Built By Immigrants: the H1B Visa and How It Affects Startup Progress

On August 14, Launch DFW will partner with FWD.us, the Silicon Valley-backed immigration reform group to promote awareness to the need for immigration reform. While many of the Launch DFW members hold differing views on the correct next steps of immigration reform, we can agree the lack of H1B visas can play a role in slowing down the progress of a start-up.

Technology firms and start-ups are at the forefront of suffering for lack of skilled workers – in fact, the Austin Chamber of Commerce touts that there are 7,000 jobs in that town alone that are not filled due to the lack of skilled workers. We believe an increase in the pool of talent can help start-ups realize their potential and because of this, we need to modify the amount of H1B visas allowed. First, we need to understand what an H1B visa is and the process to acquire one.

What is an H1B Visa?

According to workpermit.com, an H1B Visa is defined as a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields such as in architecture, engineering, mathematics, science, and medicine. In addition, these visas are very restrictive. Some of the requirements for H1B Visa eligibility include:

  • You must have an employer-employee relationship with the petitioning U.S. employer.
  • Your job must qualify as a specialty occupation
    –  A bachelor’s degree or higher degree or its equivalent is normally the minimum requirement for the particular position.
    –  The degree requirement is common for this position in the industry, or the job is so complex or unique that it can only be performed by someone with at least a bachelor’s degree in a field related to the position.
    –  The employer normally requires a degree or its equivalent for the position.
    –  The nature of the specific duties is so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor’s or higher degree.
  • Your job must be in a specialty occupation related to your field of study.
  • You must be paid at least the actual or prevailing wage for your occupation, whichever is higher.
  • An H-1B visa number must be available at the time of filing the petition, unless the petition is exempt from numerical limits.

How Many H1B Visas are there?

In 1998, the cap for the H1B Visas was 115,000, yet the cap was rarely reached. The American Competitiveness in the Twenty-First Century Act of 2000 temporarily increased the cap limit to 195,000 for FY 2001-2003, and exempted all individuals hired by institutions of higher education or nonprofit and government research organizations. In 2004, the H-1B Visa Reform Act mandated that “…the first 20,000 H-1B petitions filed on behalf of aliens with U.S.-earned masters’ or higher degrees will be exempt from any fiscal year cap…”

Additionally, universities, nonprofit research organizations affiliated with universities, and governmental research organizations are exempt from the H-1B cap. For all other new H-1B applicants, the Congressionally mandated H-1B visa cap is 65,000 annually.

Limits and the Problem

With the now 65,000 H1B cap, the number of those applying for H1B Visas who get denied is staggering. In fact, For FY2008, the entire quota was exhausted before the end of the first day that applications were accepted, April 2. The 123,480 petitions received on April 2 and April 3 that were subject to the cap were pooled, and then 65,000 of these were selected at random for further processing. This means that in the first two days of the application process about twice as many people submitted applications for the amount of H1B Visas given out for the year.

Our education system provides many of these H1B Visa applicants with the tools needed for their job. However, if they are not randomly selected, then they are sent back to their home country, with the training we provided. Moreover, we sit in a country that is devoid of programming talent, causing the price of programming to increase, and/or causing the amount of time for programming to increase – both of which hinder the growth of start-ups.

  • Show Comments

  • allenfuller2

    Shame on you for parroting the propaganda of special interest groups that want to exploit immigrants for cheap labor! You did not even bother to think twice before passing along their talking points!

    Do you even hear yourself?!? “We sit in a country that is devoid of programming talent.” Is that really so? That is a slap in the face of every American programmer!

    “…causing the price of programming to increase…” If only that were the case! General programming wages have been stagnant for years. If there were such great unfulfilled demand, economics states the price must increase. Instead, they have been held artificially low by the abuse of the H1B visa program, as companies intentionally do their best NOT to hire American workers, so they can hire immigrants cheaper and treat them as indentured servants. Yes, there are “hot” niches in the tech industry where wages have spiked, but these do not represent the state of the industry as a whole.

    Here is how companies abuse this program and do their best to avoid hiring Americans, many of whom desperately need work in this economic environment: https://www.youtube.com/watch?v=TCbFEgFajGU

    • texrat

      very well said.

  • texrat

    I have to agree with allenfuller2. There is no American tech skills shortage. People my age with high skill levels and ability to adapt have been let go from tech roles in droves over the years. Young people with advanced ability are often left out due to lack of certification. I could go on and on, but bottom line: there are too many technically-skilled Americans either unemployed or underemployed to raise the H1B quotas. Let’s solve THAT first.

    • bradleyjoyce

      Perhaps it’s better said “talent willing to take a risk on a startup” … there is PLENTY of talent if you can afford to pay 6 figure salaries, full benefits, etc etc… most startups can’t.

      • texrat

        I’d still argue the point. Who is narrowing the discussion to candidates demanding 6 figure salaries and full benefits? I doubt it’s the 50-something programmer laid off and finding himself/herself falling into a minimum wage job with zero benefits. As someone who spent 9 months out of work because change managers became superfluous in the early 2000s, and discovered many more in the same boat, I can testify first-hand that the talent IS there… and in many cases more open to start-up working conditions than seems to be assumed.

        It behooves us all to set aside H1B political propaganda and fully assess this situation. Forget the six-figure straw man: let’s connect capable unemployed and underemployed Americans with more meaningful work.

        Maybe the solution is another start-up…

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