H-1B Foreign Workers
Better Tracking Needed to Help Determine H-1B Program's Effects on U.S. Workforce Gao ID: GAO-03-883 September 10, 2003The continuing use of H-1B visas, which allow employers to fill specialty occupations with highly skilled foreign workers, has been a contentious issue between U.S. workers and employers during the recent economic downturn. The H- 1B program is of particular concern to these groups because employment has substantially decreased within information technology occupations, for which employers often requested H-1B workers. In light of these concerns, GAO sought to determine (1) what major occupational categories H- 1B beneficiaries were approved to fill and what is known about H-1B petition approvals and U.S. citizen employment from 2000-2002; (2) what factors affect employers' decisions about the employment of H-1B workers and U.S. workers; and (3) what is known about H-1B workers' entries, departures, and changes in visa status.
H-1B beneficiaries were approved to fill a variety of positions in 2002, and the number of approved petitions (i.e., employer requests to hire H-1B beneficiaries) in certain occupations has generally declined along with the economic downturn, as have U.S. citizen employment levels in these occupations. In contrast with 2000, most H-1B beneficiaries in 2002 were approved to fill positions in fields not directly related to information technology, such as economics, accounting, and biology. Both the number of H-1B petition approvals and U.S. citizens employed in certain occupations, such as systems analysts and electrical engineers, decreased from 2001 to 2002. GAO contacted 145 H-1B employers, and the majority of the 36 employers that agreed to speak with GAO said that they recruited, hired, and retained workers based on the skills needed, rather than the applicant's citizenship or visa status. Despite increases in unemployment, most employers said that finding workers with the skills needed in certain science-related occupations remains difficult. Although some employers acknowledged that H-1B workers might work for lower wages than their U.S. counterparts, the extent to which wage is a factor in employment decisions is unknown. The Department of Homeland Security (DHS) has incomplete information on H-1B worker entries, departures, and changes in visa status. As a result, DHS is not able to provide key information needed to oversee the H-1B program and its effects on the U.S. workforce, including data on the number of H-1B workers in the United States at any time. GAO also found that DHS's ability to provide information on H-1B workers is limited because it has not issued consistent guidance or any regulations on the legal status of unemployed H- 1B workers seeking new jobs. Allowing unemployed H-1B workers to remain in the United States may have implications for the labor force competition faced by U.S. workers. While DHS has long-term plans for providing better information on H-1B workers, policymakers in the interim need data to inform discussions on program changes.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-03-883, H-1B Foreign Workers: Better Tracking Needed to Help Determine H-1B Program's Effects on U.S. Workforce
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Report to the Ranking Minority Member, Subcommittee on Environment,
Technology, and Standards, Committee on Science, House of
Representatives:
United States General Accounting Office:
GAO:
September 2003:
H-1B Foreign Workers:
Better Tracking Needed to Help Determine H-1B Program's Effects on U.S.
Workforce:
H-1B Foreign Workers:
GAO-03-883:
GAO Highlights:
Highlights of GAO-03-883, a report to the Ranking Minority Member,
Subcommittee on Environment, Technology, and Standards, Committee on
Science, House of Representatives
Why GAO Did This Study:
The continuing use of H-1B visas, which allow employers to fill
specialty occupations with highly skilled foreign workers, has been a
contentious issue between U.S. workers and employers during the recent
economic downturn. The H-1B program is of particular concern to these
groups because employment has substantially decreased within
information technology occupations, for which employers often
requested H-1B workers. In light of these concerns, GAO sought to
determine (1) what major occupational categories H-1B beneficiaries
were approved to fill and what is known about H-1B petition approvals
and U.S. citizen employment from 2000-2002; (2) what factors affect
employers‘ decisions about the employment of H-1B workers and U.S.
workers; and (3) what is known about H-1B workers‘ entries,
departures, and changes in visa status.
What GAO Found:
H-1B beneficiaries were approved to fill a variety of positions in
2002, and the number of approved petitions (i.e., employer requests to
hire H-1B beneficiaries) in certain occupations has generally declined
along with the economic downturn, as have U.S. citizen employment
levels in these occupations. In contrast with 2000, most H-1B
beneficiaries in 2002 were approved to fill positions in fields not
directly related to information technology, such as economics,
accounting, and biology. Both the number of H-1B petition approvals
and U.S. citizens employed in certain occupations, such as systems
analysts and electrical engineers, decreased from 2001 to 2002.
GAO contacted 145 H-1B employers, and the majority of the 36 employers
that agreed to speak with GAO said that they recruited, hired, and
retained workers based on the skills needed, rather than the
applicant‘s citizenship or visa status. Despite increases in
unemployment, most employers said that finding workers with the skills
needed in certain science-related occupations remains difficult.
Although some employers acknowledged that H-1B workers might work for
lower wages than their U.S. counterparts, the extent to which wage is
a factor in employment decisions is unknown.
The Department of Homeland Security (DHS) has incomplete information
on H-1B worker entries, departures, and changes in visa status. As a
result, DHS is not able to provide key information needed to oversee
the H-1B program and its effects on the U.S. workforce, including data
on the number of H-1B workers in the United States at any time. GAO
also found that DHS‘s ability to provide information on H-1B workers
is limited because it has not issued consistent guidance or any
regulations on the legal status of unemployed H-1B workers seeking new
jobs. Allowing unemployed H-1B workers to remain in the United States
may have implications for the labor force competition faced by U.S.
workers. While DHS has long-term plans for providing better
information on H-1B workers, policymakers in the interim need data to
inform discussions on program changes.
