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The H-1B visa program was designed to attract highly skilled global talent to the United States, filling specialty roles that domestic workers could not.
Yet over the years, the program has come under scrutiny for one particularly controversial practice: replacing U.S. tech employees with foreign workers.
About a decade ago, several large businesses were found laying off American workers and hiring foreign workers through H-1B visas. The companies didn't actually apply for the visas. Instead, they used an outsourced staffing firm to replace the workers.
Reports and investigations have shown that some companies, especially large tech firms and outsourcing vendors, have laid off American employees while hiring H-1B workers for the same positions.
This practice, often referred to as "visa arbitrage," can be motivated by cost savings, as H-1B workers are sometimes paid lower wages than the U.S. employees they replace.
One of the biggest cases was Southern California Edison, which eliminated more than 100 positions and outsourced to an Indian IT company. At the time, this move was largely condemned, but the government said it was perfectly legal
The attorneys at The Orlando Law Group specialize in helping businesses with employment and immigration issues in Orlando, Sanford, Winter Garden and Kissimmee and are here to help business owners continue to be successful.
With the changes to H-1B Visas, the use of staffing companies may become significantly more difficult. It's not just tech workers; many other businesses use these types of staffing companies for employees.
For instance, healthcare uses H-1B visas for doctors, lab technicians, case review and much more. Education and research facilities use H-1B visas for professors, researchers and others. Even small businesses, like restaurants, use staffing firms for foreign workers, particularly in seasonal tourist locations.
Why? Using staffing firms like this can be less expensive without the strings of sponsoring employees with an H-1B visa.
Moving forward, using an H-1B visa in this manner may be significantly harder.
For instance, if the government adheres to the statutory limits of issuing an H-1B visa, the number of visas will be significantly reduced. Plus, there is still uncertainty on who the $100,000 payment truly covers.
In addition, lawmakers are starting to limit who can use H-1B visas. In Florida, Governor Ron DeSantis announced that all higher education institutions in the state stop using H-1B visas. There could be legislation coming into force to prevent other organizations from using them as well, maybe even private businesses eventually.
Other aspects that may affect these large-scale uses of H-1B visas include moving from a random lottery to a wage-based selection system. This change prioritizes higher-paying positions, meaning the lower-wage placements commonly used by staffing firms may no longer have the same likelihood of selection.
Plus, with the crackdown on immigration, there will be increased compliance and oversight.
Large staffing firms have historically faced scrutiny for practices such as "benching" H-1B employees, misclassifying job roles, or submitting multiple petitions through affiliated entities.
Strengthened oversight from USCIS and the Department of Labor now requires firms to maintain meticulous documentation and adhere strictly to wage and role requirements.
While this promotes fairness, it also increases administrative costs and potential legal exposure for businesses.
The H-1B process is changing quickly and businesses that use this program need to make sure they follow these changes closely – like we are doing at The Orlando Law Group.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
