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The low annual limit for H-1B petitions affecting US employers: Study

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According to a new report on skilled workers’ visas, the most sought-after by Indian IT professionals, the main obstacle that US employers face when attempting to recruit foreign talent is the low annual limit of 85,000 registrations for H-1B petitions.

Employing foreign workers in specialty occupations that require theoretical or technical expertise is made possible by the H-1B visa, which is a non-immigrant visa. It is essential for technology companies to hire tens of thousands of workers annually from nations like China and India.

According to the nonpartisan National Foundation for American Policy (NFAP) report titled “H1B Petitions and Denial Rates in FY 2022,” the vast majority of H-1B registrations were rejected due to the low annual limit on petitions.

Following the Trump administration’s losses in federal court during Donald Trump’s final year in office, H-1B denial rates have returned to low levels. According to the report, the low annual limit for H-1B petitions is currently the main obstacle employers face when attempting to recruit foreign-born talent.

H-1B petitions affecting US employers

The annual allocation of H-1B visas is limited to 85,000, with 20,000 reserved for US Employers/workers with advanced degrees from US institutions. Due to a lottery system for the remaining 65,000 visas, there is intense competition for H-1B visas.

Employers submitted over 483,000 H-1B registrations in April 2022, exceeding the annual limit of 85,000 H-1B petitions by almost 400,000, according to USCIS.

In specialized fields like technology, engineering, and medicine, skilled foreign workers can obtain H-1B visas and work and live in the United States for up to six years.

It makes it possible to obtain a Green Card or permanent residency after six years. The NFAP said in a statement on Thursday that temporary H-1B visas are important because they typically represent the only practical way for a high-skilled foreign national, such as an international student, to work long-term in the United States and have the chance to become an employment-based immigrant and a US citizen.

It stated that international students account for more than 70% of full-time electrical engineering and computer and information science graduates at US universities.

According to Stuart Anderson, executive director of NFAP, “companies in America still must deal with the low annual limit on H-1B petitions and employment-based green cards” despite the Trump administration’s end of restrictive immigration policies that made US companies less competitive in the global battle for talent.

“These and other policies make it difficult for many talented people to pursue their dreams in America and encourage employers to send work and people outside the United States.”

According to the findings of a 2022 NFAP study, the significance and contributions of immigrants to the US economy are demonstrated by the fact that 55% of America’s startup companies with a market capitalization of USD 1 billion or more have at least one immigrant founder.

In FY 2022, 2% of new H-1B petitions for initial employment were denied. It claimed that as a result of judges declaring many of the Trump administration’s H-1B-related actions unlawful, the rate of H-1B denials decreased during the final year of its term.

That necessitated a legal settlement as well as modifications to restrictive immigration policies. As a result, the denial rate for new H-1B petitions for initial employment fell to 4% in FY 2021, significantly lower than the denial rate of 24% in FY 2018.

The 85,000 annual limits on H-1B petitions for FY 2024 will likely be filled when the registration period opens in March 2023, despite prominent layoffs in the technology industry. According to the report, this is because the annual limit is low in comparison to the size of the US workforce and the demand for talent.

Only 0.5% of the approximately 165 million people who are employed in the United States are represented by the 85,000 brand-new H-1B petitions that are granted to businesses each year. Since the beginning of the fiscal year 2004, the supply of H-1B petitions has been exhausted each and every fiscal year.

Analysts and technology observers emphasize the importance of keeping layoffs at tech companies in perspective.

Fortune states, “Even with all of the layoffs that have been announced in recent weeks, the majority of tech companies are still vastly larger than they were three years ago.”

According to the magazine, millions of people working remotely led to a surge in demand for large and small tech companies’ goods, software, and services over the past few years.

Nonetheless, the layoffs have been difficult for US Employers and H-1B visa holders, who frequently have 60 days to find a new employer in order to maintain H-1B status. According to a survey of new hires conducted by ZipRecruiter, approximately 79% of workers hired following a layoff or termination at a tech company found a new job within three months of beginning their search.

That was slightly lower than the 83% of all laid-off workers who found new employment during the same time period. In the survey, ZipRecruiter found that less than a month after starting their job search, nearly four out of ten tech workers who had been laid off found work.

According to Julia Pollak, chief economist at ZipRecruiter, “many tech workers are finding reemployment remarkably quickly” despite widespread layoffs, hiring freezes, and cost-cutting in the sector.

The information used in this NFAP analysis comes from the USCIS H-1B Employer Data Hub.

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