What GAO Recommends:
GAO recommends that the Secretary of Homeland Security
(1) take actions to ensure that change of visa status data are entered
into DHS‘s computer system and are integrated with entry and departure
data and
(2) issue regulations that address the extent to which unemployed
H-1B workers are allowed to remain in the United States. DHS agreed
with GAO‘s recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-03-883.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Sigurd Nilsen at
(202) 512-7215 or nilsens@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
H-1B Beneficiaries Were Approved to Fill a Broad Range of Occupations,
and as U.S. Citizen Employment Generally Declined with the Recent
Economic Downturn, So Did the Number of H-1B Petition Approvals:
The Majority of Employers Interviewed Reported That Skills, Rather Than
Immigration Status, Determine Employment Decisions, but the Extent to
Which Wage Plays a Role Is Unknown:
Little Is Known about the Status of H-1B Workers, but New Systems Are
Being Developed to Improve Tracking Information:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
CLAIMS 3 Data on H-1B Petition Approvals:
Current Population Survey Estimates:
Salary Comparisons:
Employers Selected for Interviews:
DHS Current and Planned Tracking Systems:
Appendix II: Age Distribution and Salaries of H-1B Beneficiaries and
U.S. Citizen Workers:
Appendix III: Comments from the Department of Homeland Security:
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Top 10 Occupations H-1B Beneficiaries Were Approved to Fill,
2000, 2002:
Table 2: Change in H-1B Petition Approvals and U.S. Citizen Employment
for Selected Occupations, 2000-2001, 2001-2002:
Table 3: Department of Labor H-1B Investigations, Violations
Identified, and Back Wages Due:
Table 4: Summary of Reportable Analyses:
Table 5: Crosswalk from BCIS to CPS Codes:
Table 6: Percentage Distribution of the Age of H-1B Beneficiaries
Approved in 2002 and U.S. Citizen Workers in 2002:
Table 7: Median Annual Salaries of H-1B Beneficiaries Approved in 2001
and U.S. Citizen Workers in 2001 in Selected Occupations, by Age and
Education:
Figures:
Figure 1: H-1B Petitions Approved and Counted Toward the Annual Limit,
Fiscal Years 1997 through 2002:
Figure 2: Median Age of H-1B Beneficiaries Approved in 2002 and U.S.
Citizen Workers in 2002 in Selected Occupations:
Figure 3: Percentages of H-1B Beneficiaries Approved in 2002 and U.S.
Citizen Workers in 2002 with Graduate Degrees by Selected Occupations:
Figure 4: Median Annual Salaries of H-1B Beneficiaries Approved in 2001
and U.S. Citizen Workers in 2001 in Selected Occupations, by Age and
Education:
Figure 5: Countries of Birth for H-1B Petition Approvals, 2002:
Figure 6: Total Initial and Continuing H-1B Petitions Approved
Annually, Calendar Years 2000 through 2002:
Figure 7: L-1 Visa Issuances, Fiscal Years 1998 through 2002:
Abbreviations:
AC21: American Competitiveness in the Twenty-First Century Act of 2000:
BCIS: Bureau of Citizenship and Immigration Services:
BLS: Bureau of Labor
Statistics:
CLAIMS 3: Computer Linked Application Information Management System 3:
CLAIMS 3 LAN: Computer Linked Application Information Management
System 3 Local Area Network:
CPS: Current Population Survey:
DHS: Department of Homeland Security:
DMIA: Immigration and Naturalization Service Data Management
Improvement Act:
IIRIRA: Illegal Immigration Reform and Immigrant Responsibility Act:
INS: Immigration and Naturalization Service:
IT: information technology:
LCA: Labor Condition Application:
OES: Occupational Employment Statistics:
NIIS: Non-Immigrant Information System:
USA PATRIOT ACT: The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism:
US-VISIT: U.S. Visitor and Immigrant Status Indicator Technology
System:
WHD: Wage and Hour Division:
United States General Accounting Office:
Washington, DC 20548:
September 10, 2003:
The Honorable Mark Udall
Ranking Minority Member
Subcommittee on Environment, Technology, and Standards
Committee on Science
House of Representatives:
Dear Mr. Udall:
The continuing use of H-1B visas, which allow employers to fill
specialty occupations[Footnote 1] with foreign workers, has been a
contentious issue between U.S. workers and employers during the recent
economic downturn. From March 2001 to March 2003, unemployment among
highly educated individuals increased by about 400,000, resulting in
1.2 million of these individuals being unemployed. In particular,
employment substantially decreased within information technology (IT)
occupations, for which employers often requested H-1B workers. Critics
of the H-1B program argue that enough U.S. workers are available to
fill these highly skilled positions and that the use of foreign labor
results in U.S. worker displacement. Proponents of the program argue
that it has contributed to our nation's productivity in the booming
economy of the 1990s and that the need for highly skilled foreign
workers continues to exist for certain highly specialized occupations.
The H-1B program was established in 1990 to assist U.S. employers in
temporarily (for up to 6 years) filling specialty occupations with
highly skilled workers. In order to ensure that American workers are
not adversely affected, employers are required to meet certain labor
conditions, including paying H-1B workers wages comparable to those of
U.S. workers in similar positions and locations. The Department of
Labor's Wage and Hour Division (WHD) is responsible for ensuring that
H-1B workers are actually working in the occupation listed in the
employer's application and receiving the required wages.
Legislation creating the H-1B program limited the number of H-1B
workers allowed to enter the country annually to 65,000. In response to
employers' needs during times of greater economic growth, the limit was
increased to 115,000 for fiscal years 1999 and 2000 and to 195,000 for
fiscal years 2001 through 2003. This cap will revert to 65,000 in
October 2003, unless legislation is enacted to raise the cap.
