Small companies like BuildZoom, a start-up in San Francisco that helps people find construction contractors, are unable to compete for H-1B visas with large outsourcing companies that flood the system with requests. Credit Jason Henry for The New York Times
“The H-1B program is critical as a way for employers to fill skill gaps and for really talented people to come to the United States,” said Ronil Hira, a professor at Howard University who studies visa programs. “But the outsourcing companies are squeezing out legitimate users of the program,” he said. “The H-1Bs are actually pushing jobs offshore.”
Those firms have used the visas to bring their employees, mostly from India, for large contracts to take over work at American businesses. And as the share of H-1B visas obtained by outsourcing firms has grown, more Americans say they are being
put out of work, or are seeing their jobs moved overseas.
Of the 20 companies that received the most H-1B visas in 2014, 13 were global outsourcing operations, according to an analysis of federal records by Professor Hira. The top 20 companies took about 40 percent of the visas available — about 32,000 — while more than 10,000 other employers received far fewer visas each. And about half of the applications in 2014 were rejected entirely because the quota had been met.
Two of those applications came from Mark Merkelbach and his small engineering firm in Seattle. For water projects in China, he needed engineers and landscapers who speak Mandarin, and he could not find them in the local market. With his H-1B visas denied, Mr. Merkelbach had to move the jobs to Taiwan.
Another denial went to Atulya Pandey, an entrepreneur from Nepal who founded an Internet company in the United States and now can no longer work legally in this country for his own business.
The top companies receiving H-1B visas in recent years, Professor Hira found, include Tata Consultancy Services, known as TCS,
Infosys and Wipro, all outsourcing giants based in India; Cognizant, with headquarters in New Jersey; and Accenture, a global operation incorporated in Ireland.
“They have spent a lot of time and money creating a business model that fits within the rules so they can use the visas to offer cheaper labor,” said Bruce Morrison, a lawyer representing an association of American engineers.
For example, federal law requires global companies employing large numbers of H-1B workers to sign a declaration saying they will not displace Americans. But there is a loophole: An exemption cancels that requirement if employers pay H-1B workers at least $60,000 a year — significantly less than an experienced technology worker’s salary in many parts of the country.
Many of the outsourcing firms’ temporary workers earn $60,000 or just a little more, according to federal data compiled by Professor Hira.
the immigration visas offered by the United States, the H-1B program stands out for its peculiar rules. The annual quota includes 65,000 visas for foreign workers applying for the first time, while the remaining 20,000 are for foreign students graduating with advanced degrees from American universities. Each year the period for applications opens on April 1, and they are accepted first come first served.
Federal officials allow only one application for each foreign worker. But there is no limit on the number of visas a company can seek. A company with thousands of employees can submit many applications. By law, if applications quickly exceed the quota, officials use a computer-run lottery to select the visa recipients.
David Petersen, a co-founder of BuildZoom in San Francisco, said he had opened a public search when it was time to hire more engineers for his start-up. Credit Jason Henry for The New York Times
Recently, demand for the visas has soared; each year since 2013 the selection went to the lottery. This year, 233,000 applications were received in just seven days, and about two-thirds were denied because the quota was met.
Immigration officials do not acknowledge the outsourcing firms’ advantage. “The selection process is completely random,” said Shinichi Inouye, a spokesman for United States Citizenship and Immigration Services, the agency in charge of the visa program. “We cannot speculate as to why one company has more petitions selected in the cap.”
But Mr. Négri, who is now 27, wanted to understand it. He had been hired by David Petersen through an open job search after he posted his professional profile online. Mr. Petersen was looking for engineers to expand his start-up, BuildZoom, which helps people find construction contractors.
“I was just looking for great people,” said Mr. Petersen, in San Francisco. “And Théo had been building cool stuff since he was a 13-year-old.” Mr. Petersen said he had hired several local tech workers at the same time, and Mr. Négri, rather than displacing Americans, brought in more.
Then his visa was denied. So Mr. Négri
combed through public documents that employers file with the Department of Labor as a first step in an H-1B application. For the limited quota of visas, Mr. Négri discovered, the outsourcing companies had submitted far more applications than a small company like BuildZoom could manage or afford — each application costs up to $4,000.
Atulya Pandey, right, an entrepreneur from Nepal who founded an Internet company, Pagevamp, in the United States with Vincent Sanchez-Gomez, left, in New York in September. Mr. Pandey, who was denied an H-1B visa, had to set up shop back in Nepal to try to manage the growing company, which is based in New York. Credit Richard Perry/The New York Times