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Utah Business

Bogus applications have clogged the system and left many skilled workers in limbo.

The systemic abuse of the H-1B lottery

This story appears in the March issue of Utah Business. Subscribe here

The H-1B lottery, designed to attract skilled foreign workers to the United States, has faced growing concerns in recent years about potential misuse. Recent findings by the Biden administration revealed that some tech companies may have been regularly manipulating the system by sending in a flood of bogus applications. This far-from-isolated incident exacerbates delays for legitimate applicants, making it harder to secure positions.

“The abuse with the H-1B lottery has been, primarily, certain companies putting in names of hundreds of employees even though there were no jobs there. Sometimes the person whose name was submitted didn’t even know a company was submitting their name for the H-1B lottery,” says Phil Kuck, an immigration lawyer at Dentons Durham Jones Pinegar.

But why apply for visas if there are no jobs? This past year saw a historic number of registrations. According to the New York Times, most applications came from a handful of outsourcing companies, overshadowing smaller companies’ attempts to bring on foreign workers and pushing many American jobs offshore. 

Kuck gives two primary reasons why the lottery has become a target for gaming. One, there are very few other legitimate pathways for immigrants to work and stay in the United States. Two, the rampant abuses of the system by companies who benefit from it had, for many years, gone unchecked. The cat was out of the bag, and other companies were following suit, almost as if the corruption was becoming business as usual.

The problem stems from the relatively low barriers to entering potential employees into the lottery, including minimal application fees and the lack of oversight to verify that employers putting forth candidates had actual jobs available for them.

“Regardless of the legality of these practices, they were certainly skewing the results of the H-1B lottery in the favor of those companies and individuals that employed this scheme,” Kuck says. “A number of companies, particularly software companies, had a practice of submitting the names of hundreds of ‘prospective’ employees even though there were no—or very few—jobs available, without consequence.”

“If any immigrant or companies sponsoring immigrants run into this issue, they should be advised to seek the assistance of an immigration attorney to resolve it.”

The visa system has already faced criticism for inequity. Immigrants who come into the country on H-1B visas often find themselves stuck in positions that don’t honor their talents or offer career growth commensurate to their American-born counterparts. Their ability to switch companies is curtailed by the cumbersome visa process, as joining a new company means beginning the visa process all over again. Companies have been known to take advantage of this power imbalance, keeping employees beholden to them—with plateaued salaries and curtailed growth opportunities—while their American-born peers rise through the ranks or move more freely between companies and positions.

Immigration lawyers and other advocates have been pushing back against the system’s exploitation. In 2023, U.S. Citizenship and Immigration Services (USCIS) began reevaluating the process, proposing changes that may help remedy these abuses. These changes include increasing the application cost, implementing more oversight into the process and investigating companies that engage in H-1B fraud.

“Most importantly, perhaps, is that registrations must now be in the name of the foreign national, and USCIS will not recognize multiple registrations for the same person from multiple companies,” Kuck says. “This was bafflingly not the government’s prior policy or practice.” Since each person will only have one chance of getting selected in the lottery, it will result in a fairer, more balanced lottery overall.

However, there are some casualties to these new changes. Since USCIS is flagging individuals suspected of immigration fraud due to submitting multiple applications, individuals put forth without their knowledge may be exempt from the H-1B lottery altogether. 

“There is already some significant litigation on this front moving forward,” Kuck says. “If any immigrant or companies sponsoring immigrants run into this issue, they should be advised to seek the assistance of an immigration attorney to resolve it.”

For companies worried about the perception of fraud or adhering to the rules, Kuck recommends following the guidelines carefully. 

First and foremost, only apply to the lottery for those individuals who are a good fit for an available job opening. 

Don’t get tripped up by bureaucratic snafus. Triple-check to ensure you’ve supplied the correct information to the lottery application, as incorrect information can further delay the process.

Allow ample time for the H-1B lottery application once the individual you entered is selected to prevent losing out on a critical worker. Filing early after selection from the H-1B lottery is the best practice.