With the H-1B visa program facing uncertainty ahead of President-elect Donald Trump’s impending return to the White House, many US companies have started hiring remote employees based in other countries to bypass the process, according to a media report.
“This growing trend speaks to the existing challenges and limitations of the current visa programs, which carry significant administrative and financial costs,” Newsweek reported.
READ: What a second term for Donald Trump means for H-1B visa seekers (December 10, 2024)
It’s happening “all the time,” Kathleen Campbell Walker, partner and immigration practice group chair at the law firm Dickinson Wright, was cited as saying by Newsweek. Employers are pursuing alternate paths to visas in large part due to the administrative burdens and risk of dealing with existing programs.
“I only go into H-1B when I have no choice, because it’s costly, it’s uncertain as far as the lottery, and it is the most highly regulated option that I have to present to an employer to choose from,” Walker said.
Newsweek cited a 2024 survey from Envoy Global, an employment immigration services provider, finding that 83% of employers hired one or more employees outside of the country for roles initially intended to be based in the United States.
In recent years Indian techies have cornered nearly three fourths of 85,000 H-1B visas, including 20,000 for those with masters degrees from US institutions, issued to US employers to bring in highly skilled foreign workers.
With a cap of 85,000, but nearly five times as many exceptions approved annually, the H1-B program averaged about 585,000 recipients in 2018-2019, Newsweek noted. After a Covid-related dip, it rose back to 410,000 recipients in 2022 and more than 750,000 in 2023, the American Immigration Council reported Jan 3, citing data from U.S. Citizenship and Immigration Services.
But the program doesn’t meet the demand that clearly exists for foreign talent, and the approval process is based on an opaque lottery system, according to Newsweek. Moreover, the list of the most frequent H-1B users is dominated by the titans of the tech, finance and consulting industries.
“[The H-1B visa program] greatly benefits the employers that are sponsoring these visas…but now it’s unclear whether they are unable to fill these job needs through domestic workers,” Sahar Akhtar, a professor of strategy and ethics at Georgetown University’s McDonough School of Business, told Newsweek. “It raises questions about these companies’ influence over our elected officials.”
The list of the companies who make the most use of the H-1B visa is topped by Amazon, with well-known tech and consulting giants making up the majority of the list, including Infosys, Google, Meta, IBM and Deloitte in the top 10, with Accenture, Microsoft, Apple, Intel, EY and Goldman Sachs not far behind, according to a 2023 report from the Economic Policy Institute (EPI). Elon Musk’s Tesla sits at 27, below Walmart (25) and above Cisco (28) and Nvidia (30).
The severity of this talent need for major employers has come into question as of late, especially as many of the companies who have the highest volume of H-1B visa petition approvals also conducted layoffs over the last two years, Newsweek said citing the EPI report.
“If we have high employment and low unemployment rates, then you will typically see a higher demand for these H-1B workers,” Walker said.
The 99.9% of companies that aren’t among the largest, most powerful companies in the world are hiring people abroad to work remotely — as H-1B program is too costly and they’re not likely to be approved— Newsweek reported citing Envoy Global and the HR services provider Gusto.
Research conducted in January 2024 from Gusto found that “small and medium-sized businesses (SMBs) are increasingly hiring outside of the United States,” with 60% of SMB leaders surveyed saying they find it difficult to find talent domestically. Additionally, 75% of those that did make an international hire say they plan to hire more from outside the country in the coming years.
According to a survey by Gusto in August 2024, 11% of small businesses reported hiring an international contractor or employee.” Gusto’s research noted that hiring freelancers or contract workers from other countries is also on the rise.
“While remote solutions are great, not all jobs can be completed remotely, and not all companies want remote employees,” Newsweek noted. “But for now, access to skilled immigrant labor does not seem to be high for small- and medium-sized businesses.”
READ: Enter Stephen Miller: Trump’s hardline immigration agenda takes shape (November 11, 2024)
Walker also told Newsweek that some companies open entities in Canada or Mexico and then bring skilled workers from other countries to those entities, where they can naturalize or transfer internally using an uncapped program for workers from North America.
“Temporary work visas in general, including H-1B, have been the business community’s top priority on immigration policy for many years now,” Daniel Costa, professor at the University of California, Davis, and director of immigration law and policy research at EPI, told Newsweek via email. “They would like to see more approved and fewer rules about whom they can hire and how much they can pay.”
Costa noted that any president “has the requisite legal authority to fix many of the problems we have identified in H-1B.” That puts the ball squarely in Trump’s court!