The H-1B Visa Program

A Primer on the Program and Its Impact on Jobs, Wages, and the Economy

April 2, 2020

Foreign workers fill a critical need in the U.S. labor market—particularly in the Science, Technology, Engineering, and Math (STEM) fields. Every year, U.S. employers seeking highly skilled foreign professionals submit their petitions for the pool of H-1B visa numbers for which U.S. Citizenship and Immigration Services (USCIS) controls the allocation.0F With a low statutory limit of visa numbers available, demand for H-1B visa numbers has outstripped the supply in recent years, and the cap has been reached quickly. Research shows that H-1B workers complement U.S. workers, fill employment gaps in many STEM occupations, and expand job opportunities for all.  

This fact sheet provides an overview of the H-1B visa category and petition process, addresses the myths perpetuated about the H-1B visa category, and highlights the key contributions H-1B workers make to the U.S. economy.

Overview of the H-1B Visa Category and the Petition Process

What is the H-1B Visa Category?

The H-1B is a temporary (nonimmigrant) visa category that allows employers to petition for highly educated foreign professionals to work in “specialty occupations” that require at least a bachelor’s degree or the equivalent.1F Jobs in fields such as mathematics, engineering, technology, and medical sciences often qualify. Typically, the initial duration of an H-1B visa classification is three years, which may be extended for a maximum of six years.2F

Before the employer can file a petition with USCIS, the employer must take steps to ensure that hiring the foreign worker will not harm U.S. workers.

  •  Employers first must attest, on a labor condition application (LCA) certified by the Department of Labor (DOL), that employment of the H-1B worker will not adversely affect the wages and working conditions of similarly employed U.S. workers.3F
  • Employers must also provide existing workers with notice of their intention to hire an H-1B worker.4F

Since the category was created in 1990, Congress has limited the number of H-1Bs made available each year. The current annual statutory cap is 65,000 visas, with 20,000 additional visas for foreign professionals who graduate with a master’s degree or doctorate from a U.S. institution of higher learning (Figure 1).5F In recent years, the limit has been reached only a few days after the petition submission period begins.

Figure 1: Annual Cap on H-1B Visas, 1991 to 2020

 

Source: U.S. Citizenship and Immigration Services.6F

Under the Trump administration, more H-1B petitions are initially being denied, but a growing number of these denials are later overturned. Denials of new H-1B petitions for initial employment rose from 6 percent in FY 2015 to 21 percent in FY 2019. The denial rate for petitions for continuing employment stood at 12 percent in FY 2019—up from just 3 percent in FY 2015.7F But the USCIS Administrative Appeals Office overruled Service Center denials nearly 14 percent of the time in FY 2018 and FY 2019, compared to only 3 percent of the time between FY 2014 and FY 2017.8FMoreover, a record number of H-1B petitioners have challenged denials in federal court, and a significant number have managed to get the denials reversed.9F

H-1B Registration Process

Beginning in 2020, USCIS changed to a registration process for visa numbers available in FY 2021 (beginning October 1, 2020).10F The purpose of this new process is to reduce the burden on U.S. employers and the agency from requiring employers to submit H-1B petitions and supporting documentation prior to knowing whether a visa number will be available. USCIS established the first registration period from 12 noon ET on March 1 through 12 noon ET on March 20, 2020.11F Each year, USCIS will announce the next registration period,12F during which a U.S. employer must register electronically for each foreign national for whom the employer intends to file an H-1B petition.13F The U.S. employer must pay a $10 fee for each registration submitted.14F The registration includes limited information about the U.S. employer and the foreign national, in contrast to the details USCIS requires when the U.S. employer submits an H-1B petition.15F While USCIS has not placed any limit on the number of registrations a U.S. employer may file, the employer must attest that it intends to file an H-1B petition on the foreign national’s behalf and cannot submit more than one registration per foreign national.16F

If USCIS receives more registrations than there are visa numbers available, USCIS will run a lottery.17F USCIS will select registrations for the 65,000 visa numbers first and then for the 20,000 master’s exemption visa numbers.18F USCIS will send notification electronically if it selects a registration.19F USCIS also will give the U.S. employer at least 90 days to file its H-1B petition.20F

On March 27, 2020, USCIS announced that it had received enough electronic registrations to reach the FY 2021 numerical limits.21F Roughly 275,000 registrations were submitted during the registration period.22F

Before USCIS required registration, if the cap was hit during the first five business days, the agency conducted a lottery to determine which employers’ petitions for H-1B workers would be processed.23F Over the past several years, USCIS has received a greater number of petitions than there are visa numbers available because the annual cap for H-1B visas does not meet the current demand for high-skilled workers. From FY 2008 to FY 2020, the annual H-1B cap was reached within the first five business days on eight occasions.24F

Understanding the Important Role that H-1B Workers Play in Our Economy

Foreign workers fill a critical need in the U.S. labor market—particularly in the Science, Technology, Engineering, and Math (STEM) fields. Many opponents of the H-1B visa seek to pit native-born workers against their foreign-born colleagues. In reality, workers do not necessarily compete against each other for a fixed number of jobs.

The United States has created a dynamic and powerful economy. Foreign-born workers of all types and skills, from every corner of the globe, have joined with native-born workers to build it. Skilled immigrants’ contributions to the U.S. economy help create new jobs and new opportunities for economic expansion. Indeed, H-1B workers positively impact our economy and the employment opportunities of native-born workers.