Because of your interest in the employment status of H-1B workers and
their U.S. counterparts since the economic downturn, we sought to
determine (1) what major occupational categories H-1B
beneficiaries[Footnote 2] were approved to fill and what is known about
H-1B petition approvals and U.S. citizen employment from 2000-2002; (2)
what factors affect employers' decisions about the employment of H-1B
workers and U.S. workers; and (3) what is known about H-1B workers'
entries, departures, and changes in visa status.
To answer the first question, we examined the Department of Homeland
Security's (DHS) Bureau of Citizenship and Immigration Services'
(BCIS)--formerly the Immigration and Naturalization Service
(INS)[Footnote 3]--2000-2002 H-1B petition approval data (i.e., data on
approved employer requests to hire H-1B beneficiaries) for five key
occupations: systems analysis and programming; electrical/electronic
engineering; economics; accountants, auditors, and related
occupations; and biological sciences. In addition, we analyzed 2000-
2002 Current Population Survey (CPS) data on U.S. citizen employment in
similar occupations. To obtain information about factors affecting
employers' decisions, we conducted site visits and telephone interviews
with 36 H-1B employers in 6 of the 12 states with the largest number of
H-1B petitions filed by employers--California, Maryland, New Jersey,
New York, Texas, and Virginia--selected for their geographic
dispersion. Employers were selected to obtain a range in both the
number of employer H-1B petition approvals and the occupations (IT-
related[Footnote 4] and non-IT-related) for which they requested H-1B
workers. Seventy-five percent of the 145 employers we contacted chose
not to discuss H-1B issues with us; consequently, our results may be
affected by this self-selection. Most employers that agreed to speak
with us used the H-1B program to fill engineering positions. We also
interviewed associations representing U.S. and H-1B workers and
associations representing employers. To report information available on
H-1B workers' entries, departures, and changes in visa status, we
examined DHS data and reports on planned tracking systems, and we
interviewed DHS officials about their data systems and tracking
procedures. We conducted our work between August 2002 and July 2003, in
accordance with generally accepted government auditing standards. For
more details on our scope and methodology, see appendix I.
Results in Brief:
H-1B beneficiaries were approved to fill a wide variety of positions,
and the number of H-1B petition approvals in certain occupations has
generally declined along with the economic downturn, as have employment
levels of U.S. citizen workers in these occupations. In contrast with
2000, most H-1B beneficiaries in 2002 were approved to fill positions
in fields not directly related to IT, such as economics, accounting,
and biology. In 2002, 40 percent of all H-1B beneficiaries were
approved to fill IT-related occupations, such as systems analysis and
electrical engineering, compared with 65 percent in 2000. We found that
in most of the five occupations we examined (electrical/electronic
engineers, systems analysts/programmers, biological/life scientists,
economists, and accountants/auditors), H-1B beneficiaries with
petitions approved in 2002 were younger and a higher percentage had an
advanced degree than the population of U.S. citizen workers in 2002. In
the three occupational groups (electrical/electronic engineers,
systems analysts/programmers, and accountants/auditors) for which
there were sufficient data to compare earnings, salaries listed on
petitions for younger H-1B beneficiaries (18-30 years old) approved in
2001 who did not have advanced degrees were higher than salaries
reported by U.S. citizen workers of the same age group and education
level. However, salaries listed on petitions for older H-1B
beneficiaries (31-50 years old) were either similar or lower than the
salaries reported by their U.S. counterparts. Both the number of H-1B
petition approvals and U.S. citizens employed in four of the five
occupations we examined decreased from 2001 to 2002. However, it is
unclear whether this decrease in U.S. workers employed was paralleled
by a decrease in H-1B beneficiaries employed in these occupations,
because BCIS is unable to determine the actual number of H-1B
beneficiaries who are employed in the United States.
The majority of the 36 employers that agreed to be interviewed said
they recruited, hired, and retained workers based on the skills needed,
rather than the applicant's citizenship or visa status. Among employers
who said visa status was a factor in their decisions, several noted
that they hired H-1B workers only when qualified U.S. workers were not
available. Half of the 36 employers we interviewed reported that they
did not go abroad to recruit workers for U.S. positions, but instead
found U.S. citizen and H-1B workers through employee referrals, the
Internet, and U.S. graduate schools. About two-thirds of employers said
that most H-1B workers hired were already in the United States on
foreign student visas or working for another employer on an H-1B visa
when they were recruited. In discussing their recruiting efforts, many
employers said that intense competition for IT-related workers in 1999
made it difficult to find qualified workers in the United States, but
that the supply of workers has since increased while the demand for
workers has decreased. However, most employers said that finding
qualified workers in some engineering and other science-related
professions remains difficult. Employers that laid off workers after
the economic downturn told us that they made these decisions based on
changes in business needs, regardless of employee citizenship or visa
status. The majority of employers interviewed cited cost and lengthy
petition processing times as major disadvantages to hiring H-1B
workers; however, they said they would continue to use the H-1B program
to find candidates with the skills needed. Some employers said that
they hired H-1B workers in part because these workers would often
accept lower salaries than similarly qualified U.S. workers; however,
these employers said they never paid H-1B workers less than the
required wage. Labor is responsible for, among other things, ensuring
that employers do not violate H-1B wage agreements, and continues to
find instances of employers not paying H-1B workers the wages required
by law; however, the extent to which such violations occur is unknown
and may be due in part to Labor's limited investigative authority.
