The Trump administration’s attempts to restrict the H-1B
program have resulted in a skyrocketing denial rate among companies petitioning
for the visa. But which tech companies are impacted the most? Based on data
from the National Foundation for American Policy (NFAP), it’s clear that IBM is
taking a much bigger hit than tech giants such as Amazon, Microsoft, and Intel.

Denial rates for H-1B petitions have skyrocketed to 24 percent through the third quarter of fiscal year 2019, according to the NFAP, which attributes the shift to tighter screening by U.S. Citizenship and Immigration Services (USCIS). The agency sent companies additional Requests for Evidence (RFE) in 60 percent of cases in the first quarter of fiscal year 2019, for example, which is much higher than the traditional 20 percent “historical rate” for RFEs.

These denials hit two categories of H-1B petition: ‘initial employment,’ which means H-1B petitions for new employment, and ‘continuing employment,’ which is typically an extension for an existing employee. Let’s look at a company breakdown for the denial rate for H-1B petitions for initial employment:

What
jumps out at you? As we pointed out in another article about this dataset, it’s
clear that H-1B
denials are spiking at subcontracting and business-services firms such as
Cognizant. Meanwhile, the denial rate hasn’t risen nearly so much at
traditional tech firms such as Google, Apple, and Amazon.

Now check out the company breakdown for the denial rate for H-1B petitions for continuing employment:

Obviously, it’s the same trend here. What’s interesting is
that IBM’s skyrocketing denial rates are much more in line with that of a
consulting company than a “traditional” tech firm. Of course, IBM offers
consulting services in addition to its technology work (such
as quantum computing), and it’s probably that part of its business that’s
smashing headlong into the USCIS buzzsaw.

In addition to a more stringent review-and-denial process
for H-1Bs, USCIS has engaged other policies that have slowed down the program
over the past two years. The
agency 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; the heightened rate of RFEs has not only driven a
declining rate of visa approvals, but also helped spark dozens of corporate lawsuits against
the federal government. 

IBM and H-1B

The H-1B Salary Database, which indexes Labor Condition Application (LCA) disclosure data from the United States Department of Labor (DOL), gives us some additional insight into how much IBM pays its H-1B contractors. For this exercise, we isolated for the generic terms “software engineer” and “software developer,” as our recent analysis of the U.S. Department of Labor (DOL) dataset of H-1B visa applications for FY2019 found those were the most common terms for H-1B visa hires among tech companies (giving us a more comprehensive view of salary data).

With all that in mind, what did we find out? At IBM, the median salary for H-1B sponsored “software engineer” was $90,106 per year, although that number also varied greatly by city (as you might expect):

A sizable number of IBM’s H-1B
applicants, of course, aren’t even reaching this salary stage. It will be
interesting to see if the USCIS denial rate continues to rise over the next
year.