A sweeping immigration reform bill was introduced to the Senate
in April, and legislators are poised to begin debate over one of
the most contentious issues in the country.
Besides the most important issue of illegal immigration, another
key provision of the bill is the expansion in the number of H1B
temporary work visas for workers with college degrees or in skilled
occupations from the current cap of 65,000 a year to 110,000.
As is true of illegal immigration, the issue of legal work
immigration is contentious, with many voices supporting the plan to
expand the number of H1B visas granted each year, and many others
Those who argue in favor of expansion typically say the US has a
shortage of American graduates with Science, Technology,
Engineering and Math (STEM) degrees. Foreign workers on H1B visas
are thus required to fill a shortfall in STEM job positions.
A recent landmark
study, for example, found that jobs in sectors that frequently hire
H1B employees go unfulfilled for a longer time than those in
non-STEM occupations, even after control factors like wage rates or
level of education and experience are removed from the equation.
As such, the H1B visa cap hurts the ability of American firms to
compete for top talent in the global pool, those in the
pro-expansion camp, like much of Silicon Valley, argue.
On the flip side, some argue that while the intentions of the H1B
visa program are good, the reality is a whole different story. A
report from February found that the largest employees of H1B
workers are actually Indian outsourcing firms like
), the majority of whose employees are located overseas.
"These outsourcing firms like Infosys, Wipro,
Tata Consultancy Services Limited
(NSE:TCS) and others -- Americans would be shocked to know that the
H1B visas are not going to
); they're going to these firms, largely in India, who are finding
workers, engineers, who will work at low wages in the US for three
years and pay a fee to Infosys or these companies," said Senator
Richard Durbin at a Congressional debate on the immigration bill in
April, neatly summarizing the chief problem many have against the
H1B visa program.
"I think that is an abuse of what we're trying to achieve here.
Most people would think, well, Microsoft
needs these folks, and they'd be shocked to know that most of the
H1B visas are not going to companies like yours; they're going to
these outsourcing companies," Durbin continued.
But while Durbin and others in his camp feel that the H1B visa
program hurts American workers, Meaghan Tuohey-Kay, a New
York-based immigration lawyer whose clients are mostly small- to
mid-sized manufacturing, engineering, and IT companies with under
30 employees, says that expanding the program is counterintuitively
better for job creation in America because it makes it easier for
small businesses to hire foreign talent.
Each year, the annual H1B cap of 65,000 is reset on Oct. 1, when
the fiscal year for the federal government starts, Tuohey-Kay
explains to Minyanville. Since the government allows you to apply
six months ahead for any H1B that you might need, applications can
be filed April 1 for a job that starts Oct 1.
For 2013, the H1B cap was reached in the first five days of April.
So by March, companies would have had to make a decision to hire
somebody and have him or her start work on Oct. 1 so as to get the
application in on time.
"That means that if a small company gets a big contract and has to
hire new people, they can't. They would have to wait till April
2014 to file an application and the person wouldn't be able to
start until Oct. 2014. A company is thus limited in their ability
to grow and hire new people because of the cap," says Tuohey-Kay.
A small H1B cap disproportionately hurts smaller firms because they
"don't have a lot of fat in terms of employees" compared to large
), Tuohey-Kay says.
Ray Schmitz, founder of LeadPlace, a real estate tech startup,
agrees that small companies are at a disadvantage in competing for
talent because of the foreign work visa cap.
"Big companies sponsor most of the H1B hires because smaller
companies seldom sponsor. Whether small firm managers think the
process is too expensive, or too slow -- which it is -- is beside
the point. Too many small companies are not hiring the best talent
they can, and this puts someone who needs a sponsor at a
disadvantage -- no matter how talented they are," Schmitz, who has
one foreign employee on a H1B visa on his payroll, says.
"If you can only work at a few very large companies, you are at a
disadvantage, because they have the greater bargaining power. The
big companies know this. Similarly, if you are an unemployed
American and trying to get a job at a big company, they will take
advantage of that, too."
Thus, Schmitz hopes that the H1B process can be made "faster,
cheaper and maybe even especially friendly for small new companies.
[That way,] it's harder for companies of any size be exploitative."