Recently, Bloomberg released a shocking exposé, “How Thousands of Middlemen Are Gaming the H-1B Program.” H-1B visas are a type of temporary non-immigrant visa designed to attract global talent by allowing U.S. employers to hire foreign workers who will hold specialty occupations. As the foremost work visa, demand is extremely high, but a chronic shortage plagues this visa program. Not only does this hamper the goals of individual employees and employers, but it also deters from the U.S. government’s goal of maximizing global talent. To not surpass established visa caps, USCIS is only allowed to allot about 85,000 non-exempt H-1B visas, and over 440,000 people sought them last year.
H-1B visas are distributed each year through a lottery system that is now being revealed to be remarkably flawed. Two categories of companies, multinational outsourcing companies and IT staffing firms, managed to obtain “nearly half the H-1Bs in Bloomberg’s analysis”, a percentage far higher than a random lottery should allow. Bloomberg found evidence that both outsourcing and staffing companies “can use their vast overseas workforces to flood the lottery with entries” and have been cheating “on a massive scale by submitting multiple entries for the same worker.” This scheme, known as “multiple registration,” prevents legitimate talent from accessing these skilled-worker visa-based opportunities.
“About one out of every six…were obtained by gaming the lottery”
As detailed in the article, Bloomberg has recently acquired newly accessible data unearthing more details surrounding these multiple registration schemes. An alarming number of last year’s H-1B visas, “about one out of every six…were obtained by gaming the lottery in this way.”
Bloomberg uses Cognizant, an outsourcing company, to demonstrate this strategy. Cognizant “needed fewer than 4,000 new workers on H-1Bs. But [Cognizant executives] recommended applying for almost three times that number.” Bloomberg even shows the document where the company explains their strategy of over-filing to compensate for what they predict is a 30% selection rate. This recommendation came to light amid a pending lawsuit against Cognizant “by US workers alleging discrimination in favor of visa recipients.”
“[M]ore than half of all lottery entries were for workers whose name had been submitted more than once.”
For some context, in 2020, USCIS began a formal lottery selection so employers (and immigration law firms) did not have to prepare H-1B applications for candidates that would not get chosen (previously, to be eligible at all, an application would need to be completed). With a much simpler and less time intensive selection process, the door was opened to the substantial multiple registration schemes we are now seeing. By 2023 “thousands of other staffing forms had caught on to the trick and flooded the system. By then, more than half of all lottery entries were for workers whose names had been submitted more than once.” Bloomberg estimates that “the multiple registration tactic pulled in about 40,000 H-1Bs over four years.”
However, despite changing the rules of the lottery in an effort to minimize this type of cheating, a significant problem persists: “USCIS says it isn’t allowed to bar companies from the lottery.” An individual visa can be revoked, but the companies that obtained the visa through this type of cheating are allowed to continue to apply for more (although lawsuits have been filed).
“USCIS says it isn’t allowed to bar companies from the lottery.”
Some of these same outsourcing and staffing companies are now being suspected of a new scheme: fake jobs. Bloomberg has noted in their analysis that many of these companies, even after one of their workers is selected in the lottery, do not end up completing a full application. The system actually favors these companies because it does not matter to them who of their lottery entries gets picked, so long as someone does. Even if these workers do possess legitimate talent, the lack of intention regarding who is submitted is alarming and perhaps serves as a warning that their talent is not the priority for these companies. Even taking into consideration the suggestion that the low filing rate is due to short-term nature of staffing firm contracts, which typically are six months (and the visa application can take much longer), that still demonstrates a serious issue with the current system.
“[A] mere 10% reduction in high-skilled immigrant workers would shrink the US economy by about $86 billion.”
The importance of H-1B visas, and where they are allocated, cannot be overstated.
This loss also carries significant economic weight. “A 2023 study from University of Pennsylvania’s Wharton School found that for every 10 H-1Bs that top US multinational companies lose out on, nine jobs are moved abroad. An economist at the Federal Reserve Bank of Richmond estimated that a mere 10% reduction in high-skilled immigrant workers would shrink the US economy by about $86 billion.” The importance of H-1B visas, and where they are allocated, cannot be overstated.
Bloomberg further exposes faults in the H-1B system delving into staffing firms which “function more like visa brokers than employers, selling aspiring migrants tickets to the US.” That is obviously not the intention of the visa application process. And it must be infuriating for those companies and applicants with legitimate job offers, who are playing by the rules, to lose out to those who continue to abuse the system.
As of February, USCIS updated the lottery again, and “selects from among unique individual, giving every worker an equal chance.” This update was directly in response to the multiple registration schemes. Hopefully, this will disincentivize multiple registration schemes and promote fair visa allocation, one of the inherent purposes of holding a lottery. Still, this remains to be seen as staffing companies continue to advertise promises regarding H-1B visas, further complicating an already complicated visa system.