How Outsourcing Companies Are Gaming the Visa System


H-1B visas are designed to bring foreign professionals with college degrees and specialized
skills to fill jobs when qualified Americans cannot be found. But in recent years, global
outsourcing companies have dominated the program, winning tens of thousands of visas
and squeezing out many American companies, including smaller start-ups.

Congress set a limit of 85,000 visas annually, and more than 10,000 companies applied in 2014. But just 20 companies received more than 32,000 visas, according to Ronil Hira, a professor at Howard University who studies visa programs and analyzed federal H-1B data. The top 20 included several large outsourcing firms that provided temporary workers for businesses like Disney and Toys “R” Us.United States Citizenship and Immigration Services approves the visas on a first-come-first-served basis, beginning each year on April 1. Federal officials allow only one application for each foreign worker, but companies can submit an unlimited number of applications for their employees, so global outsourcing giants can, and do, submit many requests.

The outsourcing companies dominate the visa

program by flooding the system with applications.

H-1B visas are granted by a computer-run lottery if the number of applications exceeds the annual quota in the first week, which has happened in recent years.To prepare an H-1B visa application, employers must first submit a public document, known as a labor condition application, to the Department of Labor. Companies can apply for more than one employee based on one labor condition application, and many outsourcing firms use one application to apply for 10 or more workers. The more labor condition applications a company gets approved, the more H-1B applications it can submit. Because H-1B visa applications are not public record, the labor condition applications are an indicator of how many applications a company intends to file.

With more applications, the number of visas
given to outsourcing companies has risen sharply.

Since 2011, as the American economy returned to growth, there has been a spike in the number of H-1B visas granted to outsourcing companies. Some companies are receiving at least four times as many visas as they did just a few years ago.

Many H-1B workers earn salaries below market rates.

Under federal rules, employers like TCS, Infosys and Wipro that have large numbers of H-1B workers in the United States are required to declare that they will not displace American workers. But the companies are exempt from that requirement if the H-1B workers are paid at least $60,000 a year. H-1B workers at outsourcing firms often receive wages at or slightly above $60,000, below what skilled American technology professionals tend to earn, so those firms can offer services to American companies at a lower cost, undercutting American workers.

The vast majority of H-1B workers are from India.

The top outsourcing firms primarily bring temporary workers from India. American companies like Microsoft, Google and Apple have drawn from a wider range of countries, including China and Canada, for their H-1B workers. But in 2014, 70 percent of the H-1B visas went to workers from India, according to the Department of Homeland Security.

How Outsourcing Companies Are Gaming the Visa System