As a result, around 39,000 applicants will be forced to re-apply for the temporary worker visa next year.
The lottery system is used to randomly select petitions that will be awarded with H-1B visas. The selection process reverts to the lottery system when the immigration agency receives more petitions than it can accept.
A trade group that represents Yahoo, Google, Intel and other tech giants said the current immigration system punishes companies because they miss out on hiring top talent if their visa petitions aren't selected.
“Our country's current immigration policy has created a classic lose-lose situation for our economy," said Rey Ramsey, CEO of TechNet, in a statement. "Tens of thousands of talented graduates from all over the world have been 'capped out' of the opportunity to work in the U.S., while American employers are denied access to legions of bright and motivated candidates for employment. It would be difficult to imagine a less rational system."
The group argued that influx of H-1B petitions filed this year illustrates the need for Congress to increase the number of H-1B visas available to foreign workers.
"This will not only encourage these talented workers to remain, but it will help further alleviate some pressures on the H-1B system by allowing these workers to skip temporary visas altogether," Ramsey added.
The IEEE-USA, a professional organization that represents engineers and tech professionals in Washington, criticized the use of the lottery system by the immigration agency, which falls under the Homeland Security Department. A vocal critic of the H-1B program, the group argues that it's predominately used by outsourcing companies that seek to train foreign workers in the U.S. and later send them abroad to work.
"[The Homeland Security Department] should not risk America's economic recovery by distributing H-1B visas at random. Everyone knows the reason H-1Bs are oversubscribed is because of outsourcers -- all of the top 10 users of the H-1B are outsourcers, and 15 of the top 20," said Keith Grzelak, IEEE-USA vice president of government relations, in a statement. "[The department] should prioritize H-1B visas to companies that create and keep jobs in the United States, not those which take jobs from Americans and ship them overseas."
Instead, the group has argued that tech companies should focus solely on increasing the number of green cards available to talented foreign workers, which offers them a path to citizenship. A green card authorizes a person to live and work in the U.S. on a permanent basis. An H-1B visa only allows an immigrant to work in the U.S. temporarily and ties foreign workers to their employer.
The views of tech companies and the IEEE-USA have clashed as the Senate considers significantly expanding the annual cap for H-1B visas as part of its comprehensive bill aimed at overhauling the nation's immigration laws.
Earlier this year a bipartisan group of senators introduced a bill with a measure that would increase the H-1B visa cap to 115,000 from the current cap of 65,000. On the other hand, Sen. Charles Grassley (R-Iowa), a critic of H-1Bs, introduced a bill last month that is intended to cut down on instances of fraud and abuse within the H-1B visa program. It would include additional enforcement and oversight mechanisms to the visa program to ensure companies don't abuse it and outsource jobs to foreign countries.