IT companies feel the heat of H1-B visa denial, as per USCIS


After President Trump’s new rules on H1-B visa, its tight scrutiny is being felt the hardest by the IT services companies. In fact, in the second quarter of FY20 more H-1B visas were denied to IT companies as compared to product firms.

The denial rates for H-1B visas for initial employment were at 29% for the first two quarters of the year as per analysis of USCIS data by the National Foundation for American Policy (NFAP).

The USCIS follows the October to September financial year and the latest numbers are for the quarter to March. In FY 19 and FY18, denial rates were at 21% and 24% respectively.

Data for continuing employment or renewals was not shared by the immigration agency. Visa denial rates have been consistently higher under the Trump administration, with denial rates under 13% till FY17.

All the top 25 employers of new H-1B professionals had higher denial rates for H-1B petitions for initial employment in FY 2020.

“The highest denial rates continue to be for companies that provide information technology or other business services to American companies. The data indicate USCIS has established a different standard for deciding cases for companies that provide information technology (IT) services. Immigration law does not have a different standard for adjudications based on the type of rm or the location work will be performed,” said Stuart Anderson, executive director, NFAP.

There were six Indian companies among the top 25 employers, and only one, Tata Consultancy Services, among the top ten. The denial rates for these companies, and others like Cognizant (52%), Deloitte (41%) and Accenture (31%) who bring in employees and place them at client locations was significantly higher than product and technology companies like Facebook (7%) and Microsoft (12%).

Visa denial rates have dropped to 4.1% in the third quarter of the fiscal as per initial data released.

“Because USCIS combines initial and continuing cases it is not possible to know the denial rate for H-1B petitions for initial employment in the third quarter. Continuing employment cases typically have lower denial rates and there are usually many more of them, which can skew the numbers,” said Anderson.

The total visa denial rates are expected to drop further in the fourth quarter of the year on account of a settlement between ITServe Alliance and the USCIS following which the agency withdrew two memos used to determine an employer-employee relationship and contract and itinerary requirements for petitions involving third party worksites.

“The memos and their interpretation have been blamed for much higher denial rates for H-1B petitions, particularly for IT services companies. If the rescission of the two memos has an impact on H-1B denials, it may begin to show in the data for the fourth quarter of FY 2020 and the first two quarters of FY 2021,” said Anderson.