H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program
Published: 2011-01-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress created the H-1B program in 1990 to enable U.S. employers to hire temporary, foreign workers in specialty occupations. The law capped the number of H-1B visas issued per fiscal year at 65,000. Since then, the cap has fluctuated with legislative changes. Congress asked GAO to assess the impact of the cap on the ability of domestic companies to innovate, while ensuring that U.S. workers are not disadvantaged. In response, GAO examined what is known about (1) employer demand for H-1B workers; (2) how the cap affects employer costs and decisions to move operations overseas; (3) H-1B worker characteristics and the potential impact of raising the cap; and (4) how well requirements of the H-1B program protect U.S. workers. GAO analyzed data from 4 federal agencies; interviewed agency officials, experts, and H-1B employers; and reviewed agency documents and literature.
section_title: What GAO Found
paragraphs: In most years, demand for new H-1B workers exceeded the cap: From 2000 to 2009, demand for new H-1B workers tended to exceed the cap, as measured by the numbers of initial petitions submitted by employers who are subject to the cap. There is no way to precisely determine the level of any unmet demand among employers, since they tend to stop submitting (and the Department of Homeland Security stops tracking) petitions once the cap is reached each year. When we consider all initial petitions, including those from universities and research institutions that are not subject to the cap, we find that demand for new H-1B workers is largely driven by a small number of employers. Over the decade, over 14 percent of all initial petitions were submitted by cap-exempt employers, and only a few employers (fewer than 1 percent) garnered over one-quarter of all H-1B approvals. Most interviewed companies said the H-1B cap and program created costs, but were not factors in their decisions to move R&D overseas: The 34 H-1B employers GAO interviewed reported that the cap has created some additional costs, though the cap's impact depended on the size and maturity of the company. For example, in years when visas were denied by the cap, most large firms reported finding other (sometimes more costly) ways to hire their preferred job candidates. On the other hand, small firms were more likely to fill their positions with different candidates, which they said resulted in delays and sometimes economic losses, particularly for firms in rapidly changing technology fields. Limitations in agency data and systems hinder tracking the cap and H-1B workers over time: The total number of H-1B workers in the U.S. at any one time--and information about the length of their stay--is unknown, because (1) data systems among the various agencies that process such individuals are not linked so individuals cannot be readily tracked, and (2) H-1B workers are not assigned a unique identifier that would allow for tracking them over time--particularly if and when their visa status changes. Restricted agency oversight and statutory changes weaken protections for U.S. workers: Elements of the H-1B program that could serve as worker protections--such as the requirement to pay prevailing wages, the visa's temporary status, and the cap itself--are weakened by several factors. First, program oversight is fragmented and restricted. Second, the H-1B program lacks a legal provision for holding employers accountable to program requirements when they obtain H-1B workers through a staffing company. Third, statutory changes made to the H-1B program have, in combination and in effect, increased the pool of H-1B workers beyond the cap and lowered the bar for eligibility. Taken together, the multifaceted challenges identified in this report show that the H-1B program, as currently structured, may not be used to its full potential and may be detrimental in some cases. This report offers several matters for congressional consideration, including that Congress re-examine key H-1B program provisions and make appropriate changes as needed. GAO also recommends that the Departments of Homeland Security and Labor take steps to improve efficiency, flexibility, and monitoring of the H-1B program. Homeland Security disagreed with two recommendations and one matter, citing logistical and other challenges; however, we believe such challenges can be overcome. Labor did not respond to our recommendations.

section_title: Letter
paragraphs: The current H-1B program, which permits U.S. employers to hire foreign  workers in specialty occupations, was authorized in 1990. The same law  also placed a cap of 65,000 on H-1B visas issued per fiscal year beginning  in fiscal year 1992. However, since then, the cap has fluctuated with  legislative changes, reaching a peak of 195,000 in fiscal years 2001 to 2003.  Today, the cap is set at 65,000 and continues to be a topic of debate.  Proponents of raising the H-1B cap argue that doing so would allow  companies to better fill an important and growing gap in the supply of U.S.  workers, especially in the science and technology fields. Opponents of  raising the cap argue that there is no skill shortage, that the H-1B program  displaces U.S. workers and undercuts their pay, and that the cap is an  essential tool to protect U.S. workers. Others argue that the skill criteria  for the H-1B visa should be revised to better target foreign nationals whose  talents are undersupplied in the domestic workforce.
This report responds to a congressional request that GAO assess the  impact of the current H-1B visa cap on the ability of domestic companies  to develop modern technology and perform innovative research and  development (R&D) while ensuring that U.S. workers are not unfairly  disadvantaged or displaced by H-1B visa holders. With respect to H-1B  employers, we examined what is known about (1) their demand for H-1B  workers and (2) how the H-1B cap affects costs, offshoring, and R&D  decisions for companies doing business in the United States. With respect  to H-1B and U.S. workers, we examined what is known about (3) H-1B  worker characteristics, (4) how raising the H-1B cap might affect the  employment and wages of U.S. workers, and (5) how well H-1B program  requirements ensure that U.S. workers are not displaced or otherwise  disadvantaged by the program.
To address these questions, we drew upon a range of information sources.  Specifically, to determine what is known about the demand for H-1B  workers and their characteristics, we obtained and analyzed administrative  data on employer applications for H-1B visas from the Department of Labor  (Labor) for fiscal year 2002 through fiscal year 2009 and from the  Department of Homeland Security (Homeland Security) from fiscal year  2000 through fiscal year 2009; collected and analyzed data on the 150 H-1B  employers with the greatest number of approvals in 2009; and analyzed data  on visa issuances published by the Department of State (State).
To understand the impact of the cap on companies’ costs and their  decisions to offshore work and invest in R&D, we interviewed a  nongeneralizable sample of 34 H-1B hiring companies spanning the  country in six industrial sectors, with a range of sizes from a few workers  based in one location to thousands of workers positioned around the  globe. We also conducted interviews with representatives from  immigration law firms, venture capital companies, industry advocacy  organizations, and academic institutions, and conducted an extensive  literature review.
To examine the impact of the H-1B program on domestic employment, we  obtained data from Homeland Security on the long-run immigration  outcomes of prospective H-1B workers that were approved to start work  in H-1B status between January 1, 2004, and September 30, 2007, for whom  data were available; analyzed Homeland Security data and Bureau of  Labor Statistics’ (BLS) Current Population Survey (CPS) data from 2009 to  compare the wages of H-1B workers with those of U.S. citizens in three  occupation groups; and analyzed CPS employment, unemployment, and  earnings data for the top H-1B occupations.
To assess the effectiveness of the H-1B program’s current protections for  U.S. workers, we conducted site visits to Labor and Homeland Security  processing centers for H-1B applications and to Labor’s regional office  that receives the highest number of H-1B-related complaints in the  country; conducted interviews with agency officials from Labor,  Homeland Security, the Department of Justice (Justice), and State  involved with various facets of the program including complaint and fraud  investigations, as well as with labor advocates and experts knowledgeable  in this area; and obtained and analyzed agency data collected on  complaints about the H-1B program.
To address all objectives, we reviewed relevant federal laws and  regulations, articles, and the temporary immigration programs of several  other countries that we selected based on our literature review and  discussions with experts.
We conducted this performance audit from May 2009 through January  2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
See appendix I for a detailed account of the objectives, scope, and  methods for this report.
subsections: section_title: Background
paragraphs: The H-1B program enables companies in the United States to hire foreign  workers for work in specialty occupations on a temporary basis. A  specialty occupation is defined as one requiring theoretical and practical  application of a body of highly specialized knowledge and the attainment  of a bachelor’s degree or higher (or its equivalent) in the field of specialty.
The law originally capped the number of H-1B visas at 65,000 per year, but  the cap has changed several times pursuant to legislation. The American  Competitiveness and Workforce Improvement Act of 1998 increased the  cap to 115,000 for fiscal year 1999 and fiscal year 2000. The American  Competitiveness in the Twenty-First Century Act of 2000 (AC21) further  increased the limit to 195,000 for fiscal year 2001 through fiscal year 2003.  In fiscal year 2004, the cap reverted to its original level of 65,000.
Over this period, statutory changes also allowed for certain categories of  individuals and companies to be exempt from or to receive special  treatment under the cap. In 2000, AC21 exempted all individuals being  hired by institutions of higher education, as well as nonprofit and  government-research organizations, from the cap. More recently, the H-1B  Visa Reform Act of 2004 allowed for an additional 20,000 visas each year  for foreign workers holding a master’s degree or higher from an American  institution of higher education to be exempted from the numerical cap  limitation. In addition, in 2004, consistent with free trade agreements,  amendments allowed for up to 6,800 of the 65,000 H-1B visas to be set  aside for workers from Chile and Singapore. Figure 1 depicts the cap  levels over the last 20 years and important changes to provisions related to  their application.  See appendix V for a list of selected H-1B program  laws, with descriptions of key provisions.
While the H-1B visa is not considered a permanent visa, H-1B workers can  apply for extensions and pursue permanent residence in the United States.  Initial petitions are those filed for a foreign national’s first-time  employment as an H-1B worker and are valid for a period of up to 3 years.  Generally, initial petitions are counted against the annual cap.  Extensions—technically referred to as continuing employment petitions— may be filed to extend the initial petitions for up to an additional 3 years.  These extensions may be filed for extended employment; sequential  employment (when an H-1B worker changes employers within his or her 6- year time period); or for concurrent employment (when an H-1B worker  intends to work simultaneously for a second employer). Extensions do not  count against the cap. While working under an H-1B visa, an H-1B worker  may apply for legal permanent residence in the United States. After filing  an application for permanent residence, H-1B workers are eligible to  obtain additional 1-year visa extensions until their green card is issued.  To obtain such extensions, the green card application must be  employment-based (i.e. not a green card sponsored by a family member).  Employment-based green cards can take a number of years to obtain due  to limits on the number of green cards issued to individuals from different  countries and in particular employment categories.
subsections: section_title: Program Administration
paragraphs: Labor, Homeland Security, and State each play a role in administering the  application process for an H-1B visa. Labor’s Employment and Training  Administration (Employment and Training) receives and approves an  initial application, known as the Labor Condition Application (LCA), from  employers. Homeland Security’s U.S. Citizenship and Immigration Services  (USCIS) reviews an additional employer application, known as the I-129  petition, and ultimately approves H-1B visa petitions. For prospective H-1B  workers residing outside the United States, State interviews these  approved applicants and compares information obtained during the  interview against each individual’s visa application and supporting  documents, and ultimately issues the visa. For prospective H-1B workers  already residing in the United States, USCIS updates the workers’ visa  status without involvement from State.
Homeland Security’s USCIS has the primary responsibility for  administering the H-1B program, which includes responsibility for tracking  the number of approved petitions against the established cap. Generally,  Homeland Security accepts H-1B petitions in the order in which they are  received. However, for those years in which USCIS anticipates that the  number of I-129 petitions filed will exceed the cap, USCIS holds a “lottery”  to determine which of the petitions will be accepted for review. For the  lottery, USCIS uses a computer-generated random selection process to  select the number of petitions necessary to reach the cap. USCIS runs two  lotteries—one for cases subject to the 65,000 cap, and another for the  20,000 visas available to foreign workers holding a master’s degree or  higher from an American institution of higher education.
With regard to enforcement, Labor, Justice, and Homeland Security each  have specific responsibilities. Labor’s Wage and Hour Division (Wage and  Hour) is responsible for enforcing program rules by investigating  complaints made against employers by H-1B workers or their  representatives and assessing penalties when employers are not in  compliance with the requirements of the program. Justice is responsible  for investigating complaints made by U.S. workers who allege that they  have been displaced or otherwise harmed by the H-1B visa program.  Finally, Homeland Security’s Directorate of Fraud Detection and National  Security (FDNS) collaborates with its Immigration and Customs  Enforcement Office to investigate fraud and abuse in the program.
section_title: Employer Application Requirements
paragraphs: The application and approval process for an employer to hire an H-1B  worker requires submission of an LCA and the I-129 petition. The  employers must first submit the LCA to Employment and Training for  certification. The LCA may reflect requests for one or more workers. On  this form, employers must provide their company name, address,  Employer Identification Number, and the rate of pay and work location for  the anticipated H-1B workers among other information. Submission of the  LCA to Employment and Training also involves employers making four  attestations: (1) that they will pay H-1B workers the amount they pay other  employees with similar experience and qualifications or the prevailing  wage; (2) that the employment of H-1B workers will not adversely affect  the working conditions of U.S. workers similarly employed; (3) that no  strike or lockout exists in the occupational classification at the place of  employment; and (4) that the employer has notified employees at the place  of employment of the intent to employ H-1B workers. These attestations  are designed to protect both the jobs of domestic workers and the rights  and working conditions of foreign temporary workers.
H-1B-dependent employers or employers found to have committed a  willful failure or misrepresentation during the 5-year period preceding the  filing of the LCA must make additional attestations on their LCA. They  must attest (1) that they did not displace a U.S. worker within the period  of 90 days before and 90 days after filing a petition for an H-1B worker; (2)  that they took good-faith steps prior to filing the H-1B application to  recruit U.S. workers and that they offered the job to a U.S. applicant who  was equally or better qualified than an H-1B worker; and (3) that they not  place the H-1B worker with any other employer, unless they inquired and  have no knowledge that, within the 90 days before and 90 days after the  placement, the other employer has displaced or intends to displace a U.S.  worker with the H-1B worker.
Unlike some other temporary visa programs, the H-1B program does not  require employers to provide evidence that they have first “tested” the U.S.  labor market by trying to hire a U.S. worker. Under other temporary visa  programs, such as the H-2A program for temporary agricultural workers  and the H-2B program for temporary nonagricultural seasonal or  intermittent workers, an employer must, for example document that it has  conducted detailed recruitment efforts, advertised the job as specified,  listed the job with its State Workforce Agency, and under certain  circumstances, document why it did not hire applicants it rejected. In the  H-1B program, only those employers that are designated as H-1B-dependent  or willful violators are subject to any type of labor market test. However,  these employers need only attest, rather than demonstrate, that they took  good faith steps to hire a U.S. worker.
Once Labor has approved the LCA, employers must submit the certified  LCA to Homeland Security, along with the I-129, for additional review. The  I-129, submitted by employers to Homeland Security for each prospective  H-1B worker, must show the wage that will be paid, the location of the  position, and the worker’s qualifications, among other information. Figure  2 summarizes the steps required to obtain an H-1B visa.
section_title: Demand for H-1B Workers Exceeded the Cap in Most Years and Was Largely Driven by a Small Number of Companies
paragraphs: Available data show that, while demand for H-1B workers by employers  has fluctuated with the economy over the past decade, the demand for   H-1B workers tended to exceed the cap, as measured by the numbers of  initial petitions submitted by employers. In addition, although the vast  majority of employers for which Homeland Security processed petitions  were approved to hire just one worker, a small number of employers  consistently garnered about 30 percent of all approved petitions.
subsections: section_title: In Most Years, Demand for H-1B Workers Exceeded the Cap, but Precise Measures of Demand Do Not Exist
paragraphs: Although a precise measure of demand for H-1B workers does not exist, a  key proxy—the number of initial petitions for new H-1B workers  submitted to Homeland Security annually—indicates that demand for   H-1B workers tended to exceed the cap over the last decade. As shown in  figure 3, from 2000 to 2009, initial petitions for new H-1B workers  submitted to Homeland Security by employers who are subject to the cap  exceeded the cap in all but 3 fiscal years. If initial petitions submitted by  employers exempt from the cap are also included in this measure, the  demand for new H-1B workers is higher, since over 14 percent of all initial  petitions across the decade were submitted by employers who are not  subject to the cap. However, the number of initial petitions submitted  annually is likely to be an underestimate of demand for two reasons. First,  employers subject to the cap may stop submitting initial petitions once  they know the cap has been reached. Second, according to Homeland  Security officials, Homeland Security stops accepting petitions that are  subject to the cap once the cap is reached. Consequently, we cannot  precisely determine the level of any unmet demand among those  employers who are subject to the cap.
