H-1B Denials Still High for Consulting Firms… But for How Long?

A recent analysis by the National Foundation for American Policy (NFAP) showed that, after years of steadily rising, the denial rate for H-1B visa applications had leveled off by the third quarter of fiscal year 2020. At least some of that flattening had to do with how the U.S. government processes applications—but there’s still quite a bit of speculation about whether the denial rate will begin rising again once Joe Biden is inaugurated President.

In the meantime, it’s worth looking at which tech companies and consultancies have been hit the hardest by these denials. NFAP analyzes long-term H-1B trends, so we can see how that denial rate has shifted between 2015 and 2020 (NFAP draws all of its data from the USCIS H-1B Employer Data Hub). As you might expect (and can see from the following chart), business-services and consulting firms such as Infosys and Cognizant have taken the biggest hits in recent years, while the denial rate at some of the largest tech companies, while elevated, hasn’t changed all that much:

If there’s a legacy to the Trump administration’s attempts to reform the H-1B, it’ll probably be the policies designed to reduce business-services and consulting firms’ use of the visa. For years, critics have argued that those companies abuse the visa to bring in cheaper workers, undercutting what American technologists. 

Those business-services and consulting firms have intermittently tried to push back. Earlier this year, for example, many of them launched a lawsuit against U.S. Citizenship and Immigration Services (USCIS), arguing that they deserved a $350 million refund on H-1B visa application fees. In 2018, the IT Serve Alliance filed a lawsuit that accused USCIS of approving visas for too short a term (weeks, rather than the “standard” three-year term). Other fights are also working their way through the court system.

Despite that pushback, USCIS and the Trump administration have remained locked on this reform path. The rising rate of denials, along with some other recent administrative moves have been “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).

The Trump administration’s recent attempt to adjust minimum wages for H-1B workers could ding consulting firms still further. Although the “average” salary for H-1B workers at many firms is often quite high, that number doesn’t represent the totality of what people on the visa actually get paid. The other big question, of course, is what immigration moves the Trump administration might make in its final weeks before Biden comes into office. 

9 Responses to “H-1B Denials Still High for Consulting Firms… But for How Long?”

  1. What, exactly, are the reasons given for the increase in denials? I suspect it is from more administrative issues rather than an actual investigation into the training, education level and competency of the proposed employee.
    USCIS review should go further and verify the actual training, education level and competency – I’ve had first-hand experience with Cognizant, Infosys and Wipro contractors and based on that I would say additional increases in denial rates are justified.

  2. I don’t think it’s going to change under Biden immediately. Trump has left America in a terrible state of disarray and Biden is going to be very busy trying to fix more pressing issues than H1B. It’s going to take time to assess the current policy in order to determine changes to it. I read many comments here from Indian workers who are happy that Harris will be the VP but they need to remember that Harris was born here in America and her mother did not come over on an H1B visa as a software engineer. I hope the Biden administration gets around to addressing the systemic age discrimination that is rampant in IT.

    • What’s wrong with the policy of getting paid more for H1B so no one gets exploited? The also gives US citizens a competitive edge instead of bringing cheap labor at 40K. Trump fights for America and Biden will destroy America

  3. As someone who has hired IT Professionals for 25 years, the situation is complicated but purely driven by cost and indirectly supply and demand. The Internet and VPN has given companies the ability to hire someone virtually anywhere in the world and as long as they show up online/on time, demonstrate the skills they provided on their resume and deliver results utilizing those skills, companies will look nearby and anywhere around the Globe for the lowest cost resources. So what happens, if H1-B’s are restricted, then companies start sourcing offshore or nearshore (Mexico/South America) to find the talent they need at the cost they want. Also, our H1-B restrictions simply moved the same technologists across the Canadian border where they hand out the equivalent visa like business cards. The only way to combat the issue is what I’m amazed Trump did not do, put a service tax or tariff on both H1-B holders and Offshore technologists. In other words, American companies are going to pay the going US hourly rate regardless of where they get the resources around the World. Thus, these same companies would be incentivized to hire and develop US Citizens and Green Card holders instead of virtually “importing” cheap labor at a discount. On a macro level, another reason that the government should tax this labor is that when a US company sends money for labor to an overseas country, the recipient is spending that money in their local economy and paying tax to their local government and not spending it back in the US economy. This artificially deflates US consumption and slows US economic growth. Trump’s team understood this and was trying everything to remedy it. Like most issues, Trump himself had a very hard time articulating the issue, much less the remedy, though he fully put his weight behind his experts.

  4. “For years, critics have argued that those companies abuse the visa to bring in cheaper workers, undercutting what American technologists.” not argued its a fact, I have witnessed it in 3 companies. These companies need to PROVE, there is no one in the US that can fill the role and if a H1Ber is hired his/her skills need to be verified to be so different that no one in the US can do the job.

    • These Indian IT cos have been abusing and milking US cos. for decades now. These IT firms’ big bosses and employee make big bucks- they abuse the H1, L1 visa systems.
      Don’t understand why these visas still keep getting issued. I’m sure there are just plenty of locally and talented (read eligible) US residents and Citizens available to fill these jobs. What country provides the first right on its own jobs to outsiders. Unfathomable

  5. “Trump has left America in a terrible state of disarray”
    I think what you meant to say is that Infosys and other Indian so called
    “consulting” companies have abused the H1B system and left it in a
    “terrible state of disarray.” And further, you’re angry that Trump has tried
    to level the playing field and wring out the abuses because let’s face it,
    even a lower salary in the US beats the few rupees you’d garner in Mumbai.
    Will Biden change things ? Who knows, tech company contributions are
    certainly trying to influence his administration. Time will tell.