Little information is available regarding H-1B workers' entries,
departures, and changes in visa status due to the limitations of
current DHS tracking systems, but new systems are being developed to
provide better information. One reason DHS is unable to determine the
number of H-1B workers who are in the United States at a given time is
because it maintains two separate tracking systems that do not share
data. The Non-Immigrant Information System (NIIS) has data on entries
and departures and the Computer Linked Application Information
Management System 3 (CLAIMS 3) has data on changes in visa status. Data
from both of these systems are needed to calculate the number of H-1B
workers in the United States. In addition, while DHS collects
information on change of visa status and jobs held, this information is
not consistently entered into CLAIMS 3. Because these data are not
consistently entered, it is not possible to determine the extent to
which H-1B workers become permanent residents or remain in the United
States on other employment-related visas to work in the same
occupations. DHS has recognized the need for more comprehensive and
reliable immigration data and is working to develop improved tracking
systems. One system, the U.S. Visitor and Immigrant Status Indicator
Technology System (US-VISIT), is intended to incorporate data managed
by DHS as well as other agencies, such as the Department of State, in
order to provide a foreign national's complete immigration history. DHS
plans call for these histories to include details about entries, change
of status, and departures that can be aggregated for reporting
purposes. US-VISIT will be managed by DHS and is mandated to be fully
implemented by December 2005. In addition to information systems
issues, we also determined that DHS's ability to provide information on
H-1B workers is limited because it has not issued consistent guidance
or any regulations on the legal status of unemployed H-1B workers who
remain in the United States while seeking new jobs. While BCIS has the
authority to issue regulations and has been working to establish them,
more than 2 years have passed since the agency began this work. With
inconsistent guidance and without regulations, unemployed H-1B workers
and their potential employers may be unsure about whether these workers
can be hired for new positions without first having to leave the
country. In addition, allowing unemployed H-1B workers to remain in the
United States to seek new positions may have implications for public
services, such as Unemployment Insurance, and the labor force
competition faced by U.S. workers.
To provide better information on H-1B workers and their status changes,
we recommend that DHS consistently enter change of status data in its
computer systems and integrate these data with that for entry and
departure. Furthermore, we recommend that BCIS issue regulations that
address the extent to which unemployed H-1B workers are allowed to
remain in the country while seeking other employment. In its written
comments on a draft of this report, DHS agreed with our
recommendations.
Background:
The H-1 nonimmigrant category was created under the Immigration and
Nationality Act of 1952 to assist U.S. employers needing workers
temporarily. The Immigration Act of 1990 amended the law, by, among
other things, creating the H-1B category for nonimmigrants[Footnote 5]
who employers sought to work in specialty occupations and fashion
modeling.[Footnote 6] Unlike most temporary worker visa categories, H-
1B workers can intend to both work temporarily and to immigrate
permanently at some future time. Employed H-1B workers may stay in the
United States on an H-1B visa for up to 6 years.
Until 1990, there was no limit on the number of specialty occupation
visas that could be granted to foreign nationals. Through the
Immigration Act of 1990, Congress set a yearly cap of 65,000 on H-1B
visas. In an effort to help employers access skilled foreign workers
and compete internationally, the Congress passed the American
Competitiveness and Workforce Improvement Act of 1998, which increased
the limit to 115,000 for fiscal years 1999 and 2000. In 2000, Congress
passed the American Competitiveness in the Twenty-First Century Act,
which raised the limit to 195,000 for fiscal year 2001 and maintained
that level through fiscal years 2002 and 2003. The limit is scheduled
to revert back to 65,000 in fiscal year 2004.
In order to hire H-1B employees, employers must first file a Labor
Condition Application (LCA) with Labor, attesting to the fact that the
employer intends to comply with a number of required labor conditions
designed to protect workers. On this application, an employer must
state the number of workers requested, the occupation and location(s)
in which they will work, and the wages they will receive. The employers
must attest, among other things, that:
* the employment of H-1B workers will not adversely affect the working
conditions of other workers similarly employed in the area;
* the H-1B workers will be paid wages that are no less than the higher
of the actual wage level paid by the employer to all others with
similar experience and qualifications for the specific employment or
the prevailing wage level for the occupational classification in the
area of intended employment; and:
* no strike, lockout, or work stoppage in the applicable occupational
classification was underway at the time the application was prepared.
H-1B dependent employers (generally those with a workforce consisting
of at least 15 percent H-1B workers) and willful violators (employers
who have been found in violation of the conditions of an earlier LCA)
are subject to additional requirements. These employers must also
attest that:
* before filing an LCA, the employer will make a good faith effort to
recruit U.S. workers for the position, offering wages at least as great
as that required to be offered to the foreign national;
* the employer will not displace and did not displace any similarly
employed U.S. workers within 90 days prior to or after the date of
filing any H-1B visa petition; and:
* before placing the H-1B employee with another employer, the current
employer will inquire whether or not the other employer has displaced
or intends to displace a similarly employed U.S. worker within 90 days
before or after the new placement of the H-1B worker.
After Labor approves the LCA,[Footnote 7] an employer who wishes to
hire an H-1B worker can file two types of petitions with BCIS to obtain
approval.[Footnote 8] "Initial" petitions are those that are filed for
a foreign national's first-time employment in the United States and
allow for the H-1B worker to stay in the United States for 3 years.
With some exceptions, these petitions are counted against the annual
cap on the number of H-1B petitions that may be approved.[Footnote 9]
"Continuing" employment petitions are filed for: extensions of the
initial petitions for another 3 years, the maximum period permissible
under the law; sequential employment, which occurs, for example, when
an H-1B worker changes employers within their 6-year time period; and
concurrent employment, in which the H-1B worker intends to work
simultaneously for a second or subsequent employer. Continuing
petitions do not count against the cap.