When requests to extend H-1B workers’ visas (i.e., extensions) are  included in the total count of submitted petitions, we found that submitted  petitions not subject to the cap generally increased as a proportion of  overall petitions submitted from fiscal years 2000 to 2009, and greatly  exceeded those that were subject to the cap in the last half of the decade.  As shown in figure 4, during this time period, the proportion of all  submitted petitions that were not subject to the cap increased from 48.9  percent in 2000 to 64.6 percent in 2009. However, as noted previously,  submitted petitions for H-1B workers subject to the cap are likely to be  underestimated. Additionally, Homeland Security’s data system does not  enable us to determine which petitions for H-1B workers were subject to  the 20,000 master’s cap.
Another proxy of demand for H-1B workers is the number of employers  that submitted petitions for H-1B workers to Homeland Security each year.  As shown in figure 5, the overall number of employers submitting petitions  for H-1B workers—both initial petitions and requests for visa extensions— fluctuated from 44,675 in fiscal year 2000 to 58,956 in fiscal year 2009 with  a high of 80,945 in fiscal year 2004, showing much less annual fluctuation  than the overall number of H-1B workers they requested. This proxy is  also likely to underestimate demand because any additional employers  submitting petitions for H-1B workers subject to the cap were not counted  after the cap was reached.
section_title: While the Vast Majority of Employers Were Approved for Just One H-1B Worker, a Small Set of Employers Garnered Over One- Quarter of All H-1B Approvals
paragraphs: Most employers that submitted petitions to Homeland Security were  approved, and most were approved for one H-1B worker, but a small  percent of employers garnered over one-quarter of all H-1B approvals  between fiscal year 2000 and fiscal year 2009. Over the 10-year period,  about 94 percent of all submitted petitions (initial and extensions) were  approved, with a high of 97 percent in fiscal year 2006 and a low of 84  percent in fiscal year 2009. With respect to the number of approved  workers per employer, 68 percent of employers were approved for 1 H-1B  worker and about 99 percent of all employers with approved petitions  (627,922) were approved for 100 or fewer workers. However, over the  decade, less than 1 percent of all employers with approved petitions were  approved to hire almost 30 percent of all H-1B workers.
Further, according to Labor’s application data, between 3 and 5 percent of  all employers were categorized as being either H-1B-dependent or willful  violators between fiscal year 2002 and fiscal year 2008. However, Labor  does not require employers to report (and therefore Labor’s data do not  indicate) the proportion of H-1B workers that comprise each employer’s  workforce.
Among the top H-1B-hiring employers—those approved for large numbers  of H-1B workers—are employers that function as “staffing companies,”  (i.e., employers that apply for H-1B workers but ultimately place these  workers at the worksites of other employers as part of their business  model, many of which also outsource work overseas). Some foreign- owned information technology (IT) services firms have publicly stated that  their ability to provide IT services to U.S. customers depends in part on  access to significant numbers of H-1B and L-1 visa workers. Ultimately, the  prevalence of these employers participating in the H-1B visa program is  difficult to know because there are no disclosure requirements and  Homeland Security does not track such information. However, using  publicly available data on H-1B-hiring employers we learned that at least  10 of the top 85 H-1B-hiring employers in fiscal year 2009 participate in  staffing arrangements, of which at least 6 have headquarters or operations  located in India. Together, in fiscal year 2009, these 10 employers garnered  nearly 11,456 approvals, or about 6 percent of all H-1B approvals. Further,  3 of these employers were among the top 5 H-1B-hiring companies,  receiving 8,431 approvals among them.
section_title: Most Interviewed Companies Said the H-1B Cap and Program Created Costs, but Were Not Factors in Their Decisions on R&D and Offshoring
paragraphs: To better understand the impact of the H-1B cap and program on H-1B  employers, GAO interviewed 34 companies—including individual  structured interviews with 31 companies and group discussions with 3  companies—about how the H-1B program affects their costs of doing  business, their R&D activities, and their decisions about whether to locate  work overseas. These companies reported that the H-1B cap created  various costs, but those costs varied depending on the size and maturity  of the company. While many companies said that access to skilled labor is  a significant factor in locating their R&D labs, few said that the H-1B cap  was an important factor in their decisions about locating activities (either  R&D or other skilled work) abroad, with the exception of IT services  firms.
subsections: section_title: Depending on Their Size and Maturity, Some of the Interviewed Companies Said the Cap Resulted in Hiring Delays and Costs Associated with Uncertainty
paragraphs: Many of the 34 companies we spoke with cited a range of direct and  indirect costs associated with the H-1B cap and program features,  including staffing uncertainties, legal and administrative fees, and other  costs. However, the nature and extent of some costs varied with the type  of firm.
subsections: section_title: Costs of the H-1B Program
paragraphs: According to firms we interviewed, uncertainty in staffing due to the cap  has imposed varied, and for some significant, costs to doing business,  although they are difficult to quantify. Twenty-one of the 31 firms we  interviewed individually reported that they had H-1B petitions denied due  to the cap in years when the cap was reached early in the filing season. In  these years, the firms did not know which, if any, of their H-1B candidates  would obtain a visa, and several (7) firms said that this situation created  uncertainty that interfered with both project planning and candidate  recruitment. Two firms also said that delays in processing their petitions,  such as requests for additional evidence, sometimes resulted in their  candidates accepting other positions in the United States or abroad  instead of waiting for a resolution. In addition, two firms mentioned that in  order to get the petition application in before the deadline, they sometimes  made job offers to candidates who required H-1B visas before they were  certain of the need to hire them.
Firms cited other costs associated with acquiring H-1B hires, such as legal  and administrative costs, and Homeland Security filing fees. For H-1B  applications, the combined legal and filing fee costs among the 26 firms  that reported this information to us ranged from an estimated $2,320 to  $7,500 or more per petition. However, several firms mentioned that  petitions that generated additional requests for evidence from Homeland  Security could result in higher legal costs, as well as additional  administrative costs resulting from the staff hours required to collect  extensive evidence. Several firms we spoke to also noted that Homeland  Security filing fees have increased significantly in recent years—for  example, Homeland Security fees for firms that are not exempt from the  cap have risen from $110 in fiscal year 2000 to $2,320 in fiscal year 2009.
With regard to firms that eventually file applications for permanent  residency for their H-1B workers, some employers we spoke with noted  that their total legal and administrative costs for the duration of the  process are large. For example, one company official estimated the  combined costs of the H-1B and green card process to be about $16,000  over the duration of the process. Two respondents noted that they have  such long-term costs in mind when considering H-1B candidates. While  only a few respondents brought up the cost of sponsoring an H-1B worker  for permanent residency, nearly all (30 out of 31) of the firms we spoke  with indicated that they had sponsored at least some of their H-1B visa  holders for permanent residency, and 8 said that they typically sponsor all  H-1B visa holders whose job performance was satisfactory.
section_title: Experience of Large Firms with H-1B Program
paragraphs: In years when firms did not receive approvals for all of their H-1B  petitions, most of the large, multinational firms we spoke with reported  that they were generally able to hire their preferred candidates because  the firms were skilled at navigating the immigration system. Specifically,  12 of the 14 large, multinational firms we spoke with reported having  found a way to hire a job candidate denied an H-1B visa due to the cap.  They did so, for example, by sending the candidate to work in an overseas  office and subsequently bringing him or her in on an L-1 visa, or by  extending the practical training period allowed under their student visa for  an additional year. Some firms noted, however, that these alternatives can  be very costly. For example, after H-1B visas for preferred job candidates  fell through, nine companies said they had sometimes placed their job  candidates temporarily overseas, and three mentioned that this process  required the company to pay an “expatriate package,” with allowances for  housing and living expenses. One company executive said hiring an  employee on an expatriate package is often three times more costly than  hiring the same employee in the U.S.—a point with which others we spoke  with concurred.
section_title: Experience of Smaller Firms with H-1B Program
paragraphs: Of the 13 smaller H-1B employers we spoke with, 8 indicated that they had  incurred significant business costs resulting from petitions denied due to  the cap, delays in processing H-1B petitions, and other costs associated  with the H-1B program. Six of the smaller companies we spoke with had  petitions denied due to the cap, and of these, four indicated they did not  have the resources or the infrastructure in place to pursue alternatives  such as placing a desired employee abroad for a year. In addition,  executives from four of the six small firms we spoke with who had  petitions denied due to the cap told us that they had to delay or cancel  projects, or hire second-choice employees, because they were unable to  hire all of the employees for whom they sought H-1B petitions. Several  firms in technology-intensive fields such as IT product development—both  large and small—stressed that the product development cycles in their  industries are extremely compressed, and in order to be competitive, they  frequently need to develop new products in a matter of months, not years.  Some of these firms told us that any delay in hiring an essential employee  can, therefore, result in significant losses. One founder of a technology  company, who valued his 3-year-old firm at about $100 million dollars, said  a 3-month delay in product development could mean lost opportunities  worth several million dollars.
section_title: Experience of Emerging Firms with Immigration System
paragraphs: To gain the perspective of entities that support and work with emerging  technology companies (high-tech “start-up” firms), we spoke with venture  capital and law firm representatives who reported that start-ups, in  particular, often have less time and fewer resources for navigating the  immigration system, and the impact of employee immigration problems on  them can be substantial. Some founders of start-ups and venture capital  firms with whom we spoke reported that the skills required by small firms  and emerging companies in high-tech sectors are often extremely  specialized, and sometimes these firms cannot readily find a “second- choice” employee in the U.S. labor market. For example, one start-up  founder stressed that competition for “the best people” is fierce in “a high- growth, venture-backed business” where building “complex software  faster and better than companies that are orders of magnitude larger” is  critical to survival. In addition, foreign nationals seeking to found new  companies in the United States can face a unique set of difficulties. Two  lawyers we spoke with whose firms work with many emerging technology  companies in Silicon Valley described cases in which entrepreneurs  attempting to establish very early-stage technology start-ups were unable  to obtain H-1B or other work visas for themselves and either relocated the  project abroad or had to abandon the start-up.
section_title: Most Interviewed Companies Said the Cap Had Little Effect on R&D or Offshoring Decisions; However, Certain IT Services Firms Differed
paragraphs: When asked about how the H-1B cap affected their decisions on where to  locate their R&D activities and other operations, 15 of the 28 companies  who responded to these questions said the H-1B cap was not an important  factor in their decisions on the location of these activities. The 20 firms we  spoke with that conducted R&D were in a variety of industries—including  semiconductor and electronics manufacturing, pharmaceutical companies,  software publishing and financial services—and 7 of these 20 were in the  manufacturing sector. Several firms that conducted R&D reported that  their H-1B workers were essential to this work in the United States.  Furthermore, access to skilled labor from around the world was very  important to a number of the firms we interviewed; 15 of the companies  we spoke with had R&D centers or labs overseas, and 8 of these firms told  us that these centers or labs had been set up largely to access the skilled  workforce in that country. However, only four said the H-1B cap was an  important determinant in the creation of these overseas centers.  Respondents from several of the multinational companies we spoke  with—whether headquartered in the United States or not—regarded their  firms as global entities, and five said that their decisions to expand  overseas are primarily driven by the pursuit of new markets. In addition,  firms said many other factors are involved in such decisions, including the  cost of labor; access to a workforce in a variety of time zones; language  and culture; proximity to universities; and tax law.
While the majority of company officials we spoke to said they had not  moved work offshore due to the H-1B program or cap, several respondents  from one group of companies—IT services firms—told us they have  moved or would move work offshore as a result of the cap or changes in  the administration of the H-1B program. One large IT services firm that  had both an onshore staffing component and offshore outsourcing  component noted that in years when the H-1B cap prevented hiring all  the foreign workers sought, the company could locate a larger portion of  the work project overseas. Two IT staffing firms we spoke with—firms  that place H-1B workers at the worksites of client companies—said their  U.S. business relies heavily on the H-1B program because H-1B visa  holders are more willing to relocate around the country, and one noted  that H-1Bs accept lower wages than U.S. workers.
Several executives at IT staffing firms we interviewed noted that, since  issuance of a January 2010 Homeland Security memo, Homeland Security  is more aggressively enforcing a requirement that staffing firms be able to  provide evidence of an employer-employee relationship with the H-1B  worker they sponsor by, for example, having a contract with their clients  in place. Executives from staffing firms told us they often cannot have a  contract in place because they provide labor on short notice to their client  firms. As a result of the increased enforcement of this provision,  executives at one staffing firm told us that they no longer hired H-1Bs for  their staffing business, and executives at several other staffing firms  reported that they had ceased hiring new H-1B workers, hiring instead  only foreign nationals already in the country with a current H-1B visa.  Executives at some companies who already had an offshore location  reported expanding the portion of their work conducted overseas, and  others reported that they had either opened an offshore location to access  labor from overseas or were considering doing so.
Some researchers have noted that some IT services firms that conduct  offshore outsourcing and employ large numbers of H-1B workers offer  engineering and R&D services. Although 3 of the 10 IT services firms we  spoke with described themselves as conducting R&D, 2 of the 3 noted that  this R&D involved innovation while on-the-job. Some experts we spoke  with also noted that learning and technological innovation is often  attained on the job or through informal collaboration, as opposed to  through formal R&D efforts. Thus, while the movement of IT services  work offshore in response to the H-1B cap may not result in the direct  transfer of formal R&D, it may nonetheless result in movement of  innovation offshore.
section_title: Companies Also Cited Various Concerns about the Petition Review Process and Suggested Some Program Modifications
paragraphs: Companies we spoke with reported several concerns with the H-1B  petition adjudication process, including the amount of paperwork required  and the level of evidence requested during this process. Companies and  experts we spoke with suggested several program modifications that could  remedy some of these reported problems.
Increasingly burdensome adjudication process: Eighteen of the firms  we spoke with maintained that the review and adjudication process had  become increasingly burdensome in recent years, with many of these firms  complaining about the amount of paperwork they needed to provide as  part of the adjudication process. Further, eight firms—of all sizes and  across a range of industries—complained that the number of requests for  additional evidence from Homeland Security increased significantly in  recent years. Relatedly, in prior work, we suggested that Congress  consider streamlining the H-1B approval process by eliminating the  separate requirement that employers first submit an LCA to Labor for  review and certification, since another agency (USCIS) subsequently  conducted a similar review of the LCA. Three years after our  recommendation, in 2003, USCIS was moved under the newly formed  Homeland Security; however, Congress has not taken action to streamline  the process.
Inconsistencies in the adjudication process: Executives at several  companies we spoke with provided examples of what they viewed as  inconsistencies in the adjudication process. For example, one company  executive noted that the petitions it sends to one of Homeland Security’s  two processing centers are often processed more efficiently than the  petitions it sends to the other processing center. Another executive noted  that at times, “decisions on approving or denying the H-1B visa  applications seem arbitrary.” This executive provided an example of a  USCIS adjudicator who decided that the project for which the company  sought an H-1B worker did not require “specialty education,” but the  executive felt that if the adjudicator had contacted the client firm, they  could have easily seen that a specialist was required. Other firms noted  that some adjudicators ask for evidence that seems unnecessary. For  example, an immigration lawyer at a multinational pharmaceutical  company said that agency requests for evidence do not always appear to  be “thoughtful,” and cited a Request for Evidence that demanded a review  of the qualifications of an applicant who had received a science degree  from Oxford University.
Adjudication process not customized for different employers:  Several companies we spoke with complained that the adjudication  process is the same for all H-1B employers, irrespective of the employer’s  track record with the H-1B program. For example, the Immigration Policy  Manager for a large, household-name Fortune 100 company recounted  being asked to provide photographic evidence of its headquarters as part  of the Request for Evidence in the petition review process. As another  example, the Chief Executive Officer of a small software application  developer who had been using the H-1B program for over 10 years  recounted the frustration of interviewing 60 U.S. candidates before finding  3 candidates through international hiring, and then facing a vetting process  that questioned his effort to hire a U.S. citizen. At the same time,  Homeland Security staff we spoke with reported having to review large  stacks of paperwork to adjudicate a single petition.
Experts we spoke with suggested that Homeland Security consider  creating a risk-based adjudication process whereby businesses are ranked  on their experience with the program and past compliance issues. Such a  process could permit well-vetted businesses with a strong track-record of  H-1B regulatory compliance access to a streamlined process for petition  approval and reduced requests for evidence, thus reducing the burden to  firms of providing evidence, and would permit Homeland Security  investigators to focus their investigative efforts efficiently.
