overload the system with many more applications than in previous years. USCIS has not announced if the registration system will go into effect for the FY2020 season. As the FY2020 H-1B cap season approaches and will be the last year without the new registration system in place, we will continue to monitor the data to determine if these trends continue in the new year.