In both fiscal years 2001 and 2002, the number of initial H-1B
petitions approved that applied to the cap did not reach the annual
limit of 195,000 (see fig. 1). In fiscal year 2001, 163,600 petitions
were approved against the cap. The number of approved petitions
decreased by more than 50 percent in one year, with 79,100 petitions
approved against the cap in fiscal year 2002. This recent change
contrasts with the trends from fiscal years 1997 through 2000, during
which time the cap was lower and the number of petitions reached or
exceeded the annual limit.[Footnote 10]
Figure 1: H-1B Petitions Approved and Counted Toward the Annual Limit,
Fiscal Years 1997 through 2002:
[See PDF for image]
[End of figure]
DHS is responsible for managing the entry and departure of
nonimmigrants, including H-1B workers. To enhance DHS's ability in this
regard, legislation was enacted that required the agency to develop an
automated entry/exit control system. Section 110 of the Illegal
Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996
required that this system collect departure records from every foreign
national leaving the United States and match it with arrival records.
The act also required that the system have the capability to assist DHS
officials in identifying nonimmigrants who have been in the United
States beyond their authorized period of stay. The Immigration and
Naturalization Service Data Management Improvement Act of 2000 (DMIA)
replaced section 110 of IIRIRA in its entirety. The DMIA, among other
things, required that the entry/exit system integrate arrival and
departure information on foreign nationals required under IIRIRA and
contained in the Department of Justice (now DHS) and Department of
State databases. DMIA also required that this system be fully
implemented by December 31, 2005. Subsequent legislation required that
the entry/exit control system must be capable of interfacing with other
law enforcement agencies' systems.[Footnote 11]
In 2001, Congress passed legislation that allowed H-1B workers "visa
portability" - the ability to change employers during their stay once
the new employer files an H-1B petition on their behalf. According to
the law, the petition for new employment must have been filed before
the end of the worker's period of authorized stay. DHS has the
authority to issue regulations that further specify how visa
portability will be administered.
In March 2001, when the economy began to decline, U.S. employment
declined as well, with 1.4 million jobs lost during the year. The
unemployment rate rose to 5.8 percent at the end of 2001 and hovered
between 5.5 and 6 percent throughout 2002. Although downturns tend to
affect sectors throughout the economy, existing research indicates that
job loss from 2001-2002 was particularly severe in IT manufacturing, a
sub-sector in which many H-1B workers were employed.
Concerns that the H-1B program might have unfairly impacted U.S.
workers during the recent economic downturn have prompted labor groups
to raise questions about the use of the H-1B program. Associations
representing U.S. workers that we spoke with believe that employers
abuse the program by laying off U.S. workers while retaining and hiring
H-1B workers at lower wages. Such practices, according to employee
associations, had the effect of displacing U.S. workers during the
economic downturn. Labor representatives argue that some employers
force H-1B workers to work for lower wages than U.S. citizen workers,
knowing that continued employment is the only legal way for H-1B
workers to remain in the United States. One advocate for H-1B workers
said that some employers dangle the possibility of sponsorship for
permanent residency in front of H-1B workers as a reward for extra
work. These representatives believe that visa portability options do
not actually give H-1B workers more freedom to move around in the labor
market, arguing that H-1B workers are still dependent on their
employers to legally remain in the United States. On the other hand,
associations representing employers argue that H-1B workers were not
treated differently than U.S. workers during the economic downturn, and
that use of the H-1B program by employers has decreased substantially.
They also argue that the real challenge to U.S. workers occurs when
companies rely on workers overseas where the work can be done at a
lower cost.
H-1B Beneficiaries Were Approved to Fill a Broad Range of Occupations,
and as U.S. Citizen Employment Generally Declined with the Recent
Economic Downturn, So Did the Number of H-1B Petition Approvals:
H-1B beneficiaries were approved to fill a wide variety of occupations,
and the number of H-1B petition approvals in certain occupations has
generally declined with the economic downturn, along with the
employment levels of U.S. citizen workers in these occupations. In
contrast with patterns in 2000, most H-1B beneficiaries in 2002 were
approved for positions that were not related to IT. Moreover, a
comparison of H-1B beneficiaries and U.S. citizen workers in five
occupations (electrical/electronic engineers, systems analysts/
programmers, biological/life scientists, economists, and accountants/
auditors) revealed that, in most of these occupations, H-1B
beneficiaries in 2002 were younger and a higher percentage had a
graduate or professional degree.[Footnote 12] In the three occupational
groups for which there were sufficient data to compare salaries
(electrical/electronic engineers, systems analysts/programmers, and
accountants/auditors), salaries listed on petitions for younger H-1B
beneficiaries (18-30 years old) approved in 2001 who did not have
advanced degrees were higher than salaries reported by U.S. citizen
workers of the same age group and education level; however, salaries
listed on petitions for older H-1B beneficiaries (31-50 years old) were
either similar or lower than the salaries reported by their U.S.
counterparts. Both the number of H-1B petition approvals and U.S.
citizens employed in certain occupations decreased from 2001 to
2002.[Footnote 13]
H-1B Beneficiaries Were Approved to Fill a Wide Array of Highly Skilled
Positions in 2002:
In 2002, H-1B beneficiaries were approved to fill over 100 occupations,
but IT occupations were no longer the majority of approved occupations,
as they were in 2000 (see table 1). A large proportion of approved
petitions were for fields unrelated to IT, such as university
education, economics, and medicine. However, IT-related occupations
still constituted 40 percent of all petitions approved in 2002 for H-1B
beneficiaries, most prominently, in systems analysis and programming
(31 percent). Nine percent were in electrical/electronic engineering
and other IT-related fields. In 2000, the pattern was different: 65
percent of all approved petitions were for IT-related positions.