Rigidities in the lottery system: Several company executives, industry  representatives, and academic researchers we spoke with cited examples  of what they viewed as rigidities in the lottery system, especially in years  when the H-1B cap is hit early. Several industry representatives told us  that the lottery process does not allow their clients to rank their top  choices; as a result, firms do not necessarily receive approval for the most  desired H-1B candidates. Several companies we spoke with also raised the  issue that the annual allotment period does not allow firms to make their  hiring decisions in response to business needs throughout the year,  especially during years when the cap is hit early in the year. Some  company executives and researchers we spoke with suggested the  following:    a more efficient system would permit employers to rank their applications  so that they are able to hire the best qualified worker for the job in highest  need; and  to allow more flexible hiring of H-1B workers, Homeland Security consider  distributing the allocation of H-1B permits throughout the year (such as  quarterly) rather than annually.
Visas for emerging technology companies: Entrepreneurs and venture  capital firms we interviewed said that program rules can inhibit many  emerging technology companies and other small firms from using the H-1B  program to bring in the talent they need, constraining the ability of these  companies to grow and innovate in the United States. For example, for the  earliest stage ventures, when the person who needs the H-1B visa is the  entrepreneur, there is sometimes no “firm” in existence yet that can meet  legal criteria for employing H-1Bs. While it is not necessarily the role of the  H-1B program to provide work visas for foreign entrepreneurs, several  parties we spoke with discussed the risk of the United States losing its  advantage in high-tech entrepreneurship if U.S. immigration policy  undermines the ability and interest of new entrepreneurs to move to high- tech communities like Silicon Valley. Some venture capital firms and  businesses we spoke with suggested that, in order to promote the ability of  entrepreneurs to start businesses in the United States, Congress should  consider creating a visa category for entrepreneurs, available to persons  with U.S. venture backing.
Agency officials expressed reservations about the feasibility of GAO’s past  recommendation and the suggestions from experts and company  executives on improving the application process. Homeland Security  officials believed that Labor would be better suited to review the LCA  because Labor has specialized knowledge about the computation of  prevailing wages. Labor officials, however, conceded that their review of  the LCA is limited by statute, as discussed above. In regard to the potential  adoption of a customized adjudication process, Labor officials noted that a  strong track record of compliance with program rules does not guarantee  future compliance. Homeland Security officials also noted that  establishing a system for employers to rank their submitted petitions in  order of priority might increase the likelihood of fraud if it also increased  incentives for employers to submit applications for hypothetical workers  in order to capture a larger proportion of those selected for the lottery.  State officials raised questions about the logistics required for allocating  H-1B petitions throughout the year—for example, whether or how  employers would be permitted to resubmit petitions after receiving a  denial in one quarter, and whether such a system might result in more  employers being denied access to H-1B workers during peak seasons.
Homeland Security officials also noted two efforts currently under way to  streamline the application process for prospective H-1B employers.  Homeland Security is in the process of developing a product that would  allow it to use data from a private data vendor to automatically download  certain data on employers and update those data over time so that in the  future, employers may not have as heavy a burden in filing their petitions.  This product is currently being tested. Second, Homeland Security is  currently preparing a proposed rule, which is being reviewed and  considered within the agency, to allow employers to submit requests for   H-1B slots before submitting an LCA. This rule would spare employers that  were not chosen in the lottery from having to file an LCA and could also  reduce workloads for Labor. The officials did not know whether and when  a proposed rule would be published for comment and finalized.
section_title: Although Data Limitations Preclude Knowledge of the Total H-1B Workforce and Precise Tracking of the Cap, Characteristics of Those Approved to Be H-1B Workers Are Known
paragraphs: Data on the total number of H-1B workers in the United States are not  available because of limitations in agency data. In addition, although  Homeland Security is responsible for tracking the number of H-1B petitions  approved under the cap or the number of H-1B visas issued, it cannot  precisely do so. However, Homeland Security is currently taking steps to  address these limitations. Data on the annual cohort of people approved to  be H-1B workers (referred to as “approved H-1B workers” in this report)  offer some information on the characteristics of likely H-1B workers,  including their countries of birth, occupations, and education levels.
subsections: section_title: Limitations in Agency Data Systems Hinder Tracking the Cap and H-1B Workers Over Time, Though Homeland Security Is Working to Improve Its Systems
paragraphs: Although Homeland Security generally tracks the flow of likely H-1B  workers into the United States on an annual basis, it cannot determine the  size of the cumulative H-1B workforce because several agencies or  departments manage data on this population over time, and the systems  that capture the data are not easily linked. H-1B petition approvals are  captured in Homeland Security’s CLAIMS 3 data system, as are changes in  visa status for approved H-1B workers who are already residing in the  country at the time of approval. However, visas for H-1B workers living  abroad at the time of approval are captured by a data system that is  administered by State and not linked to CLAIMS 3. Further, information on  visa holders who actually enter or exit the United States is tracked via  Homeland Security’s United States Visitor and Immigrant Status Indicator  Technology (US-VISIT) program, which is not systematically linked to  CLAIMS 3. Because these data systems do not use a unique, person-centric  identifier for H-1B workers, Homeland Security cannot determine, for  example, how many approved H-1B workers living abroad actually  received an H-1B visa and/or ultimately entered the country. Similarly,  Homeland Security does not track H-1B workers after their visas expire,  and cannot readily determine if and when H-1B workers apply for or are  granted legal permanent residency, leave the country, or remain in the  country on an expired visa. The fact that electronic records from different  systems are not linked also results in unnecessary duplication of efforts.  For example, according to State officials, while State has some capacity to  query Homeland Security’s CLAIMS 3 database, its consular posts cannot  import data from CLAIMS 3 to their own data system, so State contractors  re-enter information from CLAIMS 3 manually into State’s data system.
Further, although Homeland Security is responsible for tracking the number  of H-1B petitions approved under the cap and the number of H-1B visas  issued, it does not maintain precise information on this. To implement the  statutory cap on H-1B visas, Homeland Security must take the necessary  steps to maintain an accurate count of the number of aliens subject to the  annual cap who are issued visas or otherwise provided nonimmigrant status  by the Immigration and Nationality Act. However, according to Homeland  Security officials, the department’s current processes do not allow them to  determine precisely when approvals reach the number set by the cap.  Instead, they stop accepting initial petitions for new H-1B workers that are  subject to the cap when they estimate that the number of approved petitions  is approaching the mandated limit. In fiscal year 2005, Homeland Security’s  Office of Inspector General found that USCIS exceeded the 65,000 cap limit  by about 7,000 approved petitions and recommended the agency maintain  more precise control over the number of H-1B visas issued. Although the  recommendation was closed by the Office of Inspector General in 2006,  Homeland Security officials concede they still cannot precisely count, in an  ongoing manner, petitions accepted under the cap despite several changes  in how the agency accepts, monitors, controls, and forecasts receipts for  submitted petitions subject to the cap. Further, officials noted that as long  as the process of submitting and adjudicating H-1B petitions remains the  same, they are unlikely to be able to provide a precise count of petitions  accepted under the cap.
The capability to better track the cumulative H-1B workforce and petitions  accepted under the annual cap may develop with the eventual completion  of Homeland Security’s program to modernize business processes and  information systems, although challenges remain. Homeland Security’s  “Transformation Program” is a multiprogram, multiyear effort, ongoing  since 2005, that includes a plan to implement an electronic I-129 petition,  with a unique identifier for each H-1B worker. Using this identifier,  Homeland Security would likely be able to share data with State and other  external partners. Homeland Security officials reported, for example,  that they are currently working with agencies that include Justice and  State to create a cross-reference table of agency identifiers for individuals  applying for visas. Ultimately, the table would capture each record for th e  same person and employer from all partner agency programs, such that  records for a specific individual can be merged under one unique person- centric identifier. When this occurs, it will be possible to identify who is the United States at any one point in time under any and all visa program USCIS plans to develop internal guidance for the electronic I-129 petition  over the next 2 years. However, according to previous GAO reports,  Homeland Security’s Office of Inspector General, and Homeland Security  officials, the agency faces challenges finalizing and moving ahead with  implementation of the program.   in  s.
section_title: Most Approvals for H-1B Workers Were for Workers from India or China and for Technology Positions
paragraphs: Between fiscal year 2000 and fiscal year 2009, the majority of approved   H-1B workers (initial and extensions for both employers subject to the cap  and cap-exempt employers) were born in Asia. Over the last decade, the  top four countries of birth for approved H-1B workers were India, China,  Canada, and the Philippines. Across all 10 years, about 64 percent of  approved H-1B workers were born in these four countries, with the largest  group from India (see fig. 9).
Over the same period, more than 40 percent of approved H-1B workers  (initial and extensions for both employers subject to the cap and cap- exempt employers) were approved to fill occupations in systems analysis  and programming. The next-highest occupational category was college and  university education, which represented about 7 percent of H-1B  approvals, as shown in figure 10.
section_title: Many Approved H-1B Workers Were Already in the United States and Applied to Stay Permanently
paragraphs: As compared to fiscal year 2000, in fiscal year 2009, approved H-1B  workers (initial and extensions for both employers subject to the cap and  cap-exempt employers) were more likely to be living in the United States  than living abroad at the time of their initial application, to have an  advanced degree (master’s, professional, or Ph.D.), and to have obtained  their graduate degrees in the United States. From fiscal year 2000 to fiscal  year 2009, the proportion of newly approved H-1B workers that were  already living in the United States increased from 43 to 62 percent. Many  of these workers are likely to have been on student or another visa status.  In 2000, 40 percent of approved H-1B workers (initial and extensions)  possessed an advanced degree (master’s, professional, or Ph.D.), which  increased to 59 percent by fiscal year 2009 (see fig. 11). One reason for this  increase may be the H-1B Visa Reform Act of 2004, which allowed for an  additional 20,000 approvals each year for foreign workers holding a  master’s degree or higher from an American institute of higher education.  Since then, the proportion of approved H-1B workers who graduated with  a master’s degree from an American institution of higher education  increased from 29 to 36 percent of all approved workers—including initial  petitions and visa extensions.
These findings are consistent with previously discussed findings that there  has been an increase in the number of approved H-1B workers receiving  advanced degrees from U.S. universities, as well as those who are already  residing in the United States at the time of H-1B visa approval. This in turn  suggests that, in general, the approved H-1B population may include more  recent graduates, who are younger and more highly educated, as compared  to their U.S. citizen counterparts in similar occupations. In turn, the U.S.  citizen population in similar occupations may include older, more  experienced workers.
Finally, data on a cohort of approved H-1B workers whose petitions were  submitted between January 1, 2004, and September 30, 2007, (including initial  petitions from both employers subject to the cap and cap-exempt employers)  indicate that a substantial proportion subsequently applied for permanent  residence in the United States. Specifically, from a cohort of 311,847 approved  H-1B petitions, we were able to obtain unique matches for 169,349 petitions  from Homeland Security’s US-VISIT data. Of these, GAO found that 56,454 of  the individuals listed on these H-1B petitions had submitted a petition for  permanent residence by 2010. Thus, at least 18 percent of the total cohort had  applied for permanent residence by 2010. Further, about half of those that  applied had been approved for permanent residence by 2010, 45 percent were  still pending, and just 3 percent had been denied.
section_title: The Impact of Raising the H-1B Cap on the U.S. Workforce Is Difficult to Forecast Due to Complex Economic Factors
subsections: section_title: The Impact of Raising the Cap Is Difficult to Estimate
paragraphs: In addition to lack of data on the total H-1B workforce previously  discussed, the potential impact that raising the H-1B cap would have on  the wages and employment of U.S. workers is difficult to estimate because  of complex economic relationships. On the one hand, if the H-1B program  successfully provides needed skills for the U.S. economy, economic theory  suggests that the program should contribute to long-run economic growth,  which is beneficial for all workers. For example, additional skilled labor  could increase innovation and productivity, potentially leading to  improved competitiveness of U.S. businesses, higher wages in aggregate,  and lower prices on goods and services purchased by American  consumers. On the other hand, certain groups of U.S. workers may  experience lower wages and employment as a result of the inflow of H-1B  workers. Furthermore, changes in the wages and employment of both U.S.  workers and H-1B workers reflect both changes in demand for labor and  changes in the supply of labor, making it difficult to determine the effect  that changes in the number of H-1B workers would have on outcomes for  U.S. workers.
Although demand for H-1B workers seemed to fluctuate in concert with  broad economic indicators, relationships still cannot be inferred. As  shown in figure 12, the number of submitted H-1B petitions has generally  followed overall employment growth in the U.S. economy. This appears  consistent with economic theory that suggests that businesses require  additional labor during periods of economic growth, so employers will  likely submit more H-1B petitions during these periods. At the same time,  wage rates and employment levels for U.S. workers generally rise during  periods of economic growth. Therefore, the number of H-1B petitions  tends to rise when wages and employment for U.S. workers are rising  (although the number of approvals is limited by the H-1B cap), and to fall  when wages and employment for U.S. workers are falling. However, this  relationship does not reveal what the wage rates and employment rates of  U.S. workers would have been in the absence of H-1B workers.
Due to these complex economic relationships, coupled with limitations in  data on the total H-1B workforce discussed previously, we did not attempt  to forecast the impacts of prospective changes in the H-1B cap on the U.S.  labor force.
section_title: Employment and Earnings Picture Was Mixed for Professions Absorbing H- 1Bs
paragraphs: While GAO did not attempt to forecast the impacts of prospective changes  in the H-1B cap, we examined 10 years of retrospective data on the  employment, unemployment, and earnings of U.S. workers in the three  occupations that absorbed the largest proportion of H-1B workers relative  to the stock of U.S. workers in these occupations. The three occupations  with the highest number of H-1B approvals relative to the number of U.S.  workers in that occupation were (1) systems analysts, programmers, and  other computer-related workers;  (2) electrical and electronics engineers;  and (3) college and university educators. For example, among systems  analysts, programmers, and other computer-related workers aged 18 to 50,  the number of approved H-1B petitions (initial and extensions) was 10  percent of the total stock of U.S. citizen workers in private sector jobs in  this occupation in calendar year 2008.
Our analysis of these three occupations generally revealed a mixed  earnings and employment picture for U.S. workers in professions  absorbing H-1Bs. (See appendix III for additional details.)
With respect to median earnings, we found that U.S. workers in all three  occupations, in every year, had significantly higher median earnings levels  compared to all professional U.S. workers.
With respect to real earnings growth, systems analysts, programmers, and  and other computer-related workers had significantly higher real earnings  growth compared to all professional workers; in contrast, for electrical  and electronics engineers, real earnings growth was not significantly  different from that for professional workers, and for college and university  educators, real earnings growth was relatively flat over the decade.
Unemployment rates for both (1) systems analysts, programmers, and  other computer-related workers and (2) electrical and electronics  engineers were relatively cyclical; in contrast, the unemployment rate for  college and university educators was somewhat less sensitive to business  cycle fluctuations over the decade.
Employment levels (i.e., the number of workers employed) for electrical  and electronics engineers declined significantly over the decade;  employment levels for systems analysts, programmers, and other  computer-related workers were essentially unchanged; and employment  levels for college and university educators grew significantly over the  decade.
section_title: H-1B and U.S. Citizen Workers: Salary Differences
paragraphs: To examine more closely whether H-1B workers are being paid salaries  that are comparable to U.S. workers, we examined data on salaries for the  three occupations that absorbed the largest proportion of H-1B workers  relative to the stock of U.S. workers in 2008, and compared this to data  on the reported salaries listed by the employer on H-1B petitions. A  comparison of median annual salaries reveals that for systems analysts,  programmers, and other computer-related workers—the largest of the  three occupational categories we examined—H-1B workers tended to earn  less than U.S. workers; however, some of the salary gap appears to be  explained by differences in ages, which may reflect differences in the  extent of their work experience. As shown in table 1, which summarizes  the median reported earnings of H-1B and U.S. workers by age and  occupation, among systems analysts, programmers, and other computer- related workers, differences in median reported earnings between H-1B  workers aged 20 to 29 and U.S. workers of the same age were not  statistically significantly different, and the same was true for workers aged  30 to 39; however, H-1B workers aged 40 to 50 had median reported  earnings that were significantly lower than the median earnings of U.S.  workers in this occupation. Among electronics and electrical engineers,  we did not find significant differences in median earnings of approved   H-1B workers and U.S. workers, overall and within the age groups we  examined. Among college and university educators, differences in  reported earnings between H-1B workers and U.S. workers were not  statistically significant except among younger age groups in which the   H-1B workers had higher reported earnings than U.S. workers in the same  age category; however, we could not account for all factors that might  affect salary levels.  (See the discussion “Limitations of Wage  Comparisons” in appendix I for more information.)  For all groups,  differences in other factors, such as skill level, might explain some of the  remaining salary differences; however, a lack of data on these factors  precludes our analysis of them.  In addition, differences in factors such as  geographic location, size of firm, and industry, as well as level of  education, which may also affect salary differences, are not controlled for  here due to data limitations. For example, if certain groups of workers  are more heavily concentrated in high-cost parts of the country, this will  be reflected in the median wage. (For additional analyses comparing U.S.  workers with approved H-1B workers, see appendix II.)
