H-1B Denials Spiking at Contractor, Services Firms

Denial rates for H-1B petitions have skyrocketed to 24 percent through the third quarter of fiscal year 2019, according to a new analysis by the National Foundation for American Policy (NFAP) of U.S. Citizenship and Immigration Services (USCIS) data. In other words, it seems the Trump administration is cracking down hard on companies petitioning for […]


Denial rates for H-1B petitions have skyrocketed to 24
percent through the third quarter of fiscal year 2019, according to a new
analysis by the National Foundation for American Policy (NFAP) of U.S.
Citizenship and Immigration Services (USCIS) data. In other words, it seems the
Trump administration is cracking down hard on companies petitioning for H-1B
visas. But which companies are getting hammered the hardest?

“In the first three quarters of FY
2019, USCIS adjudicators denied 24 percent of H-1B petitions for ‘initial’
employment and 12 percent of H-1B petitions for ‘continuing’ employment,” read
the NFAP report (PDF)
. “The 12 percent denial rate for continuing
employment is also historically high—4 times higher than the denial rate of
only 3 percent for H-1B petitions for continuing employment as recently as FY
2015.” (For those curious, ‘initial employment’ means H-1B petitions for new
employment, whereas ‘continuing employment’ is typically an extension for an
existing employee.)

As you might suspect, NFAP suggests that these heightened denial rates are directly connected to USCIS enforcing a tighter legal standard when it comes to these H-1B petitions. “USCIS has systematically rewritten the rules on H-1B visas, without following the law, and destroyed any sense of predictability in the system,” Jonathan Wasden, an attorney who files lawsuits against USCIS on behalf of employers, told the organization.

USCIS fired off additional Requests for Evidence (RFE) in 60 percent of cases in the first quarter of fiscal year 2019, a number that dipped to 40 percent in subsequent quarters—but is nonetheless significantly higher than the 20 percent “historical rate” for RFEs. Check out this chart for a breakdown of which companies are seeing their petitions for initial employment denied:

One thing is really clear: consulting
and business-services firms are taking some hard hits under the new paradigm.
“At least 12 companies that provide professional or IT services to other U.S.
companies, including Accenture, Capgemini and others, had denial rates over 30
percent through the first three quarters of FY 2019,” the report added. “Most
of these companies had denial rates between 2 percent and 7 percent as recently
as FY 2015.”

In
a statement to Mother Jones
, a USCIS spokesman framed the agency’s reforms
as “designed to protect U.S.
workers, cut down on frivolous petitions, strengthen the transparency of
employment-based visa programs, and improve the integrity of the immigration
petition process.”

As the Trump Administration tightens
its restrictions around the H-1B visa, many companies are reacting to the
restrictions by outsourcing their work to offices in other countries. At least,
that’s
the theory of Britta Glennon
, a professor at the Wharton School of Business,
who wrote
in a recent paper
:

“Firms were more likely to open new foreign affiliates abroad in response [to H-1B restrictions], and employment increased at existing foreign affiliates. The effect is strongest among R&D-intensive firms in industries where services could more easily be offshored. The effect was somewhat geographically concentrated: foreign affiliate employment increased both in countries like India and China with large quantities of high-skilled human capital and in countries like Canada with more relaxed high-skilled immigration policies and closer geographic proximity.”

Indeed, reports earlier this year suggested that firms were looking to open Canadian offices rather than deal with unpredictability related to the U.S. government’s H-1B policies. Meanwhile, the U.S. government continues to tighten those policies: For example, USCIS recently began asking companies about the type of work that H-1B visa recipients will be doing, such as vendor agreements, subcontractors, and lists of projects. Based on the trends in data, it seems obvious that this higher rate of denials will continue through at least the end of the Trump administration—bringing serious pain to some companies.

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