High H-1B denial rates hit IT-service providers most

A new analysis of official data reveals US branches of Indian IT companies are bearing the brunt of it, compared to American users of these temporary work visas for high skilled foreigners.

The rejection rate for H-1Bs has remained high under the Trump administration compared to previous peak levels but a new analysis of official data reveals US branches of Indian IT companies are bearing the brunt of it, compared to American users of these temporary work visas for high skilled foreigners.

US tech companies, which are leading users of H-1B visas that often go to Indians, also saw their rejections go up but not as significantly. (File photo)

But the discrimination has nothing to do with the country of origin of these companies but the nature of their business, says the author of the report. Providers of professional IT services are worse hit than product makers.

From 2% of its petitions being rejected in 2015, Infosys saw it go up by 43 percentage points to 45% up to the third quarter of 2019, according to an analysis by the National Foundation for American Policy, a non-partisan think-tank, of data disclosed by the US Citizenship and Immigration Services, which runs the H-1B programme.

Rejections for Wipro, Tech Mahindra, TCS and HCL America went up by 46, 37, 28 and 33 percentage points over the same period respectively.

The most astounding jump, however, was accounted by Syntel, a US company founded by an Indian American — from 1% to 63%.

US tech companies, which are leading users of H-1B visas that often go to Indians, also saw their rejections go up but not as significantly. Rejection rates for Amazon, Microsoft, Intel and Google went up by mere 5,7, 6 and 2 percentage points. Facebook’s went up by even less, 2 percentage points, and there was no change whatsoever for Apple.

These numbers are for “initial employment”, and not “continuing employment”, which are in the nature of extensions. H-1B visas are given a period fo three years, which can be extended for a maximum of up to another three years.

There doesn’t appear to be pattern indicating targeting of companies as per their countries of origin. Capgemeni, a French company, saw its rejection rate go up by 50 percentage points from 5% in 2015 to 55% in 2019. The rates for Ireland’s Accenture and UK’s PricewaterhouseCoopers jumped as well, by 48 and 29 points respectively.

The targeting, if any, is that of companies that provide professional and information technology services — outsourcing services — as against that make products.

“The data show that as a result of changes in policies at USCIS both US and Indian companies that provide professional and information technology (IT) services to customers in the United States have higher H-1B denial rates than other companies, particularly U.S. product companies like Apple,” said Stuart Andersen, author of the NFAP report released recently.

The high rates of rejection are primarily due, he added, to the USCIS changing the legal standard “for how it adjudicates H-1B cases, particularly in situations where an H-1B visa holder works on a contract that requires him or her to go to a customer’s location (as opposed to offsite work)”.

NFAP first reported the spike in rejections in April based on expansive data hub on the H-1B visa programme launched then. It had reported a sharp 33% increase in denial rates for initial employment — not continuing, extensions — for the first two quarters of 2019 over 2015.

The new report said rejection rates declined to 24% in the third quarter in comparison, but the over denials remained high.

The Trump administration has targeted the H-1B visa programme with a view to ensure American jobs do not go to foreigners — in keeping with the president’s “Buy America, Hire American” vision — and has subjected it to intense scrutiny ostensibly to prevent fraud and abuse.

The United States grants 65,000 visas under this programme annually to highly skilled foreign workers hired from abroad and 20,000 from foreigners enrolled in US colleges and universities. More than 70% of these visas go to Indians, hired by both US subsidiaries of Indian IT companies such as TCS and Infosys, and US companies such as Microsoft and Facebook.