The skills that H-1B workers bring with them can be critical in responding to national emergencies. For instance, over the past decade (FY 2010-FY 2019), eight companies that are currently trying to develop a coronavirus vaccine—Gilead Sciences, Moderna Therapeutics, GlaxoSmithKline, Inovio, Johnson and Johnson Pharmaceuticals, Regeneron, Vir Therapeutics, and Sanofi—received approvals for 3,310 biochemists, biophysicists, chemists, and other scientists through the H-1B program.25F

How Do H-1B Visas Impact Wages?

Despite suggestions to the contrary, overwhelming evidence shows that H-1B workers do not drive down wages of native-born workers, with some studies showing a positive impact on wages overall.26F

  •  From the creation of the H-1B program in 1990 to 2010, H-1B-driven increases in STEM workers were associated with a significant increase in wages for college-educated, U.S.-born workers in 219 U.S. cities. A 1 percentage point increase in foreign STEM workers’ share of a city’s total employment was associated with increases in wages of 7 to 8 percentage points paid to both STEM and non-STEM college-educated natives, while non-college educated workers saw an increase of 3 to 4 percentage points.27F
  •  From 2009 to 2011, wage growth for U.S.-born workers with at least a bachelor’s degree was nominal, but wage growth for workers in occupations with large numbers of H-1B petitions was substantially higher.28F For example, in the Computer Systems Design and Related Services category, there has been a 5.5 percent wage growth since 1990 and a 7 percent wage growth since 2009. In comparison, wage growth across all industries has been 0.8 percent since 1990 and 1.6 percent since 2009.29F
  •  The median salary of H-1B workers (as measured in 2016 dollars) rose from $69,455 in FY 2007 to $80,000 in FY 2016. The median salary of all computer and mathematical workers (foreign-born and native-born) grew from $73,979 to $75,036 during the same period.30F
  •  Factors such as gender, marital status, and ethnicity play a larger role than citizenship or immigration status for wages in the tech and finance industries—industries that use a large number of H-1B visas. A worker’s geographic region also accounts for significant differences in wages.31F

How Do H-1B Workers Impact U.S. Employment Rates?

Research shows that H-1B workers complement U.S. workers, fill employment gaps in many STEM occupations, and expand job opportunities for all. The United States faces challenges in meeting the growing needs of an expanding knowledge-based innovation economy. Arguments that highly skilled, temporary foreign workers are freezing out native-born workers are rebutted by the best available empirical evidence.32F

  •  Unemployment rates are low for occupations that use large numbers of H-1B visas (Figure 2). For example, many STEM occupations have very low unemployment compared to the overall national unemployment rate.33F These low unemployment rates signal a demand for labor that exceeds the supply. 

Figure 2: Unemployment Rates in the United States, 2004 to 2019

 

Source: Bureau of Labor Statistics and Current Population Survey.34F

  • Research indicates that an increase in H-1B visas could create an estimated 1.3 million new jobs and add around $158 billion to gross domestic product in the United States by 2045.35F
  • Conversely, research shows that the United States has missed out on the opportunity to create new jobs by limiting the number of H-1B visas to 65,000 per year. For example, estimates show that, had the U.S. government not rejected 178,000 H-1B visa petitions in computer-related fields in the 2007 and 2008 visa lotteries, U.S. metropolitan areas could have created as many as 231,224 tech jobs for U.S.-born workers in the two years that followed.
  • One study found that U.S.-based multinational corporations responded to restrictions on H-1B visas (such as rising denial rates) by increasing employment at their existing foreign affiliates and by opening new foreign affiliates—particularly in India, China, and Canada.37F

Are the Economic Benefits of H-1B Visas Limited to Silicon Valley or the Tech Sector?

Simply put, no. H-1B visas bolster innovation in the U.S. economy across America’s heartland and far beyond the technology firms in Silicon Valley. Although much research explores H-1Bs from a national perspective, there is a “geography of demand” across the United States, meaning that demand for workers in particular geographic areas often outweighs the supply of qualified workers in those areas. Moreover, although the use of H-1B visas in the high-tech industry garners substantial public attention, high-skilled immigrants play other crucial roles in the U.S. economy.

  •  106 metropolitan areas across the United States had at least 250 requests for H-1B workers in 2010-2011.38F Demand for high-skilled workers is generally higher in metro areas where innovation industries flourish.39F
    • For example, H-1B demand is high in places like Columbus, IN; Durham-Chapel Hill, NC; Trenton-Ewing, NJ; Bloomington-Normal, IL; Ann Arbor, MI; Peoria, IL; Boulder, CO; and Fayetteville-Springdale-Rogers, AR.40F
    • Although the presence of research universities accounts for H-1B demand in some of these places, private industry accounts for the intensity of demand in other areas. HTC Global, Wal-Mart, Merrill Lynch, Educational Testing Service, Caterpillar Inc., Credit Suisse, JPMorgan Chase & Co., Bank of America, Wells Fargo Bank, and the Mayo Clinic have been top H-1B employers.41F
  • Nearly two-thirds of requests for H-1B workers are for STEM occupations. There is also high demand for workers in healthcare, business, finance, and life sciences industries.42F
  • From FY 2010 to FY 2016, the largest numbers of H-1B recipients were in the New York City metropolitan area (247,900 H-1B visa petition approvals, or 29 percent of all H-1B visa petition approvals in the country); followed by Dallas (74,000); Washington, DC (64,800); and Boston (38,300).43F
    • However, the highest concentration of H-1B workers was in College Station, Texas (32 H-1B approvals per 100 workers). San Jose, California—home of Silicon Valley—was a distant second (two approvals per 100 workers).44F

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