In an attempt to better understand these results, we interviewed academic  researchers and labor advocates who have studied the impact of H-1B  workers on particular segments of the workforce. These experts and  advocates provided examples of several specific segments of the workforce  for which they believe the H-1B program has had negative impacts.
Because H-1B workers tend to be younger (with less potential work  experience) than their U.S. counterparts who tend to be older (with more  potential work experience), some labor advocates we spoke with argued  that the H-1B program detrimentally impacts older IT professionals.  Several researchers and labor advocates have stated that technology  companies seek to replace older, American IT workers with cheaper,  younger workers that are freshly supplied through the H-1B program in  order to lower costs, and that IT companies have no incentive to retain  and retrain older workers with the latest skills, since the H-1B program  provides ready access to young workers with cutting-edge training. While  companies could use any young, skilled workers to lower their labor costs  in this manner, advocates argue that the H-1B program facilitates the  practice of displacing older IT workers because it provides an inflow of  new workers in IT fields that is much larger than would otherwise be  available to U.S. employers. The analysis presented here does not provide  a test of this theory because it does not identify what the wages of older  U.S. IT professionals would have been in the absence of the H-1B program,  nor does it account for the myriad factors affecting wage, for which we  lack data.
Three researchers we spoke with expressed concern about the  disincentives that U.S. students face in entering science, technology,  engineering, and mathematics (STEM) fields. For example, one  disincentive is the duration of postdoctoral positions. Data show that since  the 1960s, postdoctoral positions—which are generally exempt from the H- 1B cap—have increased in length, with the largest increase in biological  sciences. One researcher posited that the increasing length of  postdoctoral positions, especially in the biomedical fields, is due in part to  the presence of large numbers of foreign nationals who are willing to work  in these low-paid positions for many years. For foreign nationals, these  postdoctoral positions may offer an entrée into the U.S. labor market, and  the salaries may also compare well to the opportunities available in their  home countries.
Testimonial evidence also suggests that U.S. software programmers,  particularly those seeking IT consulting jobs, may have been detrimentally  affected by the significant presence of H-1B workers and, in particular, by  the presence of certain staffing companies. One labor advocate we spoke  with stated that staffing companies that farm out H-1B IT workers to other  companies are abundant in the Northeast region of the country, and their  presence has dramatically reduced the availability of jobs for U.S. software  programmers in that region. Labor investigators we spoke with also noted  the concentration of H-1Bs in the IT consulting industry, particularly in the  Northeast region. These investigators noted that the bulk of the  complaints they receive in this region pertain to staffing companies. In  addition, Labor investigators told us that some staffing companies at times  will pass an open position amongst themselves, rather than making a job  opening known to the workforce at large. For example, if one staffing  company is contacted with a request for a software programmer and does  not have a worker with the appropriate skillset, this firm may— unbeknownst to the firm that is seeking the worker—“subcontract” the job  out to a second staffing company who does have a worker with the  appropriate skillset—and the first staffing company might take a cut of the  wages received.
section_title: Limited Agency Oversight and Coordination and Changes to the H-1B Program Have Weakened U.S. Worker Protections
subsections: section_title: Responsibility for Worker Protection Is Limited and Dispersed among the Many Administering Agencies, and Hampered by Restrictions on Their Ability to Collaborate
paragraphs: Responsibility for the protection of workers with regard to the H-1B visa  program is shared by four departments and their respective divisions. By  virtue of their specific and often cordoned responsibilities, however, there  is only nominal sharing of the kind of information that would allow for  better employer screening or more active and targeted pursuit of program  abuses. Once a visa-holder is employed, divisions within Labor, Homeland  Security, and Justice may pursue enforcement of the H-1B program  requirements in accordance with their broader responsibilities for  enforcing labor or immigration laws. However, their work is largely  complaint-driven, and information sharing among them, or with offices  that must screen H-1B applications, is also limited. Table 2 summarizes  agency oversight responsibilities and limitations, which are further  elaborated in the following pages.
Labor’s Employment and Training Administration. While  Employment and Training reviews the LCA form submitted by a  petitioning employer, this review is limited by law to looking for missing  information and obvious inaccuracies. For example, an employer may  have failed to checkmark all the boxes for attesting to his or her  willingness to comply with program requirements. While Labor’s review  catches some administrative errors made by applicants, it does not check  the validity of the information on the LCA. Consequently, the review is not  intended to identify potential employer violations such as work sites that  do not exist or lack of compliance with the attestations made on the LCA.  This review is primarily conducted electronically with officials reviewing  the information flagged by the electronic system as problematic. Any  greater scrutiny by Employment and Training is limited by law.
Homeland Security’s U.S. Citizenship and Immigration Services.  Adjudicators with USCIS conduct a review of both the employer’s application  and the foreign worker as a job candidate. Specifically, Homeland Security  reviews two documents for consistency: the LCA submitted originally to  Labor for review, and the I-129 petition, which is submitted by businesses to  Homeland Security and generally contains correlating information. In  addition to reviewing for consistency, USCIS adjudicators explained that they  take steps to verify the facts provided for both the employer and the  prospective worker—for example, by requesting additional information from  the employer. USCIS’s adjudicators do not receive information regarding  suspicious or problematic employers from Labor’s Employment and Training  Administration that Labor analysts may have become aware of during their  review of the LCA because Labor does not have a formal mechanism for  sharing such information with Homeland Security.
Department of State. State plays a role in the H-1B program by  interviewing and potentially issuing visas to H-1B candidates living abroad,  whose petitions were approved by Homeland Security. State conducts its  own review of the H-1B petitioner and documentation pertaining to his or  her employer by comparing information gleaned from interviews against  basic information in the LCA and I-129 petition, such as the name of the  petitioner and the foreign worker. However, official department guidance  instructs consular officials not to question the petition approvals made by  Homeland Security when making their decision on the visa application  without having obtained new evidence. State guidance stipulates that a  petition can only be sent back when there has been a clear error  committed in adjudicating the I-129 petition or new evidence is submitted  that contradicts Homeland Security adjudicators’ decisions. Officials noted  that there is a high threshold for the identification of a clear error and this  rationale is almost never used. State has, however, recommended 1,744  revocations in fiscal year 2009 based on new evidence. As a general rule,  State consular officers treat information provided to and reviewed by  Homeland Security on business establishments, relationships, and  individual qualifications as bona fide.
subsections: section_title: Limited Enforcement
paragraphs: Labor’s Wage and Hour Division. Labor’s Wage and Hour investigates H- 1B complaints primarily related to improper wage payments and failures to  notify workers that a company intends to hire an H-1B worker. However, its  ability to enforce worker protections with regard to the H-1B program is  limited. Although the Secretary of Labor has authority to initiate  investigations, Wage and Hour reported that it had never initiated an  investigation under this authority. Officials explained that they rarely  proactively investigate companies for H-1B violations, and that they may  generally only act on formal complaints. Moreover, by law, investigations  can only be initiated from information obtained from an aggrieved or credible  party outside of Labor.  Further, Labor officials told us they have interpreted  this restriction to include information from Homeland Security as well. As a  result, Labor’s Wage and Hour could not initiate a complaint based on any  information it might receive from Homeland Security, such as information on  potential abuses that Homeland Security might glean from its review of the I- 129 petition. In a prior report, GAO suggested that Congress remove these  legal restrictions, but Congress has yet to take action.
While the majority of complaints received by Labor have been reported by H- 1B workers, very few complaints are filed. In 2009, only 664 out of 51,980  companies approved to hire new or extending H-1B workers had complaints  against them. According to agency officials, H-1B workers are likely to be  reluctant to file complaints against employers for fear that the company might  be disbarred, which in turn could result in the complainant and fellow H-1B  workers at the company losing their jobs and potentially having to leave the  United States. Further, investigators told us that even after an H-1B worker  files a complaint, the H-1B worker may not cooperate in the investigation for  fear of similar repercussions. In these instances, investigators are sometimes  unable to complete the investigation. The relatively small number of H-1B- related complaints in 2009 nevertheless resulted in Labor requiring companies  to pay over $10 million in unpaid wages to 1,202 workers and $739,929 in civil  monetary penalties (see table 3).
Labor’s ability to enforce worker protections under the program is also  hampered by obstacles cited by officials at both headquarters and in Wage  and Hour’s Northeast Regional Office, which receives the greatest number  of H-1B complaints:  First, with the introduction in June 2009 of the automated “iCERT” system  maintained by Employment and Training, Wage and Hour stated that they  can no longer access the database of LCAs. Prior access had allowed  investigators to quickly assess the accuracy of the attestations made by an  employer. Without this access, officials stated that they must request the  LCA from the employer, which can increase the time and resources  required to conduct an investigation. Employment and Training reported  that improved access to the iCERT System is under development and  planned for implementation in April 2011.
Second, Wage and Hour has limited ability to persuade employers to  cooperate with investigations. The fine it can levy against employers for  not cooperating is far less than the potential penalty for a finding of  noncompliance with the terms of the program. Investigators noted that  when employers do not cooperate, it can take them months to obtain the  requested paperwork, which essentially stalls the time-sensitive  investigation.
Third, Wage and Hour lacks subpoena authority to obtain such records  directly from the employer. In contrast, Wage and Hour, as well as  Employment and Training, have subpoena power for other labor  protection programs they administer, such as under the Fair Labor  Standards Act and the Migrant and Seasonal Agricultural Worker  Protection Act. According to Wage and Hour officials, subpoena power  increases cooperation from companies and is the most effective way to  speed up investigations, since companies could face harsh penalties, such  as debarment, for not cooperating. The Department of Justice also has  subpoena power for its investigations related to the H-1B program.  Justice officials we spoke with noted that while they rarely have to invoke  subpoena power in their investigations, generally employers are aware of  the subpoena power and are therefore more likely to comply with Justice’s  requests for records.
Homeland Security’s Directorate of Fraud Detection and National  Security. In its capacity to investigate immigration fraud, FDNS has  recently introduced some proactive enforcement for the H-1B program  through several random investigations into temporary visa programs.  Through a Benefit Fraud and Compliance Assessment (BFCA), Homeland  Security examined 246 H-1B petitions for possible violations. The BFCA  found that 21 percent of H-1B petitions involved fraud or technical  violations. Examples of fraud include cases in which businesses listed on  the LCA and I-129 did not exist; educational degrees were found to be  fraudulent; signatures were forged on supporting documents; and H-1B  workers were performing duties or receiving payment significantly  different from those described in the applications.
As a result of the high rate of fraud identified in the BFCA, Homeland  Security launched what it calls its Administrative Site Visit and Verification  Program—an ongoing initiative to visit work sites of H-1B-hiring companies  considered to be at a higher risk for abusing the program, according to  officials. During fiscal year 2010, USCIS oversaw 14,433 H-1B site  inspections, which resulted in 1,176 adverse actions. Such actions can  include the revocation or denial of benefits, and may involve referral of a  case for criminal investigation. FDNS is continuing to evaluate this  initiative and refine the indicators it uses to identify groups of high-risk  companies.
Department of Justice’s Office of Special Counsel. Justice’s Office of  Special Counsel also conducts investigations; but its enforcement abilities  are also limited. Justice’s jurisdiction limits it to pursue charges related to  unfair immigration-related employment practices, such as discriminatory  hiring or firing. For example, such charges generally allege that an H-1B  worker was hired in place of a U.S. worker, or that a company is using  discriminatory hiring practices that put U.S. workers at a disadvantage,  such as explicitly advertising for an H-1B worker.
Justice receives and investigates few charges related to the H-1B program  (at most 70 per year over the last 5 years with the number decreasing) and  reported that their ability to enforce the law depends on the willingness  and ability of U.S. workers to complain. Justice officials explained that  the low number of charges they receive is likely because U.S. workers are  often unaware that an employer intends to or did hire an H-1B worker. For  example, although employers are supposed to post a public statement  declaring their intention to hire an H-1B worker, the statement might be  posted in a lunch room where it may or may not be seen by affected  employees. Further, Labor investigators reported that many of the  companies they investigate do not comply with requirements to post  notice. In contrast, Labor requires applicants for other temporary visa  programs, such as the H-2A program, to display such postings on a  centralized Web site that is managed by Labor. Justice officials noted that  the lack of a centralized Web site makes it difficult for U.S. workers to  learn that U.S. employers are hiring H-1B workers and also for Justice to  monitor the compliance of companies with antidiscrimination law,  especially those operating offshore.
Justice informally shares information on a periodic basis with Labor and  Homeland Security when it receives information about potential abuse  that does not fall under its jurisdiction. However, there is no formal  mechanism in place to exchange information with these other agencies,  although officials explained that some attempts to arrange information- sharing agreements between Justice and these agencies have been made in  the past. When Justice has referred cases that fell within Labor’s  jurisdiction, Justice officials told us they were not generally made aware of  the outcomes of these referrals. Although Justice accepts referrals from  other agencies, officials reported only receiving one referral from Labor  related to the H-1B program.
Department of State. If or when State officials learn of an employer  potentially violating program requirements, unlike other agencies, State  may act as an aggrieved party on behalf of an H-1B worker and file a  formal complaint with Wage and Hour regarding the business. For  example, agency officials noted that during consular interviews with  spouses of H-1B workers attempting to enter the United States, the  consular official may uncover potential abuses by the H-1B worker’s  employer and will then file a complaint with Wage and Hour. However,  such incidents are limited in number, with an average of 160  recommendations per year since 2005.
section_title: Lack of Accountability Provisions for Staffing Companies Also Hinders Enforcement
paragraphs: The laws governing the H-1B program do not include explicit provisions to  hold employers that obtained the H-1B worker through a staffing company  accountable to the program requirements that are applicable to the  employer who applied for H-1B visas on behalf of foreign workers. As  previously noted, some staffing companies complete and submit to Labor  an LCA as the employing company, but then contract the H-1B worker out  to another employer. At times, that employer may contract the H-1B  worker out again, creating multiple middlemen according to officials (see  fig. 13). Regardless of where the H-1B worker is ultimately employed,  Wage and Hour officials told us that only the staffing company, as the  employer who has petitioned for the visa and made the attestations to  comply, is technically accountable and ultimately liable for complying  with program requirements. They explained that the contractual  relationship itself does not transfer the obligations of the contractor for  worker protection to any subsequent employers. Especially in instances in  which multiple middlemen are involved, it is difficult to expect the staffing  companies themselves to be accountable for the actions of an employer up  to three or four employers removed.
Wage and Hour investigators reported that a large number of the  complaints they receive were related to the activities of staffing  companies. In fact, investigators from the Northeast region—the region  that receives the highest number of H-1B complaints (see fig. 14)—said  that nearly all of the complaints they receive involve staffing companies  and that the number of complaints are growing. However, the precise  number of complaints related to staffing companies is not known because  Labor does not track this information in its complaint data. The most  frequent type of violation resulting from a complaint is that the employer  failed to pay the required wage rate. Other frequent violations identified as  a result of complaints include the failure of the employer to post notice  that they intend to hire an H-1B worker and the failure to comply with the  attestations made in the LCA (see table 4).
