Big Rush For H-1B Visas As US Economy Picks Up

The US H-1B visa quota for the coming year is expected to be exhausted within five days beginning April 1, marking the first time since 2008 that the cap would be reached so rapidly. 
    
The uptick in the American economy that has created expectations of better IT deal flows is a major reason for this. Some say that growing uncertainties around obtaining L1 visas – the other visa that companies use to send people to the US on work – has also pushed companies to try their luck with H-1B. 
    
“Most of our customers are optimistic of a faster US recovery, which in turn will lead to higher IT spending in the coming months. And this cautious optimism is reflecting in the higher demand for H-1B visas this year,” said Parthasarathy N S, COO of Bangalore-based IT company Mindtree. 
    
The H-1B is a non-immigrant visa that allows US employers to temporarily employ foreign workers. Indian IT companies, with American subsidiaries, are the biggest users of this visa, accounting last year for more than half of the quota (if Cognizant is counted as an Indian company). 
    
H-1B applications are submitted from the first working day of April for the financial year beginning October. There is a cap of 65,000 for these visas, and if the number of applications quickly exceeds the quota, the US Citizenship and Immigration Services (USCIS) employs a lottery-based selection process. This was used for the first time in 2008, when the quota was exceeded on the very first day for application submission. But following the 2008-09 recession, demand for these visas slumped, and the quota limit was reached over several months. It was slightly better last year, when the quota was reached on June 11. 
    
The Chugh Firm, a USbased legal firm that helps companies with immigration issues, says in a recent newsletter: “We have noticed that as the economy has increasingly been getting better and the unemployment rate has been decreasing; there has also been a steady resurgence in H-1B filings. Many companies were surprised last year when the H-1B visa cap was reached on June 11, leading many to have to wait until this year to file…USCIS anticipates the quota will be used up in the first 5 days. This could be the first time since April 2008 that the H-1B cap will require a lottery.” 
    
Saju James, partner in global corporate immigration law firm Fragomen in India, says the rush for H-1Bs this year is partly a derisking move. “L1 visas are not very predictable especially in moving resources back and forth. There are debates around the nature of specialization of IT service providers within client systems where they are working with the latter’s proprietary products,” he said. There have been reports over the past year that some companies have seen up to 40% of their L1 applications being rejected. Rakesh Prabhu, partner-immigration practice in ALMT Legal, said L1s were not the preferred option for Indian IT companies. 
    
The visa quota getting exhausted in 5 days doesn’t bode well for the Indian IT industry. “It will be a constraint to our plans. We will use other approaches to service our customers. Specifically, we will use local talent in our US delivery centre,” said Mind-Tree’s Parthasarathy.