USCIS Faces $350 Million H-1B Lawsuit from Tech, Consulting Firms

A consortium of tech companies wants a $350 million refund on H-1B visa application fees—and it’s willing to sue U.S. Citizenship and Immigration Services (USCIS) in order to get it.

USCIS “has unlawfully charged United States companies approximately $350 million dollars in visa fees (likely more) over the past six years,” reads the lawsuit (PDF), filed in the U.S. District Court for the District of Columbia. “Plaintiffs now seek a refund.” (Hat tip to NFAP for posting the link to the court documents.)

In addition to the IT Serve Alliance, which claims it has more than 1,250 tech companies as members, the three named plaintiffs in the suit are iTech, SmartWorks, and Saxon Global, all three of which are staffing firms.

These plaintiffs insist that the USCIS is overcharging them for trying to renew the H-1B visa for immigrant workers who are already in the country; they argue that, under the law, only those workers entering the United States for the first time (i.e., initial applications) should be charged the $4,000 fee.  

“An application for a change of status is not an application for admission,” the lawsuit states. “The Agency, therefore, started charging United States companies the Border Admission Fee on applications where they did not use the border.”

The named plaintiffs are all so-called “50/50” companies, in that they have 50 employees and at least half their workforce is on the H-1B or L visa. “Though ITServe, ITech, SmartWorks, and Saxon Global do not know the total number of 50/50 companies that paid these unlawful fees for the past six years,” the lawsuit continues, “the Congressional Budget Office projected the fees would amount to $150 million a year under PL 111-230 and $400 million a year under PL 114-113 and PL 115-123.” That’s the baseline that the plaintiffs used to arrive at that $350 million figure.

While this lawsuit might seem like an arcane squabble over accounting, it neatly encapsulates much of the fight over the H-1B visa at the moment. The Trump administration has systematically cracked down on the H-1B application process, with USCIS denying an ever-increasing amount of visas. Consulting and staffing companies have been hit especially hard by this trend, as you can see from the following graph:

“At least 12 companies that provide professional or IT services to other U.S. companies, including Accenture, Capgemini and others, had denial rates over 30 percent through the first three quarters of FY 2019,” read the National Foundation for American Policy’s report on the matter. “Most of these companies had denial rates between 2 percent and 7 percent as recently as FY 2015.”

Meanwhile, “pure” tech companies such as Amazon and Google haven’t experienced the same spike—with the exception of IBM, which also has a consulting and business-services arm:

USCIS has made it clear that the denials, along with some other recent administrative moves are “designed to protect U.S. workers, cut down on frivolous petitions, strengthen the transparency of employment-based visa programs, and improve the integrity of the immigration petition process” (to quote a USCIS spokesperson speaking to Mother Jones last year).

In response, tech and consulting firms have fired off lawsuits against the federal government. The IT Serve Alliance filed a lawsuit in 2018 that accused USCIS of approving visas for too short a term (weeks, rather than the “standard” three-year term). That’s in addition to the more than 40 immigration-related lawsuits filed against the federal government by outsourcing and consulting firms. (And let’s not forget the advocacy groups filing lawsuits to make the federal government crack down harder: Also in 2018, for instance, Save Jobs USA filed a suit against the Department of Homeland Security (DHS), claiming that the agency was taking too long to rescind the ability of certain spouses of H-1B visa holders to obtain the H-4 EAD, which would allow them to work in the United States.)

In light of that history, this most recent lawsuit over $350 million in “overcharges” is yet another in a long string of attempts by consulting companies to get the federal government to moderate its immigration approach. But so far, these lawsuits haven’t stopped USCIS and other agencies from continuing to tighten up the requirements and review process for the H-1B, H-4 EAD, and other visas.

17 Responses to “USCIS Faces $350 Million H-1B Lawsuit from Tech, Consulting Firms”

  1. I.T tech companies get what deserve and nothing in return, stop trying to bring illegals into country for lower pay than Americans. YOU greedy bastards. YOU want to gamble on a immigrant then want a refund when they don’t get approved of let in to country.

    • Asha Lanier

      How is going through a visa program cause illegal immigrants? Illegal immigrants come here without going through a visa process and open borders. Stop being petty and hateful!! Go after those jobs if you want them. Apparently Americans are too dumb to work IT positions lol…bring back simple manual labor and cause more health issues

      • Maha Guru

        I was almost trying to be sympathetic to your response when you mentioned about “Americans are dumb for IT work”.. First, Americans invented almost all concepts of IT. Second, so many perfectly good and highly quality American IT were removed by absolute low-cost low quality Indian H-1B. Every attempt to bring H-1B reform to bring high quality people only has been lobbied against by greedy rich tech! In the name of fake STEM crisis, these companies have manged to keep pays down and in the process systematized age discrimination. I know how this system works since I WORK IN THIS INDUSTRY AND I SEE HOW H-1B HAS BEEN ABUSED,

        The only thing is H-1B is NOT about illegal immigration!

