GAO: Disproportionate share of H-1B visas going to India-based staffing firms

A disproportionate share of visas intended for U.S. firms to hire temporary, skilled workers have gone to staffing firms based in India, according to a report from the Government Accountability Office.

According to the report, employers' demand for workers holding H-1B visas exceeds the supply and is driven largely by the small number of applicants (less than 1 percent) who garner nearly 30 percent of the available visas.

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Many of the firms hiring more than 100 H-1B workers are staffing companies, which hire workers to place them at the worksites of other employers.

Ten of those staffing firms collectively were approved for more than 11,000 H-1B visas in fiscal 2009, or about six percent of the total approvals. Of those top 10 firms, six are based or have operations in India.

Almost half of all H-1B visa holders are from India, with the majority employed in mid-level information technology industry positions such as systems analysts or programmers.

"Although information on the total H-1B workforce is lacking, data on approved petitions show that, since 2000, most people that were approved to be H-1B workers were born in China or India, were hired for technology positions, and increasingly held advanced degrees," the report states.

Congress created the H-1B visa program in 1990 to allow U.S. firms to hire foreign workers for occupations where there is a shortage of qualified domestic workers. Workers are granted a visa for six years and allowed to apply for extensions should they change jobs or apply for permanent residency.

The number of visas is capped at 65,000 with an additional 20,000 set aside for workers holding a master's degree or higher from an American university. Applicants who are granted extensions are also not counted against the cap.

The technology industry has campaigned for Congress to raise that cap, which it reduced from 195,000 in 2004. House Oversight Chairman Darrell Issa (R-Calif.) also introduced a bill that would give graduates of U.S. universities the ability to apply for a green card by redirecting visas from the diversity lottery program.

Because several different agencies, including the departments of Labor and Homeland Security, administer the H-1B program, the GAO said it is impossible to know how many visa holders are currently in the U.S. The lack of centralized oversight may also have a detrimental effect on U.S. workers.

"Elements of the H-1B program that could serve as worker protections — such as the requirement to pay prevailing wages, the visa’s temporary status, and the cap itself — are weakened by several factors," the report states. "First, program oversight is fragmented and restricted."

Because of the uncertainty regarding the number of visa holders and the potential demand, the GAO said it is impossible to predict the cost or effects of raising the cap on the number of visas.

The GAO recommended Congress seriously consider the H-1B program, the qualifications of applicants, and the appropriate role of staffing companies while discussing immigration reform during the coming year.

Employers looking to hire an H-1B worker must notify other workers and ensure the new worker is paid at the same level as his or her colleagues without adversely affecting their working conditions.

The report notes many who are approved for the visa are already in the U.S. and have applied to stay permanently. Employers are supposed to take good-faith steps to hire a U.S. worker first, but are not required to prove they have done so.