Complaints received by Wage and Hour pertaining to staffing companies  generally relate to the payment of H-1B workers, according to  investigators. Officials told us that the most common complaint associated  with staffing companies pertained to unpaid “benching”—when a staffing  company does not have a job placement for the H-1B worker and does not  pay them. In these instances, a staffing company sometimes asks the H-1B  worker to conduct their own job search or to take an unpaid leave until  the company identifies a client. For example, one investigator described  how one employer maintained a house for its unemployed H-1B workers,  and instructed them to conduct their own Internet searches for a job  placement. In another case, Wage and Hour found that a staffing company  forced employees to go on leave when it did not have jobs for them and  boarded them in a guesthouse while they were unemployed. At times,  employees are unaware of their right to receive payment during these  “benched” time periods which, according to one complainant, lasted as  long as 13 months. Investigators said that the problem of unpaid benching  has become more severe with the economic downturn as staffing  companies have fewer jobs in which to place H-1B workers. Instead, they  may “stockpile” the workers in anticipation of an economic recovery.
In investigating complaints related to staffing companies, investigators  often identify additional violations of the attestations on the LCA. For  example, Labor officials noted that in 90 percent of their investigations  related to staffing companies, the hiring company did not post notice of  the filing of the LCA indicating the intention to hire an H-1B worker. In  some instances, according to these officials, the subsequent employer may  not even know that the contracted worker is an H-1B worker, much less  be aware of any requirements associated with the visa—such as the  requirement for employers to post notice of their filing of an LCA. In  addition, in some instances workers procured by staffing companies were  either not working for the employer listed or not performing the duties  described on the LCA.
Some attempts have been made to control the use of staffing companies in  other visa programs and in the H-1B program. For example, the L-1 Visa  Reform (Intracompany Transferee) Act of 2004 essentially barred staffing  companies—whose main revenue source is providing labor-for-hire—from  receiving L-1 visas. However, according to experts we interviewed, some  staffing companies avoided this legal restriction by differentiating  themselves from staffing companies by describing themselves as “IT  solutions” companies. In addition to providing labor-for-hire, such  companies sell the development of a product, and therefore are not barred  from the use of L-1 visas. Additionally, in January 2010, Homeland Security  issued a memo on determining when there is a valid employer-employee  relationship between a staffing company and an H-1B worker for whom it  has obtained an H-1B visa. Whether there is such a relationship depends  largely on the right of a staffing company to control the manner and means  by which the H-1B nonimmigrant works. However, officials indicated that  it is too early to know if the memo has improved compliance with program  requirements.
section_title: Changes to Program Legislation Have Diluted Worker Protections
paragraphs: Changes to the H-1B program over time have weakened U.S. worker  protections related to the (1) temporary nature of the program, (2) pool of  H-1B workers eligible for H-1B status, and (3) cap.
subsections: section_title: Ability to Seek Permanent Residency While on Temporary Visa and Extension Periods
paragraphs: Since the 1990s, the law has allowed H-1B workers to pursue permanent  residency in the United States and to remain in the country for an unlimited  period of time while their permanent residency application is pending. The  Immigration Act of 1990 removed the requirement that H-1B visa applicants  have a residence in a foreign country that they had no intention of  abandoning. In addition, H-1B workers were able to apply for permanent  status and eventually to obtain an unlimited number of annual extensions  as long as they file an LCA for permanent residency at least 1 year prior to  submitting the final application for an extension of the H-1B visa.
As a result of these legislative changes, the number of H-1B workers in the  workforce has likely increased. As noted elsewhere in this report, many H- 1B workers apply for green cards. In fact, among a cohort GAO reviewed,  at least 18 percent applied for green cards within 6 years or less of the  start date of their H-1B visas. Although the employment-based permanent  residency applications take a number of years for a decision, the amount  of time varies by home country, with approvals of employment-based  permanent visas for skilled-worker categories taking the longest for  citizens from China, India, and Mexico.  An H-1B worker from one of  these countries could remain in the United States for over a decade before  obtaining a green card.
section_title: Broadened Criteria for Worker Qualifications
paragraphs: Legislative changes have broadened the skill requirements for H-1B  workers. The original H-visa program, established under the Immigration  and Nationality Act in 1952, authorized visas for aliens with a residence in  a foreign country that the alien had no intention of abandoning, who were  of distinguished merit and ability, and were coming to the United States to  perform temporary service of an exceptional nature requiring such merit  and ability. However, in 1990, besides removing the foreign residence  requirement, the original language was replaced with language authorizing  H-1B visas for aliens coming temporarily to the United States to perform  services in a “specialty occupation.” A specialty occupation was defined  as one that required a theoretical and practical application of a body of  highly specialized knowledge, and at a minimum, a bachelor’s or higher  degree in the specific specialty (see app. V). This increased the pool of  eligible workers to include a wider range of skill levels.
Labor’s application data show that H-1B workers are often not paid wages  associated with the highest skills in their fields. Specifically, these data  show that over half (54 percent) of the workers with approved LCAs from  June 2009 through July 2010 were categorized as entry-level positions and  were paid at the lowest pay grades allowed under the prevailing wage  levels (see table 5). This pay grade is designated for jobs needing a basic  understanding of duties and the ability of the worker to perform routine  tasks that require limited judgment. In comparison, 6 percent of approved  applicants whose wages were reported on the LCA were paid within the  top pay grade designated for workers that requires sufficient experience  and a high level of independent judgment. However, such data do not, by  themselves, indicate whether H-1B workers are generally less skilled than  their U.S. counterparts, or whether they are younger or more likely to  accept lower wages.
In contrast to the H-1B visa program, temporary visa programs in other  countries take steps to identify foreign workers with skills that are in short  supply. For example, Australia has a system in which applicants receive  points for certain types of qualifications that are in short supply in the  Australian economy. Those with the highest number of points are granted  visas to enter. The United Kingdom uses a committee comprised of five  independent economists to identify shortages in particular occupations.  Canada has a pilot temporary program under way that also attempts to  identify specific jobs where shortages exist and skills are needed.
The U.S. permanent visa program also does more to assure that the skills  of the foreign worker are not readily available state-side by, in most cases,  requiring the employer who sponsors the green card applicant to attest  that it was not able to find a comparably skilled U.S. applicant.
section_title: Exemptions to the Cap and Alternative Visas
paragraphs: While providing employers greater access to foreign labor, exemptions to  the H-1B cap and the existence of other visa programs for temporary  workers have increased their numbers far beyond the cap. With universities,  nonprofit organizations that conduct research, and governmental research  organizations able to hire an unlimited number of H-1B workers through  exemptions, many more H-1B workers have entered the United States each  year than the annual numeric limit of 65,000 imposed by the cap. For  example, 87,519 workers (initial and extensions) in 2009 were approved for  visas to work for 6,034 cap-exempt companies. In addition, company  executives reported that as an alternative to the H-1B visa, companies use  the L-1 visa—which allows foreign workers to relocate to a company’s U.S.  office after having worked abroad for the company for at least 1 year. As  previously noted, between 2000 and 2008, the number of foreign workers  issued L-1 visas—which are not subject to a cap—has increased by more  than 50 percent. As noted earlier, Homeland Security currently does not  have the capability to determine the cumulative H-1B workforce, such that  the effect on U.S. workers can be assessed. Whether or not Homeland  Security’s Transformation Program will address this problem remains to be  seen.
section_title: Conclusions
paragraphs: In creating the H-1B visa program, Congress sought to strike a difficult  balance between satisfying the needs of a wide variety of businesses for  high-skilled foreign labor while protecting access to jobs and appropriate  compensation for U.S. workers. The initial temporary nature of the  program and the annual cap were key tools to protect U.S. workers. Over  its history, however, Congress has made numerous changes to the  program, including broadening the eligibility requirements and allowing  for exemptions to the cap and for H-1B workers to pursue long-term  residency. The result is that, today, the number of H-1B workers approved  to enter the United States each year greatly exceeds the numeric limit  established by the cap, and the majority of applicants are categorized as  entry-level. Moreover, a substantial proportion appears to remain in the  country beyond the 6-year visa period in pursuit of permanent residency.  Homeland Security, faced with challenges in administering a program  managed in part by four different federal agencies, has difficulty tracking  the cap and cannot readily determine how many H-1B workers are  currently in the United States or how many stay after their visas expire.  Lack of information on the total H-1B workforce makes it impossible to  understand the long-term impact of the program and leaves the program  vulnerable to fraud and abuse—a known issue in this program.
Restrictions on agencies’ abilities to enforce program requirements and  coordinate with one another widen the risk of fraud and abuse, and  undermine efforts to enforce worker protections. Restrictions on sharing  and leveraging information between and within federal agencies likely  inhibit the pursuit of worker allegations of abuse and allow some labor  abuses to go undetected. The involvement of staffing companies, whose  share of H-1B workers is not precisely known but is likely not trivial,  further weakens enforcement efforts because the end-user of the H-1B  worker is not liable for complying with labor protection requirements.
At the same time, many members of the business community we  interviewed cited their own frustrations with the ability of this program to  serve their needs for high-skilled labor. The one-size-fits-all application  process wastes business and government resources in compiling and  reviewing paperwork on well-vetted companies with years of experience  in the program. The lottery system does not permit companies to prioritize  their candidates, and as a result, coveted H-1B slots may not be allocated  to companies’ top candidates. The annual application cycle hinders  flexibility in hiring, prompting some companies to prematurely petition for  candidates instead of holding out for better ones in years when the cap is  hit early. Moreover, start-up companies, which some argue are the  backbone of innovation in the United States, cannot use the H-1B visa for  their employees until their company is fully established.
In an era when companies are competing in a global market for cutting- edge skills, the H-1B program plays an important role. As currently  structured, however, the program may not be used to its full potential and  may be detrimental in some cases. Some improvements can be made  through executive actions by the agencies overseeing the program.  However, balancing the needs of the economy for high-skilled foreign  labor and protecting the employment and wages of current U.S. workers is  a policy matter for Congress. Certainly there are no easy solutions, but  data we present suggest that the program may continue to fall short and  raise difficult policy questions. Such questions include the appropriateness  of the current qualifications for H-1B workers, the use of H-1B visas as a  bridge to permanent residence, the involvement of staffing companies in  the H-1B program, and exemptions from the cap. As Congress considers  immigration reform in consultation with diverse stakeholders and experts,  and as Homeland Security moves forward with its modernization efforts,  this is an opportune time for Congress to review the goals and purpose of  the H-1B program and re-examine its key provisions.
section_title: Matters for Congressional Consideration
paragraphs: To ensure that the H-1B program continues to meet the needs of  businesses in a global economy while maintaining a balance of protections  for U.S. workers, Congress may wish to consider reviewing the merits and  shortcomings of key program provisions and making appropriate changes  as needed. Such a review may include, but would not necessarily be  limited to  the qualifications required for workers eligible under the H-1B program,    exemptions from the cap,  the appropriateness of H-1B hiring by staffing companies,  the level of the cap, and  the role the program should play in the U.S. immigration system in  relationship to permanent residency.
To reduce duplication and fragmentation in the administration and  oversight of the H-1B application process, consistent with past GAO  matters for congressional consideration, consider eliminating the  requirement that employers first submit a Labor Condition Application  (LCA) to the Department of Labor for certification, and require instead  that employers submit this application along with the I-129 application to  the Department of Homeland Security’s U.S. Citizenship and Immigration  Services for review.
To improve the Department of Labor’s ability to investigate and enforce  employer compliance with H-1B program requirements, consider granting  the department subpoena power to obtain employer records during  investigations under the H-1B program.
To help ensure the full protection of H-1B workers employed through  staffing companies, consider holding the employer where an H-1B visa  holder performs work accountable for meeting program requirements to  the same extent as the employer that submitted the LCA form.
section_title: Recommendations for Executive Action
paragraphs: Based on our review, we are making four recommendations.
We are making the following two recommendations to the Secretary of  Homeland Security:  To help ensure that the number of new H-1B workers who are subject to  the cap—both entering the United States and changing to H-1B status  within the United States—does not exceed the cap each year, U.S.  Citizenship and Immigration Services should take steps to improve its  tracking of the number of approved H-1B applications and the number of  issued visas under the cap by fully leveraging the transformation effort  currently under way, which involves the adoption of an electronic petition  processing system that will be linked to the Department of State’s tracking  system. Such steps should ensure that linkages to the Department of  State’s tracking system will provide Homeland Security with timely access  to data on visa issuances, and that mechanisms for tracking petitions and  visas against the cap are incorporated into U.S. Citizenship and  Immigration Services’ business rules to be developed for the new  electronic petition system.
To address business concerns without undermining program integrity, U.S.  Citizenship and Immigration Services should, to the extent permitted by its  existing statutory authority, explore options for increasing the flexibility  of the application process for H-1B employers, such as    allowing employers to rank their applications for visa candidates so that  they can hire the best qualified worker for the jobs in highest need;    distributing the applications granted under the annual cap in allotments  throughout the year (e.g. quarterly); and    establishing a system whereby businesses with a strong track-record of  compliance with H-1B regulations may use a streamlined application  process.
We are making the following two recommendations to the Secretary of  Labor:  To improve the transparency and oversight of the posting requirement on  the Labor Condition Application (LCA), as part of its current oversight  role, the Employment and Training Administration should develop and  maintain a centralized Web site, accessible to the public, where businesses  must post notice of the intent to hire H-1B workers. Such notices should  continue to specify the job category and worksite location noted on the  LCA and required by statute on current noncentralized postings.
To improve the efficiency and effectiveness of its investigations of  employer compliance with H-1B requirements, the Employment and  Training Administration should provide Labor’s Wage and Hour Division  searchable access to the LCA database.
section_title: Agency Comments and Our Evaluation
paragraphs: The Departments of Homeland Security, Justice, Labor, and State were  provided a draft of this report for review and comment. The Departments  of Homeland Security and Justice provided written responses to one or  more of our recommendations, which appear in appendixes VI and VII of  this report. Labor and State did not provide a written response to our  recommendations. In addition, Homeland Security, Justice, and Labor  provided technical comments, which have been incorporated into the  report where appropriate.
In brief, the Department of Justice expressed support for our  recommendation that Labor develop and maintain a Web site where  businesses post notice of their intent to hire H-1B workers. In addition,  Justice offered two more recommendations that build on our findings  regarding the lack of a labor market test for most H-1B employers and the  limited use of its complaint process by U.S. workers. However,  Homeland Security did not agree with the two recommendations we made  pertaining to Homeland Security’s U.S. Citizenship and Immigration  Services, nor did it agree with one matter for congressional consideration.
The recommendation in our draft report on improving H-1B cap  management emphasized that Homeland Security should leverage its  transformation effort by reaching an agreement with State to ensure that,  by linking data systems, it would have real-time information on the  number of visas approved under the cap. In response, Homeland Security  cited as evidence of its intentions the work already under way to develop  an electronic exchange of visa and immigration data with State. However,  in our review of the department’s memorandum of agreement and letter of  intent with State that discuss such exchanges, we did not find specific  references to improving cap management with State’s visa data. Further,  Homeland Security added that data to be exchanged with State may only  slightly improve cap management because State’s data (1) do not include  individuals already in the United States who are seeking to change their  visa status, and (2) will be too old to assist Homeland Security with cap  management, since it is typically months after Homeland Security  approves petitions that State issues visas to individuals residing outside of  the United States.
We understand that, for individuals already residing in the United States,  Homeland Security does not depend on State, but has its own data on  changes in visa status for approved H-1B workers. We also acknowledge  that for individuals residing outside of the United States, there is some lapse  in time between Homeland Security’s approval of an H-1B petition and  State’s issuance (or decision not to issue) a visa. Nevertheless, we maintain  that possessing timely and accurate information on petitions and visas that  count against the cap for all individuals—both within and outside the United  States—could provide a more reliable basis for ongoing monitoring with  respect to the annual visa cap. Improved tracking would in turn provide  Homeland Security the information it needs to reduce the potential for  exceeding the visa cap and ensure that, in high-demand years, only 65,000  visas are issued. In response to Homeland Security’s comments, we clarified  our recommendation with respect to the steps it should take, including the  importance of incorporating better tracking mechanisms in the business  rules to be developed for the new electronic petition system.
With regard to our recommendation that U.S. Citizenship and Immigration  explore options for increasing the flexibility of the application process for  H-1B employers within its statutory authority, Homeland Security raised  several concerns about the feasibility of our suggested options and noted  one initiative under way that may expedite the application process for  employers. We continue to believe that additional efforts are warranted to  more fully explore the potential benefits and costs of these options.
