Government says demand for skilled-worker visas dips

After strong demand in recent years, applications for H-1B visas for skilled foreign workers are down this year. In the past two years, the cap of available visas was hit within a few days after the government began accepting applications on April 1 for the 65,000 H-1B visas available for each fiscal year. As of Friday afternoon, 42,000 applications had been filed for H-1B visas.

At the same time, nearly all of the 20,000 supplemental H-1B visas available for foreigners who have earned master's or doctoral degrees from U.S. schools had been applied for, according to a spokeswoman for the Homeland Security Department's U.S. Citizenship and Immigration Services.

Industry officials and others say the decline in H-1B applications is likely the result of the ailing economy. In fact, Microsoft General Counsel Brad Smith indicated as much in an April 1 blog post, saying the company will submit "substantially fewer H-1B applications" than in past years and that most of the firm's hires in the next year will be Americans. But, he added, "to succeed and continue adding jobs in the highly competitive global technology business, Microsoft and other U.S. companies must be able to hire top talent wherever it is located."

As part of the economic stimulus package passed in February, Congress imposed restrictions that bar firms receiving Troubled Asset Relief Program money from using H-1B visas to displace U.S. workers. While most observers say they do not believe the provision has had a big impact on the decline in H-1B applications, some firms have backed off of seeking new H-1B visas. For example, Bank of America, a TARP recipient, announced this year that it was rescinding job offers to some foreign students attending U.S. graduate schools who required H-1B visas.

Regardless of when the fiscal 2010 cap is hit, critics and supporters of H-1B visas say the system needs to be overhauled and lawmakers are gearing up to reintroduce legislation. Senate Finance ranking member Charles Grassley, who sponsored the H-1B restrictions in the stimulus package, and Senate Majority Whip Richard Durbin offered legislation in the last Congress that would have required companies to work harder at finding U.S. workers before seeking an H-1B or L-1 visa for a foreign worker, required greater oversight of companies that use such visas and prohibited companies from obtaining H-1B visas if more than 50 percent of their workers are H-1B holders. That provision was aimed at cracking down on companies that hire foreigners on H-1B visas, train them in the United States and then outsource them and the work abroad. Grassley and Durbin are expected to reintroduce a similar bill after the Senate returns from its spring break next week, a Grassley spokeswoman said.