Table 1: Top 10 Occupations H-1B Beneficiaries Were Approved to Fill,
2000, 2002:
2000: Occupation: Systems analysis and programming[A]; 2000: Percent of
total: 54; 2002: Occupation: Systems analysis and
programming[A]; 2002: Percent of total: 31.
2000: Occupation: Electrical/electronic engineering[A]; 2000: Percent
of total: 5; 2002: Occupation: College and university
education; 2002: Percent of total: 8.
2000: Occupation: Computer-related, other[A]; 2000: Percent of total:
4; 2002: Occupation: Accountants, auditors, and related
occupations; 2002: Percent of total: 5.
2000: Occupation: College and university education; 2000: Percent of
total: 3; 2002: Occupation: Electrical/electronic
engineering[A]; 2002: Percent of total: 4.
2000: Occupation: Accountants, auditors, and related occupations; 2000:
Percent of total: 3; 2002: Occupation: Computer-related,
other[A]; 2002: Percent of total: 3.
2000: Occupation: Architecture, other; 2000: Percent of total: 3;
2002: Occupation: Biological sciences; 2002: Percent of total:
3.
2000: Occupation: Economics; 2000: Percent of total: 2; 2002:
Occupation: Physicians and surgeons; 2002: Percent of total: 3.
2000: Occupation: Mechanical engineering; 2000: Percent of total: 2;
2002: Occupation: Miscellaneous managers and officials, other;
2002: Percent of total: 3.
2000: Occupation: Physicians and surgeons; 2000: Percent of total: 2;
2002: Occupation: Economics; 2002: Percent of total: 3.
2000: Occupation: Miscellaneous professional, technical, and
managerial; 2000: Percent of total: 2; 2002: Occupation:
Miscellaneous professional, technical, and managerial; 2002: Percent of
total: 2.
2000: Occupation: All other IT-related occupations[A]; 2000: Percent of
total: 2; 2002: Occupation: All other IT-related
occupations[A]; 2002: Percent of total: 2.
2000: Occupation: All other occupations; 2000: Percent of total: 19;
2002: Occupation: All other occupations; 2002: Percent of
total: 34.
2000: Occupation: Total approvals; 2000: Percent of total: 100;
2002: Occupation: Total approvals; 2002: Percent of total:
100.
Source: GAO analysis of BCIS data.
Note: The percent totals for the occupations above do not sum to 100
percent due to rounding.
[A] IT-related occupations.
[End of table]
In 2002, H-1B Beneficiaries Approved to Fill Selected Occupations Were
Younger and a Higher Percentage Had Advanced Degrees than U.S. Citizen
Workers:
In most of the five occupations we examined (electrical/electronic
engineers, systems analysts/programmers, biological/life scientists,
economists, and accountants/auditors), H-1B beneficiaries with
petitions approved in 2002 were younger and a higher percentage had an
advanced degree than the population of U.S. citizen workers in 2002. H-
1B beneficiaries with petitions approved in 2002 were younger than U.S.
citizen workers in four of the five occupations: electrical/electronic
engineers, systems analysts/programmers, economists, and accountants/
auditors (see fig. 2).[Footnote 14] For example, the median age of H-1B
beneficiaries approved for accountant/auditor positions was 32, which
was substantially younger than the median age of 38 for U.S. citizen
accountants/auditors. The largest difference between the median ages,
about 9 years, was for U.S. citizens and H-1B beneficiaries approved
for electrical/electronic engineer positions. We found no significant
difference in the median ages of H-1B beneficiaries and U.S. citizens
in biological/life scientist positions.
Figure 2: Median Age of H-1B Beneficiaries Approved in 2002 and U.S.
Citizen Workers in 2002 in Selected Occupations:
[See PDF for image]
[A] Age differences between H-1B beneficiaries and U.S. citizen workers
are significant at the 95-percent confidence level.
[End of figure]
In the three occupational groups (electrical/electronic engineers,
systems analysts/programmers, and accountants/auditors) for which
there were sufficient data to compare education levels, a higher
percentage of H-1B beneficiaries with petitions approved in 2002 had
earned a graduate or professional degree than U.S. citizen workers (see
fig. 3). For example, 50 percent of H-1B beneficiaries approved to fill
electrical/electronic engineer positions had graduate degrees,
compared with 20 percent of U.S. citizen electrical/electronic
engineers.[Footnote 15] Insufficient data precluded us from analyzing
the education levels of U.S. citizen biological/life scientists and
economists.
Figure 3: Percentages of H-1B Beneficiaries Approved in 2002 and U.S.
Citizen Workers in 2002 with Graduate Degrees by Selected Occupations:
[See PDF for image]
Note: Figure 3 does not include information on education for
biological/life scientists and economists because the CPS sample sizes
were too small to analyze.
[A] Educational attainment differences between H-1B beneficiaries and
U.S. citizen workers are significant at the 95-percent confidence
level.
[End of figure]
The salaries of H-1B beneficiaries and U.S. citizen workers differed
from each other when examined in relation to their education levels and
age.[Footnote 16] In the three occupational groups (electrical/
electronic engineers, systems analysts/programmers, and accountants/
auditors) where there were sufficient data to compare salaries by age
and education level, in 2001, salaries listed on petitions for H-1B
beneficiaries were higher (by about $7,000 - $10,000) than salaries
reported by U.S. citizen workers, for those who were 18-30 years of age
and did not have graduate degrees (see fig. 4). In contrast, salaries
listed on petitions for H-1B beneficiaries approved for either
electrical/electronic engineer or systems analyst/programmer positions
who were 31-50 years of age and had graduate degrees were lower (by
about $11,000 - $22,000) than salaries reported by U.S. citizens with
the same characteristics. In addition, salaries listed on petitions for
H-1B beneficiaries approved for electrical/electronic engineer
positions who were 31-50 years old and did not have graduate degrees
were lower (by about $5,000) than salaries reported by their U.S.
counterparts. There were no significant differences between the annual
salaries of 31-50 year-olds in all other cases shown in figure 4.