Homeland Security said it believes that current law does not allow the  department to exempt petitioners with track records of H-1B compliance  from evidentiary requirements. However, we believe there may be  additional opportunities to streamline the application process for  businesses by not requiring them to resubmit evidence that they have  already provided, without exempting petitioners from evidentiary  requirements. Homeland Security noted its own initiative—the Validation  Instrument for Business Enterprises (VIBE) system—is intended to reduce  the need for petitioners to submit certain documentation by providing the  department with the means to verify the petitioners’ information through  an independent source, but acknowledged in its technical comments that  the system will not necessarily reduce the burden of providing supporting  documentation for petitioners in the immediate future.
Homeland Security noted that implementation of a beneficiary ranking  process would be extremely complicated and resource intensive and  would decrease flexibility for employers. We continue to believe that such  obstacles could be surmountable through technology. For example,  petitioner-level electronic accounts—as planned in the electronic petition  system slated for 2012—could allow employers to manage, and possibly  change, their rankings without necessarily decreasing their flexibility.  Homeland Security also stated that implementing a quarterly cap  allocation is neither warranted nor feasible. Again, we believe that  distributing the annual cap in allotments throughout the year might be  feasible with an electronic petition system. For example, quarterly  allocations of visas could be administered by creating an electronic queue  whereby petitions that were not selected in one lottery round would have  priority in the next. An automated cap management system that combines  electronic tracking and queuing might reduce, for federal managers  themselves, the level of complexity involved in managing the program.  Homeland Security also expressed concern that a ranking system might  encourage petitioners to over-submit petitions in an attempt to increase  their chances of obtaining H-1B workers. The department is, nevertheless,  considering a similar option that would allow petitioners to request visa  slots prior to submitting an LCA. Whether or not petitioners would over- submit in response to either option is a matter that we believe should be  further studied or tested. In summary, we believe that Homeland Security’s  ongoing Transformation Project—currently in its development phase— affords the opportunity to explore creative and thoughtful solutions to the  challenges of administering the H-1B program. Such an examination could  weigh the potential costs and risks associated with the options we  outlined against their potential benefits in savings for taxpayers and  petitioners—with the ultimate goal of supporting legitimate business  needs while not compromising worker protections.
Homeland Security disagreed with our asking Congress to consider  transferring the review of the LCA from Labor to U.S. Citizen and  Immigration Services, citing internal lack of expertise in wage and labor  determinations and Labor’s role in enforcing labor violations. While we  recognize Labor’s expertise, Labor officials told us that, unless its legal  authority is expanded to allow for verification of employer attestations,  the Employment and Training Administration’s review can only ensure  that employers have completed the form’s questions and check-box  questionnaire and that there are no obvious inaccuracies. We maintain that  such a limited review could be readily subsumed in Homeland Security’s  petition adjudication process because it too reviews the LCA. We are not  recommending that Labor’s enforcement role, carried out by its Wage and  Hour Division, be transferred to Homeland Security. Further, we do not  believe that Labor’s enforcement efforts would be compromised by  transferring the LCA approval process to Homeland Security, especially in  light of challenges Wage and Hour faces with gaining access to LCA  information from the Employment and Training Administration, as  identified in this report.
We are sending copies of this report to the Secretaries of Homeland  Security, Labor, and State, the Attorney General, appropriate  congressional committees, and other interested parties. In addition, the  report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-7215 or sherrilla@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made major contributions to this report  are listed in appendix VIII.
section_title: Appendix I: Objectives, Scope, and Methods
paragraphs: We conducted our work in response to a House report that accompanied  the Consolidated Security, Disaster Assistance, and Continuing  Appropriations Act of 2009. The House report directs GAO to examine the  impact of the H-1B visa cap on the ability of domestic companies to develop  modern technology and perform innovative scientific research and  development (R&D), while ensuring U.S. workers are not unfairly displaced  or otherwise disadvantaged by H-1B visa holders. To do this, in agreement  with cognizant Hill staff, GAO addressed five objectives. Specifically, with  respect to H-1B employers, we examined what is known about (1) their  demand for H-1B workers and (2) how the H-1B cap affects their costs,  R&D, and offshoring decisions. With respect to H-1B and U.S. workers, we  examined what is known about (3) H-1B worker characteristics, (4) how  raising the H-1B cap might affect employment and wages of U.S. workers,  and (5) how well H-1B program requirements ensure that U.S. workers are  not displaced or disadvantaged by the program.
This appendix provides a detailed account of the data sources used to  answer these questions, the analyses we conducted, and any limitations  we encountered. The appendix is organized into four sections. Section 1  describes the key information sources we used for the report. Section 2  describes our methods for comparing the characteristics and wages of U.S.  workers with those of approved H-1B workers (which are presented in the  report and in appendix II). Section 3 describes our methods for analyzing  employment levels, unemployment rates, and wages of U.S. workers in  those occupations with the highest concentration of approved H-1B  workers. Section 4 describes our methods for analyzing the long-term  immigration outcomes of a cohort of H-1B approved H-1B workers.
subsections: section_title: Section 1: Information Sources
paragraphs: Our information sources included electronic data from datasets  administered by the Departments of Labor, Homeland Security, Justice,  and State, and by private vendors. Details on the scope and purpose of  these data are described below. For each of the datasets described above,  we conducted a data reliability assessment of selected variables by  conducting electronic data tests for completeness and accuracy, reviewing  documentation on the dataset, interviewing knowledgeable officials about  how the data are collected and maintained and their appropriate uses, or  completing all of these. For the purposes of our analysis, we found the  variables that we reported on from these datasets to be sufficiently  reliable.
In addition to electronic data, our information sources included interviews  with a nonprobability sample of H-1B employers, site visits, and reviews of  agency documentation and pertinent literature. Details on the scope and  purpose of these information sources are also described below.
subsections: section_title: Department of Labor Data
subsections: section_title: Labor Condition Application Data
paragraphs: To obtain information on the characteristics of employers requesting H-1B  workers and the positions they sought to fill over the past decade, we  analyzed two administrative datasets containing information from the  Labor Condition Application (LCA) filed by prospective H-1B employers to  the Department of Labor (Labor).
First, we analyzed the Efile H-1B Disclosure Data managed by Labor’s  Employment and Training Administration (Employment and Training).  These data included all the applications filed electronically from 2002  through 2009. We analyzed the data from a total of 2,451,785 applications  to determine (1) the number of unique companies that submitted  applications each year; (2) the total number of H-1B workers these  companies requested each year; (3) the number of applications that were  certified or denied; and (4) the number of companies that were either H-1B  dependent (i.e., those with 15 percent or more of their workforce  comprised of H-1B workers) or willful violators.
Second, we obtained and analyzed more recent data on LCAs that were  filed from June 2009 through July 2010, which were processed through  Labor’s new iCERT system. Unlike Labor’s data from previous years, the  iCERT data contained detailed information on the prospective H-1B  worker’s skill level, which is specified by the employer on the LCA. We  received data including the skill level listed on 258,847 LCAs that were  filed between June 2009 and July 2010. The iCERT data also contain a  variable indicating whether the petitioning employer was H-1B dependent.  We obtained and tabulated this variable for the top 150 H-1B hiring  companies (which we defined as those requesting the highest number of  H-1Bs in 2009).
section_title: Wage and Hour Complaint Data
paragraphs: To understand trends in H-1B complaints received by Labor’s Wage and  Hour Division (Wage and Hour) and their outcomes over time, we  analyzed extracts from Wage and Hour’s Investigative Support and  Reporting Database. Specifically, for fiscal year 2000 to fiscal year 2009,  we obtained the number of complaints received, the number of complaints  resulting in investigations, the number of cases found to have violations,  and the prevalence of specific types of violations. We also requested and  received additional data from Wage and Hour on the outcomes of these  investigations including the total back wages due to employees, the  number of employees that were due to receive back wages, the total civil  monetary penalties assessed to violators, and the number of disbarments  of H-1B employers. To identify potential regional variations, for fiscal year  2006 to fiscal year 2009, we collected and reviewed the number and nature  of complaints investigated by region. To more fully understand the extent  and impact of the most common types of violations alleged in complaints  that Wage and Hour investigated, for fiscal year 2009, we analyzed the  number of cases involving each type of violation, the number of times each  violation occurred, and the number of employees impacted.
section_title: Current Population Survey Data
paragraphs: To determine the characteristics of U.S. workers in select occupations  over the past decade, we analyzed Current Population Survey (CPS) data.  The CPS Basic Monthly Survey—a survey of about 50,000 households that  is conducted by the Bureau of Labor Statistics (BLS)—provides a  comprehensive body of information on the employment and  unemployment experience of the nation’s population. The March Annual  Social and Economic CPS supplement is one source of detailed  information on income and work experience in the United States. We used  both the basic monthly CPS survey data and published estimates based on  these surveys over the past decade to produce annual estimates for the 10- year period. We used the March 2009 Annual Social and Economic  supplement to produce some additional estimates in this report. A more  complete description of the surveys, including sample design, estimation,  and other methodology can be found in the CPS documentation prepared  by Census and BLS.
We used the March 2009 supplement data to produce estimates for U.S.  citizens’ longest held job in the previous year, highest degree attained, age,  and wages. For this analysis, we restricted the population to those U.S.  citizens who were full-time wage and salary workers (excluding self- employed) aged 18 to 50 and working for private employers (excluding  government). We estimated median salaries for this population by age and  education level for three occupations of interest: (1) systems analysis,  programming, and other computer-related occupations; (2)  electrical/electronic engineering; and (3) college and university educators.  The occupation and salary information used was for the longest held job in  2008. We compared these median estimates to median salaries reported on  2008 H-1B worker petitions for similar occupations and age groups.
We used CPS’s basic monthly survey data to examine how the proportion of  H-1B to U.S. citizen workers changed over the last decade for these same  five occupations of interest. Specifically, for 2000 to 2009, we computed  yearly averages from the 12 monthly CPS surveys from each of the years.  For these estimates, we restricted the population to U.S. citizen full-time  adult workers. Although the occupational categories are the same as those  used for the March 2009 supplement analysis, the occupation was for the  job held by the U.S. worker the prior week. Additional details of this  analysis are presented in Sections 2 and 3 of this appendix.
Because the CPS is a probability sample, based on random selections, the  sample is only one of a large number of samples that might have been  drawn. Since each sample could have provided different estimates,  confidence in the precision of the particular sample’s results is expressed  as a 95 percent confidence interval. This is the interval that would contain  the actual population value for 95 percent of the samples that could have  been drawn. The 95 percent confidence intervals provided in this report  were developed from standard error estimates that were either provided  by BLS for the underlying estimate (for median weekly wages), or  computed using formulas and methods described in CPS documentation.
Consistent with the CPS documentation guidelines, we do not produce  annual estimates from the basic monthly CPS data files for populations of  less than 35,000, or estimates based on the March supplement data for  populations of less than 75,000.
section_title: Department of Homeland Security Data
subsections: section_title: Data on H-1B Petitions Filed by Employers
paragraphs: To help analyze trends in demand for and characteristics of H-1B workers  and employers over the last decade, we used administrative data collected  by Department of Homeland Security’s (Homeland Security) U.S.  Citizenship and Immigration Services (USCIS) reflecting information  supplied by prospective H-1B employers on the I-129 form, the form that is  used to petition for an H-1B worker. These data, known as the Computer  Linked Application Information Management System, Version 3.0 (CLAIMS  3) provide detailed information on the characteristics of prospective H-1B  employers and workers. We used two versions of these data—CLAIMS 3  Mainframe and CLAIMS 3 Local Area Network (LAN)—because they  contained different variables.
Using the CLAIMS 3 Mainframe database from fiscal years 2000 through  2009, for each fiscal year we determined  the number of H-1B initial petitions and extensions submitted by all  employers, employers subject to the cap, and cap-exempt employers;  the number of H-1B petitions approved or denied by Homeland Security,  by initial petitions and extensions;  the total number of companies and the total number of cap-exempt  companies that submitted and had approved H-1B petitions, by initial  petitions and extensions;  the characteristics of companies that were approved by Homeland  Security to hire H-1B workers, including their industry codes and the  number of workers they requested; and  the characteristics of workers that Homeland Security approved as H-1Bs,  including whether or not the workers were residing in the United States at  the time of application; their countries of birth, education level, age, rate  of pay, occupation, industry, and the location of their prospective place of  employment.
Because the CLAIMS 3 Mainframe database does not distinguish or  contain data on petitions subject to the master’s cap, we also obtained and  analyzed data from the CLAIMS 3 LAN database from fiscal years 2004  through 2009 to determine the number of approved H-1B petitions for  workers who graduated with a master’s degree or higher from an  American institution of higher education.
To understand how the number and demographic characteristics of  approved H-1B workers compared to U.S. citizen workers over the last  decade, we used USCIS’s CLAIMS 3 Mainframe H-1B approval data for  2008 for five key occupations: (1) systems analysis, programming, and  other computer-related occupations; (2) electrical/electronic engineering;  (3) college and university educators; (4) accountants, auditors, and related  occupations; and (5) physicians and surgeons. These analyses are  described in detail in Section 2.
Finally, we used CLAIMS 3 Mainframe data for fiscal year 2009 to identify  the 150 employers with the highest number of approved H-1B petitions,  and we collected additional data on these employers as described below in  the “Data from Private Vendors” section.
section_title: Limitations of H-1B Petition Data
paragraphs: While the CLAIMS 3 data provided a variety of information on approved   H-1B workers, these data had several limitations with respect to  understanding demand for and characteristics of H-1B workers. Most  importantly, they did not provide information on how many H-1B workers,  whose petitions were approved, were actually working in the United  States in any particular year. Therefore, although the CLAIMS 3 data are  informative about approved H-1B petitions and about some characteristics  of the workers listed on those petitions, these characteristics may not be  indicative of the characteristics of all H-1B workers in a given year. For  example:    Of the H-1B petitions submitted in fiscal year 2008 and approved, we do  not know the proportion that began work in 2008. Some may not have  started work until 2009; others may not have started work at all.
An individual H-1B worker could be represented in multiple petitions filed  by different employers in the same year.
An individual H-1B worker could be represented in multiple petitions filed  by the same employer in the same year prior to March 2008.
USCIS’s CLAIMS 3 data can only provide information on the flow of new  H-1B workers into the U.S. workforce, not about the stock of all H-1B  workers in those occupations. In other words, they can provide  information on the number of H-1B workers whose petitions were  submitted and approved for fiscal year 2008, but not on the number of H- 1B workers that were actually employed in the United States in 2008.
