How Trump's latest H-1B visa suspension will impact hiring at tech companies
For the second time since April, the Trump administration has suspended new H-1B visa applications, as it tries to pressure tech and other companies to hire American workers while record unemployment continues to affect the nation due to the COVID-19 pandemic. But this time, instead of a two-month H-1B ban, no new H-1B visas will be granted at least through Dec. 31.
The H-1B visa program allows US companies to temporarily hire foreign workers for jobs where there aren't enough US workers who have the needed specialized skills to do the work. This typically includes workers in IT and a wide range of computer fields that require at least a bachelor's degree, according to the Department of US Citizenship and Immigration Services under the Department of Homeland Security. H-1B specialty occupations include fields such as science, engineering, IT, teaching, and accounting.
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Trump's order on June 22 said the ban extension is designed to protect US workers displaced from their jobs due to the pandemic. "American workers compete against foreign nationals for jobs in every sector of our economy, including against millions of aliens who enter the United States to perform temporary work," the order states.
"Temporary workers are often accompanied by their spouses and children, many of whom also compete against American workers. Under ordinary circumstances, properly administered temporary worker programs can provide benefits to the economy. But under the extraordinary circumstances of the economic contraction resulting from the COVID-19 outbreak, certain nonimmigrant visa programs authorizing such employment pose an unusual threat to the employment of American workers."
Critics of the government's move, particularly in the IT industry, however, don't agree with the administration's logic on the matter. Instead, they say the government is making it harder to fill needed roles inside the companies, which hurts innovation and stifles their operations.
The latest ban does not affect workers who are already in the US under H-1B visas. They can continue to do their jobs for their employers.
Joel Yanovich, an immigration attorney with the Murthy Law Firm in Owings Mills, MD, said the ban's extension will have a wide range of negative effects for employers who need workers with certain skills.
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For those companies, anyone they may have hoped to bring on in October is now not going to be arriving, which can throw their plans into disarray, he said. "Maybe they need to look at hiring other people because the one they wanted won't be available until at least Jan. 1, 2021."
For now, Yanovich said he is advising clients not to make changes to their plans for October H-1B hires because he expects legal challenges to the government's latest move. "If the reason you are going to make a change now is because you believe this person has a high likelihood they won't be able to come in on Oct. 1, there may be a court injunction that could prevent it from going into effect," he said. "Those legal challenges will say the president doesn't have the authority to do this."
At the same time, though, the ban extension order is essentially moot at this time because the COVID-19 pandemic has shut down government consulate offices around the globe, making the filing and processing of H-1B applications impossible right now, he added.
Employers can use this time to formulate their plans and look at their next steps, he said. "You can at least file the needed petitions right now, but that person can't be admitted with that status and come in now. There's still a benefit to applying right now, but you have to understand the person may not be able to come until January."
Yanovich said his clients tell him regularly that they use the H-1B program because they have trouble finding qualified US applicants for many high-tech skills they are seeking. "They can't find the talent here," he said. "They are willing to pay the employment expenses and stuff to get them into the US."
Another lawyer, Eleanor Pelta, an immigration attorney with Morgan Lewis in Washington, DC, called the latest move by the US government "incredibly disruptive" and said it impacts a wide range of her US and multinational business clients.
"Certainly, when you have US companies that are trying to ramp up and get back to normal and back to work, these are the kinds of challenges and hurdles they certainly don't need to be dealing with right now," said Pelta. "If you take the closings of the consulates, the COVID-19 restrictions and the travel bans together, it is incredibly challenging for a US or multinational company to plan with respect to the movement of their talent globally." The Trump administration's extended H-1B ban also disrupts plans by many companies to bring in new executives and managers from abroad to take over for people whose visas may be expiring or to head new initiatives, said Pelta. There are also effects from an administrative standpoint, she said, including how large companies must now delay or change their plans for projects, or how they have to find ways to help affected H-1B visa holders who might have a family emergency back home and need to leave for a bit, she said. Those workers, if they leave, may not be able to come back until next year. "We have families who are separated because of this," said Pelta. "For US employers who employ foreign workers, this is a major business disruption." Sang Shin, a labor and immigration attorney with Jackson Walker in Houston, said the latest H-1B ban has caused his law firm to tell clients that they should not travel internationally at all to protect their current status in the US, even where their H-1B or L-1 visa stamps may still be valid.
"Practically, it's turned into a 'stay-in-country' order for foreign nationals" due to the latest extension, said Shin.
"Everyone is talking about the ban itself, but more than that, it's important to point out that ever since President Trump has come into the office, the attack on tech companies big and small has manifested itself in unwarranted requests for additional evidence and denials," said Shin. "This has led to many tech companies filing lawsuits against the government - which they recently won. In fact, the US immigration authorities had to re-issue their internal policy memorandum after the lawsuit came down in favor of the companies." Worse, Shin said, Trump's latest H-1B ban extension also includes new language in Section 5 directing the departments of Labor and Homeland Security to create more regulations and take other actions to ensure that applicants coming here for tech jobs don't hurt the prospects of US workers. "From various sources, this appears to point to upcoming regulation changes to the H-1B and those applying for the green card under the EB-2 and EB-3 categories," said Shin. "A majority of EB-2/EB-3 green card processes and H-1Bs are filed for by the tech industry." One area where there are rumored changes is for IT consulting workers from abroad, he said. Those regulatory changes would likely mean wage level changes, additional filing fees for each H-1B filing, and changes to how specialty occupation and employer/employee relationships are defined, said Shin. "These regulations will likely have a longer-lasting and greater impact on the IT field," he said.
How the program is used
A wide range of tech companies use the H-1B program to bring in workers, including Microsoft, Google, Facebook, Apple, Amazon, IBM, Intel, and others. The top five US companies using the program are Cognizant Technology with 13,466 workers; Deloitte Consulting with 7,690 workers; Tata Consultancy with 7,620 workers; Amazon.com services with 7,337 workers; and Google with 6,054 workers, according to a May report by the Economic Policy Institute.
Brad Smith, Microsoft's president, wrote in a June 22 post on Twitter in reaction to Trump's order that "Now is not the time to cut our nation off from the world's talent or create uncertainty and anxiety. Immigrants play a vital role at our company and support our country's critical infrastructure. They are contributing to this country at a time when we need them most."
Sundar Pichai, Google's CEO, also voiced his opposition to the move. "Immigration has contributed immensely to America's economic success, making it a global leader in tech, and also Google the company it is today," wrote Pichai. "Disappointed by today's proclamation - we'll continue to stand with immigrants and work to expand opportunity for all."
As of Sept. 30, 2019, when the latest numbers were available, there were 583,420 non-immigrant workers in the US under the H-1B visa program, according to the U.S. Department of Homeland Security, Office of Policy and Strategy.
Meanwhile, statistics from the U.S. Bureau of Labor Statistics in the US Department of Labor project that there will be another 546,200 new jobs added in computer and IT occupations by 2028, a 12% increase from 2018. That rate is "much faster than the average for all occupations," the report stated.
"Demand for these workers will stem from greater emphasis on cloud computing, the collection and storage of big data, and information security. The median annual wage for computer and information technology occupations was $88,240 in May 2019, which was higher than the median annual wage for all occupations of $39,810."
Despite the continuing COVID-19 pandemic, some 35,000 net new IT jobs are expected to be created in the US in 2020, according to Janco Associates, an international management consulting firm. That will come after more than 116,900 IT pros lost their jobs due to the coronavirus shutdown in April and early May, according to Janco.