Top 10 Reasons Why The H-1B Visa System is Unfair

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The politicians and mass media are full of bogus reasons as to why the H-1B Visa and the Immigration System is unfair but to be honest most of those reasons are either completely or partially false or in fact a problem because of them.

I will also do this for other visas like E-3, J-1, F-1, etc. as well as the Permanent Residency/Green Card system and thus US Immigration as a whole.

Let’s take a one of those major reasons as an example;

According to them the “h-1b visa system displaces US workers, causing local unemployment to be higher”

  • the fact is that if it wasn’t for immigrants, companies like Google, eBay, Intel and Paypal may never have begun in more recent times. How many more Americans would be out of work directly and indirectly in related industries?
  • If a person works a lot harder creating a new product, providing a great service so a new client is earned, etc. then that company now will hire more people. Immigrant workers not just today but throughout the entire US history have worked a lot harder their local counterparts because they have too just to survive. (incidentally this is also what ultimately pushes wages hire for US workers as well dispelling that myth as well)
  • A foreign worker with high education in skills in engineering who comes over to be a lead engineer at Apple or work in the Alternative Energy or Bio Tech arena is not displacing a manufacturing worker who lost their job at GM or Chrysler because of their mismanagement. The unfortunate reasons why the average US worker is losing their job is because of terrible American executive management at the companies for decades and corresponding terrible American politicians and their policies in Government. (the politicians and media use foreign workers to deflect blame from where it rightly should be at themselves)

Now let’s get to what you have all been waiting for the Top 10 Reasons why the H-1B visa system is unfair.
This list is not in any particular order as to some degree they are all as bad as each other. (you will see many of this Top 10 list have links as their dedicated posts already about those topics with even more information than the snippet here)

1. Visa Application Cost – Currently if a company chose to apply for the right and was serious about hiring a foreigner they would have to pay about $2,000 in application costs ($1,000 without premium processing) that is not refundable for the application as these days there are always more applications than annual visas available. Then a further $1,000 in extra fees if the petition is accepted. Where does this money go? Well to the US Government of course for vague reasons like Fraud Detection, US Retraining, Homeland Security, etc. So in other words the same old excessive pork barreling for the US Government and politicians.

2. Premium Processing – Ok for the USCIS to process your H-1B visa application “faster” (i.e. 2 week guarantee) and for your registered attorney or company to have phone access to the case officer assessing your application you can pay this extra $1,000 fee. While this doesn’t necessarily “help” your application, all the big companies tend to do it for their applicants to ensure things are correct and of course they get the most visas. In the end it is a fee that benefits only those that can afford to pay it.

3. Visa Lottery – Since the H1B visa has been capped at the 65,000 mark, oversubscription has been a huge issue. Last year they received 130,000 applications on the first day alone on April 1. Even the 20,000 cap for foreigners with US Masters Degrees s being oversubscribed and going to a lottery. The fact that so many companies need the specialized talent but the US Government has set some arbitray limit is not helping the anybody in the US economy.

4. Lawyers – We have consistently said the only people who benefit from this process all the time is the Immigration attorney. For them it doesn’t matter whether a foreigner gets a visa or doesn’t. As long as the system is so convaluted and unnecessarily complex they can just charge more fees. And you wonder why their lobby is so strong in Washington!!

5. Lack of Access by Smaller Companies – For many of the reason I have highlighted above with excessive fees, lawyers, etc. puts the whole process beyond smaller companies, companies in non major centers and many start-ups. If these companies had better access many cities around the country would not be dying and many innovative start-ups could turn into houselhold names and benefit the US as a whole.

6. Visa Quota – As we mentioned there is an arbitray quota of 65,000 H-1B visas each year with an extra 20,000 H-1B visa for foreigners who may have US Masters Degrees. These figures are based on nothing and just random figures to suit nothing but a few politicians in Washington. Given that Bill Gates, richest man in the world who created one of the world’s biggest brand in Microsoft thinks this figure should be more around 500,000 for the US economy, you can see where this may be an issue

7. Lack of Incentive for Permanent Residency/Green Card – An immigrant who comes to the US legally and works hard, pays taxes, etc. it is not the easiest path to Permanent Residency. It is again up to the employer to pay for the application costs and due to the completely overworked and innefficient USCIS and complexity of the process, it can take many years for this to even come through. Some applicants have to stay in their same role foregoing promotions and salary increases, better opportunities at other companies, etc. for 5 or more years just so this process can play out.