Because of these uncertainties, we do not know how well the  characteristics of approved H-1B workers whose petitions were submitted  in any year would approximate the characteristics of the population of   H-1B workers actually employed in that year. Further, because of these  limitations we do not know the number of new H-1B workers actually  entering the U.S. workforce in any given year.
section_title: United States Visitor and Immigrant Status Indicator Technology (US-VISIT) Data
paragraphs: To examine the long-term immigration outcomes for H-1B workers, we  obtained data from Homeland Security’s US-VISIT Arrival Departure  Information System (ADIS) database, which were matched against H-1B  petition data. US-VISIT data are collected on noncitizens at the point of  entry into the United States and contain other immigration information,  including the dates of entry into and exit from the country; the date a  petition to convert to permanent residency was submitted (if one was  submitted) and the status of that petition (approved, denied, or pending);  the person’s country of citizenship; and country from which their entry  visa was issued. For a summary of the methods used and any limitations  encountered in conducting data matches and related analysis, see Section  4 of this appendix.
section_title: Department of Justice Data Complaint Data
paragraphs: To understand trends in the number of complaints (known as charges)  that are filed with the Department of Justice (Justice) regarding the H-1B  program over time, we obtained data on the number of H-1B-related  charges Justice received from fiscal year 2006 through March 2010.  Specifically, we analyzed information on all inactive cases, including on  whether the matter was Justice-initiated or complaint-driven, the number  of charges per fiscal year, initial investigation and completion dates, the  alleged violation committed by the company cited in the charge, and the  outcome of each charge. For cases that were resolved from fiscal year  2006 to March 2010, we analyzed summaries provided by Justice  describing the nature and resolution of all cases on which Justice took  action.
section_title: Department of State Data
subsections: section_title: Data on Visa Issuances
paragraphs: To determine the number of H-1B and L-1 visas issued from 2000 to 2009,  we reviewed and compiled data on visa issuances published by the  Department of State (State).
section_title: Data from Private Vendors
paragraphs: To learn more about the top 150 H-1B hiring companies in fiscal year 2009  (beyond the information available in agency administrative databases), we  gathered additional information on these companies through Mergent  Online and LexisNexis’s Dossier databases. We used these databases to  obtain information on country of incorporation, country of operations  (location), primary North American Industry Classification System  (NAICS), number of employees, net income, operating income, total  assets, and business description for each company. For several companies  for which neither database had available information or we wanted  additional information (i.e., a more detailed business description), we  downloaded and saved information from company Web sites.
section_title: Data Reliability
paragraphs: For each of the datasets described above, we conducted a data reliability  assessment of selected variables by conducting electronic data tests for  completeness and accuracy, reviewing documentation on the dataset, or  interviewing knowledgeable officials about how the data are collected and  maintained and their appropriate uses. For the purposes of our analysis,  we found the variables that we reported on from these datasets to be  sufficiently reliable. In several instances, we identified inconsistencies  with the reporting of particular data fields. In these instances, we took  steps to address these inconsistencies by using criteria to create decision  rules. For example, a given H-1B employer might have reported different  industry codes on their H-1B petition applications in a given year. When  this occurred, except if a company had multiple industry codes listed the  same number of times, we identified the industry that the employer most  frequently listed on the petition. If more than one industry code appeared  the same number of times, the company was double counted to reflect  equally relevant industries. In other instances, when it was not possible to  apply a reasonable decision rule, we did not include the data field in our  analysis.
section_title: Interviews with H-1B Employers
paragraphs: To determine how the H-1B cap and program affects the costs, R&D, and  offshoring decisions of firms doing business in the United States, we spoke  to a nongeneralizable sample of 34 companies that employed H-1B  workers in fiscal year 2008. For 31 of these companies, we conducted  structured interviews with representatives of the company. For the  remaining 3 companies, we spoke with a company representative in two  separate focus groups.
Of the 31 firms with whom we conducted structured individual interviews,  22 were selected randomly from a stratified sample of all H-1B hiring firms  in fiscal year 2008. The universe of H-1B hiring firms (excluding nonprofits  and universities) was stratified into three groups according to the number  of approved H-1B petitions. Anticipating a high refusal rate from  companies we asked to participate in the structured interview, we over- sampled for each of these groups. Ultimately, of the 150 companies we  contacted, 22 agreed to speak with us. The following table summarizes  the population of companies and the number of companies contacted.
The remaining firms with which we conducted additional structured  interviews were selected by GAO based on referrals from industry  contacts. Some of these firms were chosen because they were known  leaders in key sectors of the economy, while others were chosen because  they represented firms from sectors that were difficult to contact and  whom we expected would not be well represented by the random sample  (including one start-up company and one small H-1B-dependent staffing  firm). Ultimately, we conducted structured individual interviews with 9  additional firms selected based on referrals from industry contacts, for a  total of 31 individual interviews; and we conducted focus group interviews  with 3 additional firms selected based on referrals from industry contacts.  This selection of a total of 34 firms constitutes a nongeneralizable sample  and cannot be used to make inferences beyond the specific firms selected.
The firms we spoke with were located throughout the country and  reflected six industrial sectors and a range of sizes (from a few workers  based in one location to thousands of workers positioned around the  globe). Through these interviews, we spoke with key executives in a  variety of technology-intensive industries, including information  technology (IT); semiconductor manufacturing and other manufacturing  and engineering firms; and pharmaceuticals and biotechnology. Regarding  technology-intensive industries, we spoke with representatives of several  large multinational companies, including four of the top U.S.-based H-1B  employers (i.e., U.S.-based companies that were among the top 50  companies with the highest number of approved H-1B petitions), as well  as several small and emerging technology companies who use H-1B  workers for highly specialized positions. We also spoke with 10 IT services  firms, including three large (meaning they employed at least 100 H-1B  workers) foreign-owned H-1B staffing and outsourcing companies, and  several smaller IT staffing and consulting firms. In addition, we spoke with  companies in several other sectors, including two financial organizations,  a health care provider, and a consumer retail firm.
To develop our structured interview questionnaire, we took several steps.  First, we conducted two focus groups with H-1B employers and  representatives of major industry organizations. In these focus groups, we  tested preliminary versions of our interview questions, and used the  discussion to revise the questions. We also conducted six tests of the  structured interview with individual companies. The responses from the  three companies that participated in our focus groups were not included in  the tabulated results based on interviews with individual firms, because  the structure of our individual firm interviews differed significantly from  the structure of our focus groups. However, the responses from all six of  our test interviews were included in our tabulated results of company  interviews.
To analyze the data we collected from the company interviews, we  conducted a content analysis of company responses. This analysis  involved coding the interview responses and conducting frequency  analyses of the topics and themes that were raised by the company  representatives. Two analysts coded the responses. Any discrepancies in  coding were discussed and resolved before finalizing the resulting data set.
During our interviews, employers and experts offered a number of  suggestions for how the program could be improved. Although it was not  possible to publish all of the suggestions, those that are mentioned in the  report were chosen on the basis of the following factors: (1) frequency of  suggestion, (2) feasibility, (3) potential for economic efficiency, and (4)  corroboration with other information sources.
section_title: Site Visits, Interviews, and Review of Documentary Evidence
paragraphs: To understand the (1) H-1B certification, adjudication, and enforcement  processes; (2) the responsibilities of each agency involved; (3) the  effectiveness of the H-1B program’s protections for U.S. workers; and (4)  the reliability of the datasets we used, we conducted three site visits and  conducted numerous interviews with agency officials, labor advocates, and  academics. To understand the processing of applications, we visited Labor’s  LCA processing center in Illinois and Homeland Security’s I-129 processing  center in California. We also conducted interviews with State’s Kentucky  Service Center, where I-129 petitions that have been approved by Homeland  Security are entered into a State database that is accessible to consular  offices around the world. To understand investigations related to approved  H-1B visa holders, we visited Labor’s Wage and Hour Division’s Northeast  Regional Office in Philadelphia, the regional office that had received the  highest number of H-1B-related complaints in the country. In addition, we  conducted interviews with officials from Labor, Homeland Security’s USCIS  and US-VISIT offices, State, and Justice with regard to their roles in all  phases of the H-1B program. We also reviewed agency documentation and  the laws and regulations related to the H-1B program.
To deepen our understanding of the role of the H-1B program for businesses  in specific segments of the economy, and the impact of the H-1B program on  U.S. workers, we interviewed a number of academics and business  advocates. Specifically, we interviewed leading academics in the areas of  business, economics, demography, international relations, and labor  relations. To better understand the specific issues facing start-up companies  and high-tech organizations, we conducted interviews with venture capital  companies and immigration law firms that work with start-up companies.  To better understand the specific issues facing firms in the IT staffing and  services industry, we interviewed industry advocacy organizations.
We also conducted an extensive review of the academic literature, which  included articles and studies on the impact of migration on U.S. workers,  trends in international business, and trends in the education of foreign  students in science and technology fields.
Finally, to address all objectives, we reviewed relevant federal laws and  regulations; news media articles, and the temporary immigration programs  of several other countries that we selected based on our literature review  and our discussions with experts.
Table 7 provides a summary of how the information sources described  were used to answer each of the reporting objectives.
section_title: Section 2: Methods for Comparing U.S. and H-1B Workers
paragraphs: As part of our examination of the impact of the H-1B program on domestic  employment, we used data from the 2009 March supplement of the CPS to  estimate the number of U.S. citizen workers in 2008, their age distribution,  and their education levels for five occupational categories that received  the most H-1B approvals in fiscal year 2009. Ideally we would have  compared U.S. workers to actual H-1B workers; however, data on actual H- 1B workers do not exist. The data we analyzed (CLAIMS 3), as explained  above, pertain to prospective H-1B workers (those whose petitions were  submitted in a given year and approved by Homeland Security).
To help ensure that we were comparing workers in the same occupational  categories, we had to combine some occupational categories in the CPS to  better match those in the CLAIMS 3 data, as shown in table 8.
subsections: section_title: Limitations of Wage Comparisons
paragraphs: In addition, we compared salaries of U.S. workers with those of H-1B  workers, although this comparison had limitations. Specifically, we  compared the CPS median salary estimates for the 2009 March supplement  to median salary figures reported in CLAIMS 3 salary data for the  approved H-1B workers whose petitions were submitted in 2008 for three  of the occupations of interest overall and by age group. Although several  of the comparisons we were able to make did show a statistically  significant difference between the CLAIMS 3 H-1B workers’ median salary  and the “comparable” CPS estimate, these analyses have several  limitations:    Within each occupational group, there can be variation in the types of jobs  and work performed. Our data do not account for these subtleties.  Therefore, it is possible that H-1B workers may have been working in  relatively more or less sophisticated jobs than U.S. workers within the  same occupational group.  For example, H-1B workers and U.S. workers in  the occupation “college and university education” may have different  fields of education and work in different types of institutions.
The measures of median annual salaries for U.S. citizens could include  bonuses, but the median annual salaries reported in the CLAIMS 3  database most likely do not. Neither median salary includes noncash  benefits such as health insurance or pensions.
CPS salary reported in the 2009 March supplement was for the longest  held position actually worked in 2008, as reported by workers themselves  (or knowledgeable members of their household). In contrast, the salaries  reported in the CLAIMS 3 database are reported by prospective H-1B  employers and reflect what the employer intends to pay the H-1B worker  in fiscal year 2008 or fiscal year 2009, a time period covering October 1,  2007, through September 30, 2009.
We identified patterns in the H-1B worker salary data that raise concerns  about the validity of that data. Specifically, the frequency distributions we  ran on the salaries of H-1B workers in the five key occupations showed  that employers reported a number of very low and very high salaries for  the “annual rate of pay” on the petition application. We had no basis for  determining whether the high and low salaries were data entry errors,  estimated payments for an employment period of more or less than a year,  or were very high or low for some other reason. To minimize the influence  of these outliers, we used median salary rather than mean.
In light of these limitations, caution should be used in interpreting  differences found in comparing estimated 2008 median U.S. citizen worker  salaries and the median salaries for H-1B worker petitions submitted in  2008.
section_title: Section 3: Analysis of Employment and Wages of U.S. Workforce
paragraphs: To determine how raising the H-1B cap might affect the employment and  wages of U.S. workers, we examined labor market indicators (employment  levels, unemployment rates, and usual weekly earnings) of U.S. workers in  three occupations approved to receive the largest proportion of approved  H-1B petitions relative to the total U.S. workforce in those occupations:  (1) systems analysis, programming, and other computer-related  occupations; (2) electrical and electronics engineers; and (3) college and  university education. For this analysis, we relied on three sets of published  CPS estimates of annual averages based on data collected through CPS  basic monthly surveys: (1) median weekly earnings (at last week’s primary  job) of full-time wage and salary workers by detailed occupation and sex,  2000 to 2009 annual averages; (2) employed persons by detailed  occupation and sex, annual averages 2000 to 2009; and (3) unemployment  levels and rates by detailed occupation, 2000 to 2009 annual averages.  These data were provided to us by staff at BLS.
In addition to presenting estimates of the employment levels,  unemployment rates, and median usual weekly earnings for each  occupational group, we also calculated and presented estimates of the  change over the decade in the unemployment rate and median usual  weekly wage for each occupational group, and the growth rate relative to  year 2000 for the employment level for each occupational group.
In order to better understand trends identified in our analysis and the  specific issues facing workers in segments of the economy that may not be  apparent from national labor force statistics, we also spoke with several  labor advocates who work with and advocate for computer scientists and  computer programmers, as well as academic researchers who do research  on the U.S. science, engineering, and technology workforce.
section_title: Section 4: Analysis of Long-Term Immigration Outcomes of H-1B Workers
paragraphs: To examine the long-term immigration outcomes of H-1B workers, GAO  obtained data from Homeland Security’s US-VISIT ADIS database. The  ADIS data provided was based on matching ADIS data with 302,550  records from Homeland Security’s CLAIMS 3 database submitted by GAO  to US-VISIT for this purpose. The CLAIMS 3 records used for matching  consisted of approved initial H-1B petitions that were valid to start work in  H-1B status between January 1, 2004, and September 30, 2007.
subsections: section_title: Matched Data Received from US-VISIT
paragraphs: US-VISIT matched the submitted records by first name, last name, and  date of birth to the ADIS data system. US-VISIT’s matching returned a total  of 5,091,369 event records from the ADIS system, containing information  about 375,641 persons in the ADIS system. These event records, which US- VISIT provided GAO, contained data on the following events for foreign  nationals: entry into the country; exit from the country; petition to convert  to permanent residence status (I-485); and status of petition to convert to  permanent residence (approved, denied, or pending.) Each event record  has an associated event date. US-VISIT also provided the following  identifying information: ADIS person identifier, first name, last name, date  of birth, country of citizenship, country of issuance, I-94 number, and  CLAIMS 3 receipt number, where available.
section_title: How GAO Determined Reliable Matches
paragraphs: GAO took a number of steps to identify reliable matches between CLAIMS  3 and ADIS data. We determined that the match was reliable if at least one  of the following three conditions held: (1) the ADIS person had an H-1B  visa status at some point during their history; (2) the CLAIMS 3 receipt  number in the CLAIMS 3 data matched at least one of the CLAIMS 3  receipt numbers recorded in the ADIS system; (3) the I-94 number  recorded with the petitioners’ I-129 form matched at least one of the I-94  numbers on file in the ADIS system. In the case of one-to-many and many- to-many matches, we selected the match that met criteria 2 or 3 over  criteria 1. We determined that 169,349 records met these criteria.
There are various reasons why a visa might not be used or a beneficiary  might not be in the ADIS system for an approved H-1B petition. For  example, an H-1B visa might not be used for an approved petition when  the employer decides not to offer the beneficiary the job; the beneficiary  decides not to accept the job; or the beneficiary obtains a different U.S.  visa status, such as through marriage, student visas, or other work visas.  An H-1B visa might be used, but the beneficiary would not be in the ADIS  system for several reasons. First, the ADIS system became fully  operational in January 2004; those who were already in the United States  at the time they submitted their H-1B petition (such as students enrolled in  U.S. universities) and did not enter or exit the country after January 2004  may not have been entered in the ADIS system. In addition, some  beneficiaries who entered the United States by land may have entered the  country without going through an official border station where they  submit an I-94 form. Finally, a beneficiary’s record may not be in the ADIS  system due to data quality problems. For example, if an H-1B beneficiary  changed their name through marriage and subsequently had an I-485  submitted on their behalf, US-VISIT may at times be unable to link the   I-485 submission to the H-1B beneficiary due to the name change.
We conducted this performance audit from May 2009 through January  2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Characteristics of U.S. and H-1B Workers in Five Occupational Groups
paragraphs: This appendix provides additional analyses of the characteristics of U.S.  and approved H-1B workers in five occupational groups between 2000 and  2009.
subsections: section_title: For H-1B-Heavy Occupations, the Proportion of H-1B- Approved Workers Generally Decreased over Time
paragraphs: For five occupational groups with large numbers of approved H-1B  workers over the last decade, we compared newly approved H-1B  workers with the stock of U.S. citizen workers in those occupations and  found that the relative number and proportion of newly approved H-1B  workers varied over the decade for all five occupations, but decreased  overall. The five occupations we examined and that represent occupations  with the highest concentration of newly approved H-1B workers included  (1) systems analysts, programmers, and other computer-related workers;  (2) electrical and electronics engineers; (3) accountants and auditors; (4)  college and university educators; and (5) physicians and surgeons.
