H-1B applications drop as U.S. employers anticipate reforms

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(Bloomberg) -- Employers applied for about 16 percent fewer H-1B visas for highly skilled workers this year than in 2016, possibly reflecting concern that the Trump administration is taking a more restrictive approach to the program.

Employers seeking visas for 2018 submitted 199,000 applications this year, compared with 236,000 last year, U.S. Citizenship and Immigration Services said Monday. The visa program, which is designed to let companies hire highly skilled workers for technical jobs based in the U.S. that they’re having trouble filling, is a central policy focus of the technology industry.

As in past years, the number of applications far exceeded the 85,000 visas available. But this was the first time in the past five years that the total number of requests decreased. While the federal government made some incremental changes this year, it didn’t make any fundamental shifts — much to the frustration of some officials who have been pushing for sweeping reforms. There are several bills in Congress that would implement bigger adjustments, but they wouldn't impact the program until next year at the earliest.

The changes the new administration did make were intended to cut back on aggressive use of the visas by outsourcing companies. These companies tend to use the visas to hire less-skilled workers at much lower rates of pay. Indian information-technology companies have begun to prepare for a policy landscape that undercuts their current reliance on the program. To the extent those changes would cut back on the use of the program by India-based IT companies, it would benefit Silicon Valley giants that say they’d like to hire more employees on H-1B visas.

Bruce Morrison, who helped create the H-1B program and is now a lobbyist for tech-worker advocacy group IEEE-USA, said that the drop in applications reflects a shift in strategy rather than a true change in demand for the visas. Because the visas were granted via a random lottery, many companies apply for far more than they actually plan on using.

"I don't think the demand is lower, either from outsourcers or from direct employers," he said. "I don't think there were ever 230,000 jobs that were going to be filled."

Infosys Ltd., one of the heaviest users of the H-1B program, has said that it's looking for other ways to hire given the changing atmosphere.

“Because of the visa-related matters, we have to get more local hiring done,” Vishal Sikka, CEO of the Bangalore, India-based company, told investors last week.

As a candidate, President Donald Trump was critical of companies who use the H-1B program to displace American workers. It’s too early to say how his administration’s changes have affected the program this year. As in past years, the visas were granted through a random lottery. The government didn't release any data on which employers won.

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