H-1B Update

The End of An Era?

It became a ritual over the last few years. Beginning in February and ending on March 31, immigration lawyers and clients worked against the clock to prepare, package, and file H-1B visa applications. Since 2007, April 1 was (for immigration lawyers and clients) the equivalent of April 15 for CPAs. But unlike CPAs and federal tax-filers across the U.S., immigration lawyers and their clients faced weeks of uncertainty after their filing. When you file your taxes you know you are due a refund or owe for underpayment. For H-1B filers, however, once USCIS received all applications they conducted a lottery to determine whose application would be considered…and whose would be returned to sender.

Apparently that process (and the glut of H-1B filings each April) is no longer. Yesterday, USCIS announced they only received approximately 42,000 applications for the 65,000 visas for the 2009-10 fiscal year. So after submitting our applications for delivery on April 1, and in light of this recent news, here are a few thoughts and observations:

-H-1B applications in the lottery era peaked in 2007, with nearly 200,000 applications filed for 65,000 visas;

-In light of the H-1B lottery, lawyers and clients have used more and more creativity to meet the demand for foreign workers; and

-The recent steep downturn in our economy (combined with the uncertainty of the H-1B lottery system) certainly had a noticeable impact on H-1B applications, cutting filings by 75% from the 2007 peak.

There is a Catch-22 at work here. Just as the Obama administration announced this week that comprehensive immigration reform remained on its agenda, we now see the impact of the economy, which suggests a reduced need for temporary work visas. But do not be misled. The problems with our immigration system primarily derive from the lack of flexibility inherent in our cap-based system. Fixed caps create artificial ceilings that, in most cases, do not reflect current needs. So in 2009, the ceiling may be reached, but the demand changed dramatically from 2007 and 2008. And while we all hope the economy will rebound and recover soon, what does that mean for 2010? The last thing a rebounding business needs in 2010 is increased demand for temporary work visas that returns us to 2007 and 2008. Perhaps a flexible cap tied to national unemployment figures? Or a bifurcated filing season, much like H-2B seasonal visas? There may not be a perfect solution, but our current system needs a healthy dose of realism and pragmatism to avoid past crises.