Despite some fluctuations over time, the overall number of newly  approved petitions for H-1B workers across these five occupational groups  declined from 137,371 in 2000 to 44,946 in 2009, and the proportion relative  to estimates of U.S. citizen workers fell from about 2.5 percent to less than  1 percent between 2000 and 2009. For specific occupations, as shown in  figure 15, the highest proportion of newly approved H-1B workers as  compared to U.S. citizen workers was in the systems analysis,  programming, and other computer-related occupations, averaging about 3  percent across the decade, while the lowest proportion was in the  accounting occupations and physicians and surgeons occupations,  averaging less than 1 percent. Further, for electrical and electronics  engineering and systems analysis, programming, and other computer- related occupations, the declines in the proportion of newly approved H- 1B workers as compared to U.S. citizen workers seem to coincide with the  economic downturn of 2002.
We did not examine potential reasons behind this relative decline in the  proportion of H-1B workers over time; however, fluctuations in the  economy and H-1B cap were likely contributing factors.
section_title: For H-1B-Heavy Occupations, Approved H- 1B Workers Were Younger and More Educated Relative to U.S. Citizen Workers
paragraphs: In 2008, approved H-1B workers (initial and extensions) were generally  younger and more educated as compared to their U.S. citizen counterparts  in similar occupations, although this varied by the particular occupation  (see fig. 16).
In these five occupations, we generally found that a higher percentage of  approved H-1B workers had earned an advanced graduate degree  (including master’s, Ph.D., or professional degree) than U.S. citizen  workers, as shown in figure 17. Across the five occupations, 56 percent of  approved H-1B workers had graduate degrees, as compared to an  estimated 29 percent of the total stock of U.S. citizen workers. For this  comparison, all U.S. citizen estimates are for the population of U.S.  citizens aged 18 to 50 years old in private, full-time employment, excluding  those in government employment and the self-employed.
section_title: Appendix III: Labor Force Trends for U.S. Workers in Selected Occupations
paragraphs: Appendix III: L Wabor Force Trends for U.S.
This appendix presents analyses of median earnings growth,  unemployment rates, and employment levels for the three occupations  with the highest proportion of approved petitions for H-1B workers over  the past decade.
subsections: section_title: A Retrospective View Shows a Mixed Employment and Earnings Picture for Professions Absorbing H-1Bs
paragraphs: To shed light on the U.S. workforce most likely to have been affected by  the H-1B program over the past decade, we reviewed 10 years of data on  the employment, unemployment, and earnings of U.S. workers in the three  occupations with the largest proportion of approved H-1B petitions  relative to the stock of U.S. workers over the past decade. We found that  U.S. workers in all three occupations, in every year, had significantly  higher median earnings levels compared to U.S. workers in all professional  occupations. We also found that one of the three occupations—systems  analysts and computer programmers—had significantly higher earnings  growth compared to all professional U.S. workers. However,  unemployment rates were cyclical for two groups and employment levels  varied among the three groups (i.e., declining for electrical and electronics  engineers, growing for college and university educators, and remaining  essentially unchanged among systems analysts and computer  programmers).
subsections: section_title: Earnings and Earnings Growth among Selected Occupations
paragraphs: Real earnings growth among systems analysts, programmers, and other  computer-related U.S. workers was relatively strong over the decade—12  percent—and was significantly larger than real earnings growth among all  professional workers over the decade, which was about 4 percent. Among  electrical and electronics engineers, real earnings growth was about 8  percent over the decade; however, the difference between this increase  and that of all professional workers was not statistically significant.  Among college educators, real earnings did not grow significantly over the  decade. As can be seen in figure 18, in every year over the past decade all  three occupations had median weekly earnings levels that were  significantly higher than the median earnings among all professional  workers. However, real earnings growth among college and university  educators was essentially flat over the decade.
Unemployment rates among (1) electrical and electronics engineers and  (2) system analysts, programmers, and other computer-related workers  showed greater cyclical variation than did the unemployment rate for all  U.S. workers in professional occupations. In contrast, the unemployment  rate among college and university educators was somewhat less sensitive  to business cycle fluctuations, and in most years was close to or lower  than the unemployment rate for all professional occupations (see fig. 19).
Employment among electrical and electronics engineers declined by 29  percent over the decade, and there was no significant change in the level  of employment among systems analysts, programmers, and other  computer-related workers. In contrast, employment grew by 15 percent  among all professional occupations over the past decade. Employment  among college and university educators grew by 26 percent over the  decade (see fig. 20).
section_title: Appendix IV: Characteristics of H-1B Employers
paragraphs: This appendix provides additional analyses of H-1B employers in fiscal  year 2000 through fiscal year 2009 and more detailed analyses of the top  150 H-1B hiring companies in fiscal year 2009.
subsections: section_title: Many Employers Approved for H-1B Workers Were in Scientific, Professional, and Technical Services
paragraphs: Over a third of employers approved to hire H-1B workers between fiscal  year 2000 and fiscal year 2009 were employers that provided scientific,  professional, or technical services (see fig. 21). For example, in fiscal year  2009, at least 38 percent of employers approved to hire one or more H-1B  workers indicated that they were in one industry—the professional,  scientific, and technical services industry. Services within this industry  include legal services; accounting, bookkeeping, and payroll services;  architectural, engineering, and specialized design services; computer  services; consulting services; and research services. Also in fiscal year  2009, the manufacturing, health care and social assistance, educational  services, and finance and insurance sectors received the next-highest  share of one or more H-1B approvals—that is, 11, 10, 7, and 6 percent of  companies approved to hire H-1B workers, respectively.
section_title: Many Employers Approved for H-1B Workers Were Located in High- Technology Corridors
paragraphs: While H-1B hiring employers were located throughout the continental  United States in fiscal year 2009, they tended to be concentrated in several  high-technology pockets of the country such as Silicon Valley, Southern  California, and the Tri-State area of New York, New Jersey, and  Connecticut (see fig. 22).
section_title: The Vast Majority of Top 150 H-1B Employers Operated in the United States
paragraphs: GAO also reviewed data from Labor’s LCAs on the top 150 employers of   H-1Bs in fiscal year 2009, including whether the employer is H-1B- dependent; whether the employer is a willful violator; and the number of  petitions requested at each of the four possible skill levels. As indicated in  table 9, among the 150 companies for which Labor provided data, 24 were  H-1B dependent, and 9 of which were also deemed “willful violators.” The  remaining 126 firms were neither H-1B dependent nor willful violators. In  addition, on average, these firms indicated that they would pay workers at  the prevailing wage for skill-level one 52 percent of the time; the prevailing  wage for skill-level two 30 percent of the time; the prevailing wage for  skill-level three 12 percent of the time; and the prevailing wage for skill- level four 6 percent of the time.
section_title: Many of the Top 150 H-1B Employers Were in the Manufacturing or Educational Services Industry
paragraphs: Regarding industry, we found that, similar to the universe of all H-1B  hiring employers, most of the top H-1B employers were in the  professional, technical, and scientific services industry, although many  were also in the manufacturing industry or the educational services  industry. While the top 150 H-1B-hiring employers spanned a range of  industries, these employers were distinctly concentrated in a few, more  specific industry groups, including electronic computer manufacturing;  software publishing; custom computer programming services (firms that  write, modify, and test software for clients); computer systems design  services; and colleges, universities, and professional schools.
In terms of the type of employers, a relatively large number (44 of the 150  employers) were universities, compared to 6 percent of H-1B hiring  employers in fiscal year 2009. We also found that at least 33 employers  could be categorized as information technology (IT) services—those that  either provide staff or full project teams to other companies for IT projects  (see table 10).
section_title: Appendix V: Selected H-1B Program Laws
paragraphs: This appendix provides a chronological list of major laws and descriptions  of certain key provisions related to the H-1B program. Laws identified may  contain additional provisions related to the H-1B program not described  here, and there may be additional laws not included here that have made  various changes in the H-1B program. This is not intended to be an  exhaustive summary of all laws and provisions related to the H-1B  program.
Immigration and Nationality Act, ch. 447, §§  101(a)(15)(H) and 214(c), 66 Stat. 163, 168 and189- 90 (1952).
Authorized H-1B visas for aliens with a residence in a foreign country that  the alien had no intention of abandoning, who were of distinguished merit  and ability, and were coming to the United States to perform temporary  service of an exceptional nature requiring such merit and ability.
Immigration Reform and Control Act of 1986, Pub. L.  No. 99-603, § 102, 100 Stat. 3359, 3474-80.
Makes it an unfair immigration-related employment practice for most  employers to discriminate against any individual (other than an unauthorized  alien) with respect to hiring, recruitment, firing, or referral for fee because of  such individual’s origin or citizenship status. States that it is not an unfair  immigration-related employment practice to hire a U.S. citizen or national  over an equally qualified alien.
Requires that complaints of violations be filed with the Special Counsel for  Immigration-Related Unfair Employment Practices (established by the act)  within the Department of Justice.
Authorizes the Special Counsel to (1) investigate complaints and determine  (within 120 days) whether to bring such complaints before a specially trained  administrative law judge and (2) initiate investigations and complaints.  Permits private actions if the Special Counsel does not file a complaint within  such 120-day period.
Immigration Act of 1990, Pub. L. No. 101-649, § 205,  104 Stat. 4978, 5019-22.
Removed requirement that alien have a residence in a foreign country and  no intention of abandoning it, and revised statute to authorize H-1B visas for  aliens coming temporarily to the U.S. to perform services in a “specialty  occupation,” which was defined as one that requires, at a minimum,  theoretical and practical application of a body of highly specialized  knowledge and the attainment of a bachelor’s or higher degree in the  specific specialty (or its equivalent).
Established the LCA process, to be administered by Labor, that requires  employers to make certain attestations.
Limited the number of H-1B visas that could be issued during a fiscal year to  65,000 beginning in fiscal year 1992.
Limited the period of authorized admission as an H-1B nonimmigrant to 6  years.
Established “dual intent” provision, under which H-1B visa holders could also  pursue permanent residency.
Assigned responsibility to Labor to enforce program rules by investigating  complaints made by H-1B workers or their representatives against  employers, and by making referrals to Justice and imposing civil monetary  penalties where it finds a failure by the employer to meet certain required  conditions or the misrepresentation of material fact.
Immigration Technical Corrections Act of 1991, Pub.  L. No. 102-232, tit. III, § 303(a)(7)(B)(iii), 102 Stat.  1742, 1747.
Restricted Labor to reviewing LCAs only for completeness and obvious  inaccuracies.
American Competitiveness and Workforce  Improvement Act of 1998, Pub. L. No. 105-277, div.  C, tit. IV, §§ 411-418, 112 Stat. 2681-641, 2681-642  – 2681-657.
Temporarily raised the cap on H-1B visas for fiscal years 1999 to 2001 to a  high of 115,000; returned the cap to 65,000 for the following years.
Defined “H-1B-dependent employer” as employer that has    25 or fewer full-time equivalent employees in the U.S. and employs more  than seven H-1B nonimmigrants;    26 to 50 full-time equivalent employees in the U.S. and employs more  than 12 H-1B nonimmigrants; or    At least 51 full-time equivalent employees in the U.S., of whom at least 15  percent are H-1B nonimmigrants.
Required H-1B-dependent employers and those that committed a willful  failure or misrepresentation during the 5 years preceding filing of an LCA to  include additional attestations.
Provided that H-1B-dependent employers and such willful violators are not  required to make these additional attestations with respect to H-1B  nonimmigrants receiving annual wages of at least $60,000 or those with a  master’s or higher degree (or its equivalent) in a specialty related to the  job.
Required that H-1B workers waiting for final adjudication of their requests for  permanent residence status be given 1-year extensions of their H-1B visas  until their requests have been adjudicated.
Provided Labor increased authority to investigate and enforce program  compliance and assess civil monetary penalties against employers found to  be in violation of certain program requirements.
Required that steps be taken to maintain accurate count of the number of  aliens issued H-1B or other nonimmigrant visas.
American Competitiveness in the Twenty-first  Century Act of 2000, Pub. L. No. 106-313, §§ 102- 106, 114 Stat. 1251, 1251-55.
Temporarily raised the cap on H-1B visas for fiscal years 2001 to 2003 to  195,000; cap returned to 65,000 for the following years.
Exempts an alien from the H-1B cap if he or she is employed (or has  received an offer of employment) at    an institution of higher education or its related or affiliated nonprofit entity;    a nonprofit research organization; or    a governmental research organization.
Created increased portability of H-1B visas by authorizing H-1B workers to  accept new employment upon the filing by the prospective employer of a  new petition on his or her behalf. The H-1B worker’s employment  authorization may be extended until the petition is adjudicated.
United States-Chile Free Trade Agreement  Implementation Act, Pub. L. No. 108-77, §  402(b)(2)(B), 117 Stat. 909, 940 (2003) and the  United States-Singapore Free Trade Agreement  Implementation Act, Pub. L. No. 108-78, § 402(1),  117 Stat. 948, 970-71.
Created a new nonimmigrant classification available each fiscal year to up to  1,400 professionals from Chile and 5,400 professionals from Singapore,  known as H-1B1. These H-1B1 visas count against the H-1B cap.
H-1B Visa Reform Act of 2004, Pub. L. No. 108-447,  div. J, tit. IV, subtit. B, §§ 422, 424 and 425(a) 118  Stat. 3353, 3353-56.
Provided Labor increased authority to initiate investigations in cases where  the Secretary personally certifies there is reasonable cause and approves  the investigation. Information providing the basis for the investigation must  originate outside Labor unless it was lawfully obtained in the course of  another Labor investigation. In addition, receipt of information submitted to  Justice or Labor to secure employment of an H-1B worker cannot provide  the basis for such investigation.
Exempted the first 20,000 petitions received for individuals who have earned  a master’s degree or higher from a U.S. institution of higher education.
Raised the fee imposed on most employers when filing an H-1B visa petition  to $750 or $1,500 and imposed an additional fraud prevention and detection  fee of $500.
Increased the fees by $2,000 for petitions filed between August 13, 2010,  and October 1, 2014, if the petitioner has 50 or more employees in the U.S.  and more than fifty percent of those U.S. employees are in H-1B or L  nonimmigrant status.   uired attestations were as follows: (1) employer will pay H-1B workers the employer’s actual  wage for the position or the prevailing wage in the area, whichever is higher; (2) employer will provide  working conditions for H-1B employees that will not adversely affect the working conditions of workers  similarly employed; (3) no strike or lockout exists in the course of a labor dispute in the occupational  classification at the place of employment; and (4) the employer has provided notice that it is filing an  LCA application to the bargaining representative (if any) of its employees in the occupational  classification and area for which aliens are sought, or if there is no bargaining representative, by  posting notice of the filing in conspicuous locations at the place of employment.  uired  whether the other employer has displaced or intends to displace one of its U.S. workers within 90  days before or 90 days after the placement; and (3) employer has taken good faith steps, prior to  filing the LCA, to recruit in the United States using procedures that meet industrywide standards and  offering compensation at least as great as that reuired to be offered to H-1B nonimmigrants, U.S.  workers for the job and has offered it to any U.S. worker who applies and is eually or better ualified  for it.
section_title: Appendix VI: Comments from the Department of Homeland Security
section_title: Appendix VII: Comments from the Department of Justice
section_title: Appendix VIII: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: Michele Grgich (Assistant Director) and Erin Godtland (Economist-in- Charge) managed this engagement. Core team-members included: Nisha  Hazra, Melissa Jaynes, and Jennifer McDonald (Education, Workforce and  Income Security); and Hiwotte Amare and Rhiannon Patterson (Applied  Research and Methods). In addition, the following people made significant  contributions to this work: James Bennett and Susan Bernstein (Education  Workforce, and Income Security Issues) and Susan Baker, Melinda  Cordero, Namita Bhatia-Sabharwal, Mark Ramage, and Shana Wallace  (Applied Research and Methods) and Ashley McCall (Library and  Information Services). Stakeholders included: Barbara Bovjberg  (Education, Workforce, and Income Security); Tom McCool (Applied  Research and Methods); Ronald Fecso (Chief Statistician); Sheila McCoy  and Craig Winslow (General Counsel); Richard Stana and Mike Dino  (Homeland Security and Justice); Loren Yager and Jess Ford  (International Affairs and Trade); and Muriel Forester (Strategic Planning  and External Liaison). Referencers included Jamie Whitcomb (lead),  Alison Grantham, and Karen Brown (Education, Workforce, and Income  Security) and DuEwa Kamara and Courtney LaFountain (Applied  Research and Methods).