8. Tax Burden – An H-1B immigrant has to pay all the taxes a US worker has too; being Federal, State, City if applicable, Social Security, Medicare, etc. However unlike a US worker they have no access to Social Security benefits or Medicare. So they are helping the US worker completely but getting no benefit for themselves.

9. Change of Employer – To change employers, an H-1B applicant’s new company has to pay almost all of the same application costs that we said can be around $3,000. The actual complete approval process itself can take many months. However from the date an H-1B leaves their current company they have only 10 days to get initial approval from Department of Labor  for their new company or they are considered out of status and have to leave the US. Imagine if you were laid off suddenly and you had 10 days to not only find interview but also secure an offer and then submit the approval documents or you would be deported.

10. Hire Dates – So the applications open on April 1 each year and for a few luck people whose applications go really well they may their approval by the start of May. Can they start working then? NO!!! 
The official start date for H-1B visas is October 1 so companies, foreign employees and thus the US Economy as a whole is put on hold for this date to tick over for work to begin

BONUS: Visa Stamping & Travel – I put this in the bonus section as it doesn’t necessarily effect the US Company, US Worker or US Economy but more just the foreign worker. Should this person in their measly 2 weeks leave a year get to be able to go back home and see their families and friends, for the first time they have to plan a visit to the local US consulate just to get their visa stamped. Seems like a simple process but usually takes half to 3/4 of a day to do. That’s a large part of a short vacation spent on US beuracracy!!

J-1 Visa – Internship (INT) & Professional Career Training (PCT) Programs

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We have covered in a previous post the J-1 Visa Work & Travel Program (WAT) and today we will look at probably a lesser known part of the very flexible J-1 visa known as the Internship (INT) and Professional Career Training (PCT) programs. These programs can be for a maximum of 18 months.

The INT and PCT programs are part of a broad group of programs called Trainee programs. Also under this umbrella include;
– medical trainees
– veterinary trainees
– pharmaceutical trainees
– aviation trainees
– academic/research trainees

With many of the above programs, you are generally sponsored directly by the institution hosting you like a University or Aviation Training facility and not by a 3rd party organization. This is different to most of the J-1 visa program as a 3rd party organization generally has to sponsor your visa.

I will say for your information that many people use these J-1 visa programs a prelude to life in the US before moving on to a full working visa sponsorship like the H-1B visa or E-3 Visa. The J-1 visa also has a J-2 dependent visa for generally spouses of trainees to present in the US as well. The J-2 dependent visa has the added bonus allowing spouses to work as well, which makes it more flexible in some ways than the H-4 visa which is the partner visa of the H-1B visa.

I will focus on the INT and PCT programs as that covers most people who want to work in the US who may be have qualifications in business, arts, design, fashion, media, engineering, IT, science, law, etc. So you can see there is a broad range and can cover most people.

Internship (INT) Program:

  • The student must be enrolled on a full-time basis at a nationally accredited tertiary institution like a college or university but they can start their role up to 6 months from their graduation.
  • The person must be at least 18 years old.
  • The person must have sufficient English language ability to function normally in a business setting.
  • The student must be at least one year into their chosen field of study and the end result of their study must result in a degree, certificate, qualification, etc. like a Bachelors Degree
  • The trainee program should have correlation with the student’s course of study (this is loosely applied given that most roles have such vague job descriptions)
  • You can go on the INT program multiple times, however it has to be shown that the new program is not a duplicate of a previous program

Professional Career Training (PCT) Program:

  • The trainee has to be graduates of a tertiary institutions with at least 1 years non-US work experience related to their qualification OR have at least 5 years work experience
  • The trainee must be a high school graduate
  • The trainee should be between 20 and 40 years of age.
  • Like the INT program, the person must have sufficient English language ability to function normally in a business setting.
  • Also similar to the INT program, if this is a subsequent PCT program it has to be shown it is not duplicative of previous training or work experience
  • Since 2007, a 2 year Bearer Rule applies to all countries. (aka 2 year residency rule or 2 year home residency rule) This basically means after a PCT program you have to remain outside the US for at least 2 years before being allowed to apply for any other US visa (not including visa waiver program).
  • There is a 2 year residency rule waiver option in certain circumstances

It is up to the Sponsor Organization like CIEE, Inter Exchange, Intrax, etc. to confirm that the company hosting you is legitimate, as is your role and your background information. To verify your job details some sponsor organizations only have locations within the US and do it all from there where as others have offices or partner organizations all over the world who do a lot of the verification of identity and qualifications work locally.

