Since the massive waves of layoffs in the technology industry began towards the end of 2022, many immigrant workers have been scrambling to find new employment within the 60-day window allowed by the US under the terms of the non-immigrant H1-B visa. Sixty days is not much time, even in robust hiring times, let alone against the rushing tide of recent layoffs that have hit the technology, financial, and professional service industries.
This scenario (which is very real for so many) is difficult for H-1B visa holders who have lost their jobs. The prospect of not finding suitable employment in the 60-day window means they will have to leave the country. Imagine if you’ve been working for Facebook for the last 6+ years and are waiting for your green card. You own a house and have settled in the US, and everything seems okay, but then you get laid off overnight, and your world is in turmoil.
That is a nightmare scenario. However, these layoffs provide smaller employers with an opportunity. An individual foreign worker cannot simply apply for an H-1B visa to work at a private, for-profit company at any time. Each year there is a visa lottery that runs in March with a start date of October 1. But any workers who have been laid off have already been counted against the visa cap set by the US government. Unlike the nerve-wracking process of entering the lottery, with a 1 in 4 chance of being selected, employers seeking valuable and talented workers can transfer the laid-off worker’s H-1B to their company. The position, of course, must be appropriately professional. Still, for smaller employers who cannot compete with larger companies during cap season, this is an opportunity to hire the workers they have been seeking, which are not subject to cap restrictions since they were selected in previous years.
Demand outweighs supply. The H1-B scheme is capped at 85,000 visas annually, which consists of a statutory cap of 65,000 H-1B visas (regular cap), with an additional 20,000 visas for foreign professionals with an advanced degree from a US academic institution (master’s cap). In recent years, the demand for H-1B visas has far exceeded the number of visas available in the annual quota:
- In Fiscal Year 2021, USCIS received 274,237 H-1B registrations
- In Fiscal Year 2022, USCIS received 308,613 H-1B registrations
- In Fiscal Year 2023, USCIS received 483,927 H-1B registrations
Created in 1990, the H1-B work visa has been a critical path for tech companies and startups to hire highly skilled workers (one of the main criteria for applicants) from outside the United States to fill specialty roles and engineering positions. Technology companies depend on it to hire tens of thousands of employees each year from other countries. Some reports estimate that more than 70% of tech workers in Silicon Valley were born outside the US. However, tech layoffs are not the bellwether of the entire labor market. Analysts note that in contrast to larger industries that are still hiring, technology companies only account for 2% of all employment in the nation.
For people outside the US wishing to land a job here, it has typically been a reliable way to gain employment and start on the journey to green card status or citizenship. It is also a natural fit for international students who have been here on an F-1 visa, who are then eligible for one year of job-related training. Those former students are eager for an employer to enter them in the lottery, and employers also enjoy the benefit of not needing to go through expensive and extensive recruitment.
Despite recent layoffs, recruitment during and after the pandemic has been challenging for many employers, and H-1B visa holders are attractive prospects. Sponsorship can be mutually beneficial. The employer needs a qualified and dedicated worker, and the employee requires sponsorship. Because of the nature of H-1B, finding another job can sometimes be difficult because the visa requires that the applicant have specialist knowledge. In addition, there are costs associated where there would be none if the candidate were a US worker. The employer also must meet the prevailing wage. Of course, the upside is that in the financial and tech industries, H-1 B-type positions often surpass the Department of Labor’s prevailing wage.
For the most part, specialized work visas for foreigners are intended to be temporary. For example, a foreign worker with an H-1B visa can stay in the US for a maximum of six years, which can be extended only if the employer sponsors the employee for legal permanent residency or a green card. The H-1B visa and status are initially valid for three years and can be extended for another three. After the maximum stay, the H-1B visa holder must either leave the US or obtain a different immigration status.
According to a recent Bloomberg article, a company spokesperson said that Google is pausing its filing of new labor certifications, which is the first step of the three steps to procure a green card—known as PERM applications—to ensure compliance with US Labor Department regulations. The company, however, will continue to pursue applications already filed that are still pending at the DOL.
But the pause in applications, combined with growing processing backlogs at DOL, is adding to the anxieties of workers who survived a layoff that put many fellow temporary visa holders on a timeline for finding new employer sponsors to remain in the country.
In 2019, 1.6 million people in the US held temporary worker visas, according to the Department of Homeland Security’s most recent estimates. That number includes the spouses and children of the temporary workers, who may or may not be able to work themselves, depending on the type of visa. No data was available for 2020 and 2021.
According to a recent statement by the US Citizenship and Immigration Services, they continually monitor the labor market and economy when exploring procedural, policy, and regulatory options to address related challenges immigrant communities face. And they remain committed to breaking down barriers in the immigration system. But any reforms, if they happen, would come too late for many workers who have lost their jobs.
Our Take
Despite the current climate of layoffs, the demand for H-1B visas will no doubt continue. H-1Bs are the only visas a purely domestic US company can use to sponsor a foreign worker from any country. Multinational companies benefit from L-1 or E visas, but H-1Bs are the great equalizer that will help US companies hire the best talent in the world and remain globally competitive. We predict that the demand for H-1Bs this lottery season will remain high as employers still wish to hire these workers, particularly in STEM occupations, as recruitment continues to be challenging.
Important dates to remember for 2023 are March 17th, the last day to register an H-1B lottery case for the fiscal year 2024. And just like any lottery, you have to be in it to win it, so for employers and employees alike, submit your applications before the last day.
If you need help or have questions, please drop us a line at +1 212 545 8022 or visit our website – www.rooney.law.
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