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Why high-skilled workers are rethinking H-1B visas

Melody Hahm
Senior Writer

Seshank Vemuri came to the U.S. 10 years ago with ambitions of building his own company. After completing his undergraduate education in India, he received his masters in Information Systems from the University of Missouri and is now in the U.S. on an H-1B visa.

The H-1B is a non-immigrant visa that lasts three years, though individuals can apply for an extension of an additional three years, for a total of six years. The visa allows U.S. employers to temporarily hire foreign workers in specialty occupations. Holders cannot remain in the U.S. permanently and can only get additional extensions if their employer applies for their permanent residence (a green card). And those limitations are often keenly felt among an immigrant -- and entrepreneurial -- population; even landing a much-coveted H-1B doesn’t allow workers do what American-born workers can do.

Requests for H-1B visas have exceeded supply for the fourth consecutive year; the application process opened April 1 and they exceeded the cap of 85,000 in 5 days. Now there’s a lottery taking place for the 85,000 spots available; 65,000 go to employers who hire high-skilled foreign-born workers (with at least a bachelor’s degree) and the remaining 20,000 visas go to those with advanced degrees from U.S. institutions.

Naveen Bhora, a partner at immigration law firm Wolfsdorf Rosenthal LLP, says there’s only a 30% chance of being selected in the lottery process, and it’s a grueling waiting game for applicants.

Fwd.us, an organization led by leaders in the tech community (including Yahoo’s Marissa Mayer, Facebook’s Mark Zuckerberg and LinkedIn’s Reid Hoffman), is pushing for immigration reform, particularly as it relates to the need for high-skilled workers. President Todd Schulte says a major rehaul is vital for the immigration system. “It’s an indictment of Congress, not being able to do anything for two decades. This visa program existed before the worldwide web and it’s wildly prohibitive,” he says. Last year, Pennsylvania Sen. Orinn Hatch introduced the Immigration Innovation Act, which would raise the yearly cap on H-1B visas from 65,000 to 195,000 and remove limits on the number of high-skilled visas for those with advanced degrees. It was never voted on in the Senate.

The green card game
Now a consultant for Deloitte, Vemuri, 31, applied for a green card in 2012 and says he’s looking at 2019 as a realistic time to be granted permanent residence. In the meantime, he’s moonlighting as an entrepreneur, though he won’t be able to run the company that he’s building. He describes his startup, an app called Clot, a way for people to meet others to go to events together, as part Meetup and part EventBrite. But because there’s no legal way to run his company – you must be a citizen to own a business in the U.S. – he started it in someone else’s name (who is a U.S. citizen).

Currently, only 7% of the total number of green cards can go to applications from a single country. That means H-1B holders from countries with high demand like China, India and Mexico have to wait longer than other applicants before permanent residence becomes an option.

“The idea that you’re highly intelligent and skilled, coming to the U.S. after college from a country like India and you might not get a green card until the second half of the 21st century is bonkers,” Schulte says.

That’s why Vemuri is taking matters into his own hands: “My solution is to start the company and let someone else run it until it gets traction.” If the company found success, Vemuri says he would go back to India when his visa expired so he could run it from there.

Bhora, the immigration lawyer, agrees that the H-1B is far from ideal for entrepreneurs. “You can still have a sizable ownership of the company -- limited to 10% -- but I don’t see the H-1B as a path to starting your own company,” she says.

Startups that are looking to hire foreign-born workers may ultimately be at a disadvantage as well. Though the lottery process for H-1Bs is randomized, Bhora says once they’re selected, the United States Citizenship and Immigration Services (USCIS) scrutinizes and is a lot more critical of smaller companies. The USCIS checks to see that a company is properly established and has the cash flow necessary to provide employees the average wage. As many early-stage startups aren’t yet profitable, it’s far more difficult for small businesses to prove their financial stability. It also takes a lot more effort and money on the smaller company’s end. “H-1Bs are not cheap -- they take a lot of financial commitment from the employer,” she says. It costs employers about $5,000 per employee. Plus, immigration lawyer fees cost $2,000 to $3,000, on average.

Schulte echoes this concern: “A startup that’s applying for one or two H-1Bs should be treated differently. There needs to be a way that startups are getting these employees from all around the world, otherwise we’ll be at a disadvantage,” he says.

In fact, 74% of Silicon Valley-employed computer and mathematical workers between 25 and 44 are foreign-born, according to the 2016 Silicon Valley Index. This is part of a broader debate about whether big tech companies are actually outsourcing their jobs. (Take, for example, two former Disney employees who filed lawsuits when they were laid off from their IT jobs after training their H-1B visa replacements.)

The key to permanent residence ultimately lies in the hands of the employer, who might not always be eager to apply for employees’ green cards. “Once these highly skilled employees have green cards, they become free agents, so employers aren’t jumping to apply on their behalf,” says Michael Wildes, managing partner at immigration law firm Wildes & Weinberg. “This H-1B visa is more of a bandage, rather than a fix to this economy.”

Though Vemuri is a 10-year resident of the U.S., he still doesn’t consider himself American because he feels he hasn’t been included in the entrepreneurial fabric of the country. “One million people are on non-immigrant visas and can’t start companies. Anyone with an iota of intelligence would be able to see that the immediate, fastest, and easiest way of encouraging entrepreneurship would be to give these people who have graduated from public schools and top MBA programs a path to permanent residence. This is a question of ethics,” he says.

Though discussions around H-1Bs tend to go hand in hand with the tech sector, the kinds of industries that it impacts are far-reaching and include medicine, architecture and finance. Particularly problematic, Bhora notes, are physicians who go through their residency training on the H-1B and if they then complete three years of specialization, they’ve reached the six-year limit. “By the time you’re finished with your medical training here and you’re a highly qualified physician, you don’t have the basis to stay on when we’re facing a nationwide shortage of certain physicians,” says Bhora.

Ultimately, very little will get accomplished until a new president is in office, says Schulte.

“We are in dire need to protect our homeland and reinvigorate our economy; immigration, if handled properly, could do both,” says Wildes. “Unfortunately, people are tired of waiting and oftentimes moving on. We have to remember that today’s H-1Bs could become tomorrow’s employers.”

What are your thoughts on H-1B visas and the need for immigration reform? Tweet me at @melodyhahm or tell us in the comments below.

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