      • Yeah, Americans are too dumb. It’s more like they can’t accept the wages that the third world can live on for the same amount of work. Who are the dumb ones? Maybe the ones that work 80+ hours a week for peanuts and live in a shack.

      • Hot Potato

        “Apparently Americans are too dumb to work IT positions lol” Truly your profound ignorance can be summed up by that one statement. I remember reading about the laying of laid off of Dinsey’s 250 of its US IT staff to replace them with staff from India, who were hired in on H-1B foreign employee visas between 2014-2015. One US worker said that her replacement couldn’t open an Excel spreed sheet. Others remarked of a very limited knowledge of the field. Books and lab work only get your so far. Yeah, it’s true with more automation a skilled workforce can be replaced with an unskilled one to some degree.

      • AmericanSTEMWorker

        “Apparently Americans are too dumb to work IT positions lol”

        Americans invented most of these technologies anyway, founded all of these companies too. You would rewrite history to suit your corrupt agenda, but we all know your country struggles to even maintain fresh water, and basic sanitation. If we are so dumb then why are you the ones defecating in the streets, and washing, fishing and dumping in the same rivers?

  2. The fact of the matter is that for any H1b action the USCIS should and must re-verify the labor need, the correctness of the application, the truth of the application. It is not meant to be simply push a button. These companies do not have a leg to stand on. Simply because someone entered the country using a certain visa does NOT mean they can shift the conditions of that visa around without scrutiny.

  3. So these IT firms get together to fight the government but unions are bad. lol The hypocrisy is rich. Also, it is worse than that. We Americans built amazing companies, infrastructure, and technologies but now all these Indian owned companies are undercutting us (Accenture, Soghetti), offshoring jobs to places with shit labor laws, and half of them can’t reboot a computer without instructions. Looking at you Wendy’s Corp. Getting rid of all their IT just to offshore. Looking at you ATT.

  4. Jason S Brumfield

    Time to stop giving away our tax dollars to Illegals makes no difference if they are H1B’s or not, stop the Low paying jobs for American’s and keep asking U.S. Tax payers for more money, Netflix increase their monthly fees as have all the other companies, MS, Amazon, expecting American’s to pay more for their services, as if they do not make enough, for Gates, Bozo, Zuckerberg and the other Lib-A-Ticks, sucking of Working class American Tax payer’s enough is enough of us paying for everyone else that do not work, can not even get a decent phone call from these H1B workers. Or try to understand them, most work out of the Country any way’s.

  5. These companies don’t even deserve to be called IT, they just do staffing, they don’t create apps, OS, databases, they never invented anything of value. This lobby called IT Serve Alliance is mostly composed by Indian staffing companies (again, calling them IT companies is misleading at worst), so as long greedy American companies (and Indian staffing scammers) continue to enable the H1B visa fraud by bringing cheap and unqualified labor, we Americans will continue to fight an uphill battle.

  6. Our best defense is to get informed, learn how the replacement of American IT professionals work (I won’t describe it here as it has been already documented and explained in different sites, so I am sure many of you know how is their game plan), also learn how H-4 spouses open shady staffing companies while in the US taking advantage of their contacts in India, how they manage to bring cheap and unqualified labor using loopholes, steal personal information from resumes submitted by naive US applicants for jobs that don’t exist or for which they are set to fail if they even get interviewed (so that these so called staffing companies report back to Dept of Labor by telling them they couldn’t find any qualified Americans).

  7. Brian Quinn

    When I started in the IT business there was like 90% US citizens to 10% Visa or offshore. Now the 50/50 is more like 25% US citizens and 75% Visa or offshore. So many millions of dollars from tax payer funded government agencies. We just had to take it. Didn’t matter whether it was Democrats or Republicans in office. They all sold out the American worker. Insanity that the companies that benefited the most on this gravy train want to sue the same people for reversing the trend of a horrible injustice.

    • BigBeaver

      One of the paramount problems of companies like those mentioned (aside from companies feeding from the trough they offer), and even those few all powerful individuals at the top of the monetary food chain, is that by primal instinct they pull out the sword to preserve their existing power and economic model…rather than exercise their IQ and adjust their models, capitalize on the shifting landscape, innovate and diversify. I guess the current “geniuses” haven’t quite figured out how to exercise that mental muscle yet, despite lengthy history demonstrating – as if part of a natural law – mental muscle always wins.