Companies use H-1B visas to bring in personnel with hard-to-find skills, but research out this week shows US Citizenship and Immigration Services continues to make that more difficult. Contingent workforce managers will have to work with legal counsel to navigate the environment or, possibly, find sources of US workers.

USCIS denied 24% of H-1B petitions for initial employment through the third quarter of federal fiscal year 2019, up from 6% in fiscal year 2015, according to an analysis released Monday by the National Foundation for American Policy.

“Denial rates have been consistent throughout the year showing that this challenge is not going away, and many organizations will need to rethink their approach to find talent in an already challenging talent market,” said Chris Paden, director of contingent workforce strategies and research for the Americas at Staffing Industry Analysts.

That also means companies that rely on H-1B workers will have to ramp up their use of legal support services or invest in new ways to find domestics talent, Paden said.

Monday’s report is an update from an initial report in April released by the National Foundation for American Policy, a nonprofit, nonpartisan organization focused on public policy research.

H-1B petitions for initial employment are primarily for new employment and would count against the H-1B annual cap. The report noted the denial rate had never previously risen above 8%.

Foreign-born scientists and engineers have been targeted for new immigration restrictions, said Stuart Anderson, executive director of the foundation and counselor to the Commissioner of Immigration and Naturalization Services under President George W. Bush.

“The term ‘merit-based’ immigration is still only a slogan,” Anderson said in a statement. “It does not reflect any administration policies to make it easier for high-skilled foreign nationals to work in the United States.”

H-1B petitions for continuing employment are also being denied at a higher rate. These petitions are usually extensions for existing employees at the same company or an H-1B visa holder changing to a new employer, according to the report. USCIS denied 12% of continuing employment H-1B petitions through the first three quarters of fiscal year 2019. It had only been 3% in fiscal year 2015.

Backup Plans

What can contingent workforce client companies do in the wake of the tougher USCIS stance?

One step is to look at use of H-1B workers and find out if any mission-critical work could be impacted by the visa denials, then have a backup plan in place, said Dawn McCartney, VP, contingent workforce strategies council, at SIA.

Another step: Work with legal counsel to prepare a standard operating procedure for site visits and inquiries that may happen with Fraud Detection and National Security officers from the USCIS.

“There was a substantial increase in the amount of visits and inquiries this past year and a half than any previous years that we are aware of,” McCartney said.

Also, contingent workforce managers should educate their stakeholders. Often, a manager is presented with documents or requests for which they may not know the impact, and there should be a process in place for stakeholders to handle requests or inquiries from staffing suppliers or H-1B workers themselves.

The most important suggestion, McCartney said, is for contingent workforce managers to work with legal counsel to determine the best processes and procedures for their organizations.

Some Hit Harder Than Others

Some companies have been hit by the denials harder than others, according to Monday’s report by the National Foundation for American Policy. Amazon’s H-1B denial rate for initial employment was 1% in fiscal year 2015 but rose to 6% in fiscal year 2019. In comparison, Accenture’s H-1B denial rate for initial employment was 4% in fiscal year 2015 but rose to 52% in fiscal year 2019.

The report also noted the denial rate for H-1B visas for initial employment of 24% through the third quarter is actually less than the 33% through the second quarter of fiscal year 2019. However, it notes that likely resulted because the lottery for H-1B visas under the annual caps takes place during the third quarter and any “requests for evidence” issued during that time would likely not be responded to soon enough to appear in the third-quarter results. It expects fourth-quarter denials to rise.

“‘Cream of the crop’ cases would have been approved during that time period, but cases where the government issued a ‘request for  evidence’  would  likely  not  show  up  in  that  data  set  because  they  would  not  be  decided  until  much  later,” the report quotes Lynden Melmed, a partner at Berry Appleman & Leiden and former chief counsel for USCIS.