As the fiscal year 2025 approaches, both employers and prospective H-1B visa applicants are bracing for significant changes and rising costs associated with securing this highly coveted work permit. The H-1B program, which allows U.S.-based companies to employ skilled foreign workers, particularly in industries like tech, finance, and consulting, comes with a range of administrative complexities and high fees. These costs vary based on the nature of the petition and the employer’s status, adding additional layers of uncertainty for both parties.
With the anticipated arrival of a new U.S. administration, discussions about the future of the H-1B visa program are intensifying. Employers and foreign workers alike are watching closely for potential regulatory changes that could reshape the program. As highlighted by Kathleen Campbell Walker, a partner at the law firm Dickinson Wright, many employers are increasingly reluctant to navigate the burdensome process of securing an H-1B visa. “I only go into H-1B when I have no choice, because it’s costly, uncertain in terms of the lottery, and the most highly regulated option available to present to an employer,” Walker told Newsweek.
To circumvent these challenges, many U.S. employers are opting to hire remote workers instead of engaging with the H-1B process. According to a 2024 survey from Envoy Global, 83% of employers hired foreign employees to work remotely in roles originally intended to be based in the U.S. As a result, the demand for alternative visa pathways, such as L-1 or O-1 visas, is on the rise, as employers search for ways to sidestep the complications of the H-1B process.
Indian workers, particularly those on H-1B visas, are also exploring other options. Some have been advised by their attorneys and employers to remain in the U.S. rather than risk re-entry under new rules expected to be enacted under the incoming administration.
The H-1B visa program has an annual cap of 85,000 visas, but due to exceptions and other factors, the number of approvals often far exceeds this limit. In 2018-2019, for example, the program saw approximately 585,000 recipients, though the figure dropped during the pandemic before rising again to over 750,000 in 2023, according to the American Immigration Council. Despite the high demand, the visa allocation process remains a lottery system, contributing to the frustration of both employers and applicants.
The decline in H-1B approvals for Indian IT firms is especially notable. In fiscal year 2024, the top seven Indian IT firms received only 7,299 approvals for new hires, a stark decline from the 14,792 approvals in fiscal year 2015, according to the National Foundation for American Policy (NFAP). At the individual company level, tech giants like Amazon, Cognizant, Infosys, and Tata Consultancy Services have all seen significant decreases in H-1B approvals in recent years.
Key Changes Coming in 2025
On January 17, 2025, the Department of Homeland Security (DHS) will implement the H-1B Modernization Final Rule, aimed at streamlining the visa application process while enhancing oversight. The new rule is designed to improve efficiency, address workforce demands, and clarify the process for employers. Among the most significant changes, employers will be required to use an updated version of Form I-129 when filing petitions for H-1B workers. A preview of the revised form is already available on the U.S. Citizenship and Immigration Services (USCIS) website.
Despite these efforts to modernize the program, the H-1B visa system will continue to face challenges. The annual cap will remain in place, and the demand for these visas will consistently exceed the available supply. USCIS will begin accepting cap registrations in March 2025 for fiscal year 2026 applications, continuing its lottery-based selection system, which many employers find problematic due to its unpredictability.
In sum, as both the demand for skilled foreign labor and the costs associated with the H-1B visa program rise, companies and workers are preparing for another year of uncertainty and complexity. While some employers look to bypass the system by hiring remote workers or seeking alternative visa routes, the H-1B program remains a crucial tool for many U.S. companies in securing global talent.
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