That organization also has to validate your Insurance poilicy which is mandatory for the J-1 (and J-2) visa holders. The type of health insurance only has to be a travel type policy but must cover your entire time in the US. Some companies like CIEE actually administer their own policy which is mandatory for you to take up should they be your sponsor.

We also have more information on How to Apply for your Social Security Number as well as general Health Insurance Information in the US.

There are a number of costs associated with being able to get the J-1 visa and these include;

– Program Fees to your Sponsor Organization and/or Local Affiliate (generally this is calculated by how many months your program is can be up to $1,500 for a full 18 month program last time I looked). Often this may include your Insurance as well
– Insurance coverage if not included above. (your sponsor organization will often give you a list of approved providers if they don’t include themselves)
– SEVIS Fee (I-901 form) which stands for Student Exchange Visitor Information System (currently $200 for most people but is occasionally free for some government sponsored cultural positions)
– US Consulate/Embassy Application costs (or if within US, USCIS transfer visa fees)

Some Important Definitions and Information for this Trainee category of J-1 Visas:

– DS-2019 Form – This is the form provided to you by your sponsor organization after they have approved your position that you have to take to the consulate for your visa application and that you show when you enter the United States. The number on that form is an important identifying number.
– Letter of Good Standing – If you decide to travel outside the US during your J-1 visa program, you need to get a letter from your sponsor organization that you may need to show US Customs when you re-enter the US that your visa is fine as far as your sponsor is concerned (more often than not you won’t be asked for this but is important to have)
– Sponsor Organization – As mentioned for INT and PCT, you will be sponsored by a 3rd party organization who is registered with the US State Department. They will report your progress and other details periodically
– Host Company – If you are on the INT or PCT program, the company that hires you is not called your employer but your Host company
– SEVIS – As mentioned aboved this system fee is something you have to pay, It came in after September 11, 2001, to keep track of high school, work and travel, trainee and other student/cultural visa holders.
– 2 Year Bearer Rule – As I also said above with the PCT (and also programs like high school exchange particularly if US Government funded) you will have the 2 year residency rule applied to be outside US once your program completes. The link I attached is how you can potentially get this waived but it can be a very long process and not always successful. Before mid 2007, uS consulates abroad would arbitrarily apply this rule to visa (usually always to non Western countries citizens) but now it is mandatory for all countries
– Taxes – The good news on the J-1 visa if you are earning an income is that you DO NOT have to pay either Social Security (aka FICA or payroll tax) or Medicare taxes. This is a great saving as Social Security taxes are a lot and given the people on work visas like H1B, E3 and L1 have to pay these taxes with no access to the benefits, it certainly is fair for the J-1 visa holders.

In terms of finding a postion. For the most part part it is best to use the services of your Sponsor Organization or Local Affiliate as they have a list of companies willing to hire foreigners. Often the fact you are using their list while probably making it easier to land a role mean that the Program Fees you pay will be on the higher side of the numbers described above.
Many people avoid paying the higher program fees by searching on their own which can be difficult from abroad but certainly not impossible and thousands do it each year. For the best resources as to where to find a trainee or internship position, use this link.

Finally in terms of salary. You should note many, if not most roles are unpaid or often paid with a basic stipend or living expense but certainly not enough to live AND entertain yourself on. Particularly in the current economic climate, many companies are often looking for cheap labor. However there are many fully paid positions as well, you just have to fight harder 🙂
I will cover this is an upcoming post but negotiation of salary is a big part of US culture, so if you play your cards correctly you can often get more than what is advertised and certainly more that what may be initially offered.

See you soon in the USA 🙂

CJ