Insufficient data precluded us from making determinations about the
relationship of age and education to the salaries of H-1B beneficiaries
and U.S. citizens who were 18-30 year-olds with graduate degrees, or
those who were in economist or biological/life scientist positions.
(See table 7 in app. II for more details.) In addition to the factors
we examined, a number of other factors can affect earnings, such as
years of experience and geographic location. However, BCIS does not
collect data on years of experience or geographic location for H-1B
beneficiaries.
Figure 4: Median Annual Salaries of H-1B Beneficiaries Approved in 2001
and U.S. Citizen Workers in 2001 in Selected Occupations, by Age and
Education:
[See PDF for image]
Note: Figure 4 does not include information on salaries for persons age
18 to 30 with graduate degrees or for economists and biological/life
scientists because the CPS sample sizes were too small to analyze.
[A] The differences in salaries between H-1B beneficiaries and U.S.
citizen workers are statistically significant at the 95-percent
confidence level.
[B] Indicates those with bachelor's degrees, or less education.
[C] Indicates those with graduate degrees.
[End of figure]
Almost one-third of H-1B beneficiaries with petitions approved in 2002
were born in India, with the second highest percentage of H-1B
beneficiaries born in China, followed by Canada, the Philippines, and
the United Kingdom (see fig. 5). The remaining 45 percent of H-1B
beneficiaries represented an array of roughly 200 other countries.
Figure 5: Countries of Birth for H-1B Petition Approvals, 2002:
[See PDF for image]
[End of figure]
H-1B Petition Approvals and U.S. Citizen Employment in Selected
Occupations Declined from 2001 to 2002:
After reaching a high level in 2001, the number of H-1B petition
approvals has recently declined substantially. The numbers of both
initial and continuing petitions approved increased from 2000 to 2001
and declined well below 2000 levels in 2002, as shown in figure 6. The
decline in petition approvals for systems analysis/programming
positions constituted 70 percent of the decline in the total number of
petition approvals from 2001 to 2002. For each of the 3 years, a larger
number of initial petitions were approved than continuing petitions.
Figure 6: Total Initial and Continuing H-1B Petitions Approved
Annually, Calendar Years 2000 through 2002:
[See PDF for image]
[End of figure]
From 2000 to 2001, the estimated numbers of H-1B petition approvals and
U.S. citizens employed in most of the five occupations we examined
increased significantly (see table 2). For example, the number of
petitions approved in biological sciences positions increased by 1,685
to 5,454, and employment for U.S. citizen biological/life scientists
increased by 14,448 to 59,511. However, as U.S. citizen employment
declined from 2001 to 2002, so did the number of H-1B petition
approvals (see table 2). In particular, H-1B petition approvals and
U.S. citizen employment decreased in IT occupations. For example, the
number of H-1B petition approvals for systems analysis/programming
positions dropped by 106,671 to 56,184, and the estimated number of
U.S. citizen systems analysts/programmers employed decreased by 147,005
to 1,577,427.[Footnote 17]
Table 2: Change in H-1B Petition Approvals and U.S. Citizen Employment
for Selected Occupations, 2000-2001, 2001-2002:
Occupation: Electrical/electronic engineers; Change from 2000-2001: H-
1B petition approvals: 2,840; Change from 2000-2001: U.S citizen
employment estimates: 16,868; Change from 2001-2002: H-1B
petition approvals: -8,426; Change from 2001-2002: U.S citizen
employment estimates: -54,031.
Occupation: Systems analysts/programmers; Change from 2000-2001: H-1B
petition approvals: 17,513; Change from 2000-2001: U.S citizen
employment estimates: -62,852; Change from 2001-2002: H-1B
petition approvals: -106,671; Change from 2001-2002: U.S citizen
employment estimates: -147,005.
Occupation: Biological/life scientists; Change from 2000-2001: H-1B
petition approvals: 1,685; Change from 2000-2001: U.S citizen
employment estimates: 14,448; Change from 2001-2002: H-1B
petition approvals: -233; Change from 2001-2002: U.S citizen employment
estimates: -10,840.
Occupation: Economists; Change from 2000-2001: H-1B petition approvals:
1,534; Change from 2000-2001: U.S citizen employment estimates: -8,700;
Change from 2001-2002: H-1B petition approvals: -1,467; Change
from 2001-2002: U.S citizen employment estimates: -7,868.
Occupation: Accountants/auditors; Change from 2000-2001: H-1B petition
approvals: 3,677; Change from 2000-2001: U.S citizen employment
estimates: 15,099; Change from 2001-2002: H-1B petition
approvals: -3,082; Change from 2001-2002: U.S citizen employment
estimates: 5,701.
Source: GAO analysis of BCIS and CPS data.
[End of table]
The Majority of Employers Interviewed Reported That Skills, Rather Than
Immigration Status, Determine Employment Decisions, but the Extent to
Which Wage Plays a Role Is Unknown:
All 36 employers that we interviewed said they made hiring and layoff
decisions about workers by selecting and retaining candidates with the
skill sets needed for the job, and the majority (19) of employers said
that they did not treat H-1B workers differently when making these
decisions. Most of the employers who said immigration status was a
factor in their decisions noted that they hired H-1B workers only when
qualified U.S. workers were not available. Despite increases in
unemployment among highly skilled U.S. workers, about two-thirds of
employers said that finding workers with the skills needed in certain
engineering and other science-related occupations remains difficult.
Employers who laid off workers said that these decisions were based on
whether the employee had the skills that the business needed for the
future. While employers cited disadvantages to the H-1B program, such
as cost and lengthy petition processing times, they said they would
continue to use the program to meet skill needs. Some employers said
that they hired H-1B workers in part because these workers would often
accept lower salaries than similarly qualified U.S. workers; however,
these employers said they never paid H-1B workers less than the
required wage. Labor is responsible for enforcing H-1B wage agreements
and has continued to find instances of employers paying H-1B workers
less than the wages required by law, but the full extent to which such
violations occur is unknown.
Most of the information in this section is based on our interviews with
employers of H-1B workers. We contacted 145 employers to discuss issues
related to the H-1B program, and 36, or 25 percent, of the employers
agreed to speak with us. Therefore, our results may be affected by this
self-selection and cannot be viewed as representative of all H-1B
employers.
The Majority of Employers Said They Recruited and Hired Workers Based
on Skill Needs, Regardless of Visa Status:
All employers interviewed said that finding qualified workers with the
needed skill sets was the main factor in recruiting and hiring
candidates, and the majority (19) of the 36 employers said that H-1B
candidates were not treated differently in the recruiting and hiring
process. Several employers mentioned that they were looking for
experienced workers and that qualified candidates often had a minimum
of 2 to 3 years of relevant work experience. These employers said their
need to remain competitive prevented them from spending time to train
workers who did not have the necessary skills. In addition to the need
for technical skills and experience, employers that hired for
consulting positions--in which workers are sent to different job
locations or relocated frequently--said that flexibility was an
important consideration in hiring decisions. These employers said that
H-1B workers, having moved to the United States from another country,
were very flexible in moving within the United States.
Many employers told us that immigration status was a factor in their
decision-making when they looked for candidates with experience in
particular skill sets. Most of these employers said that they looked at
available U.S. workers before considering applicants that required H-1B
visa sponsorship and that they hired H-1B workers only when there were
no qualified U.S. workers available. One company that hired H-1B
workers primarily for product development engineering said that company
policy states that H-1B workers can only be hired after managers
conduct rigorous and unsuccessful searches for qualified U.S.
candidates. Other companies told us that because of the costs of
processing and legal fees, they hired candidates requiring H-1B
sponsorship as a last resort.
Six employers cited the cost of U.S. labor as another factor in
employment decisions. While these employers said that they never paid
H-1B workers salaries below the prevailing wage, they did acknowledge
that H-1B workers were often prepared to work for less money than U.S.
workers. These employers said that they could not compete with the
large salaries offered to U.S. workers by the major IT and
pharmaceutical companies. These employers also told us that they had to
recruit overseas because U.S. workers either demanded salaries that
were too high or were already employed with other companies. A number
of employers interviewed acknowledged that some H-1B workers coming
directly from other countries might initially have accepted an offer
with lower pay, but that it would have been unwise for employers to pay
these workers less than their U.S. counterparts because they would soon
leave for a higher wage offered by a different employer.
Half of the employers we interviewed said they did not recruit overseas
for U.S. positions, but instead recruited workers through a variety of
methods, including employee referrals, the Internet, and outreach at
U.S. graduate schools. These employers said that they used the same
methods to recruit H-1B candidates and U.S. workers. Employee referrals
and job boards on the Internet were the most commonly cited recruiting
methods. Several employers noted that many H-1B workers were hired
through referrals by other workers already employed by their companies.
In addition, about two-thirds of employers said that most H-1B workers
hired were already in the United States attending graduate schools on
student visas or working for another employer on an H-1B visa.
Many of the employers interviewed said that they recruited overseas for
U.S. positions before the recent economic downturn because they could
not find enough qualified U.S. workers. However, most of these
employers said they have not recruited overseas for these positions
since the downturn. One employer cited the anticipation of Year 2000
computer problems as a major factor in recruiting overseas, claiming
the company needed workers who were skilled in programming older
mainframe systems, whereas available U.S. workers were experienced in
more advanced technologies. Many of the employers interviewed reported
that there is a greater supply of workers for certain IT positions
(e.g., systems analysts and programmers) since the economic downturn,
but also said they have substantially reduced their hiring since the
economic downturn and have cut back on their use of the H-1B program.
Of the 36 employers we interviewed, about two-thirds said that despite
the increase in the number of unemployed workers since the economic
downturn, finding qualified workers in some engineering and other
science-related occupations remains difficult. These employers told us
that they look for superior candidates or those who are in fields with
a smaller pool of qualified candidates, such as chemists. One Internet
company said that it is difficult to hire the most productive workers
because such top performers are unlikely to be looking for work. Four
employers said they were looking for candidates with unique skills. For
example, one employer told us that foreign workers who helped develop
products overseas were the most qualified to help introduce those
products to the U.S. market.
Employers Interviewed Said They Released Workers Based on Business
Needs, Regardless of Visa Status:
Thirty of the 36 employers interviewed experienced layoffs, and all 30
said that the layoffs were based on whether the employees had the skill
sets that the business would need in the future, regardless of their
immigration status. Seven of these 30 employers also added that
employee performance was a major consideration in layoff decisions.
Several companies said that layoffs were due to positions being
eliminated or decisions to close offices in certain locations. However,
some companies said that if they were eliminating a product line or
regional office, employees--whether H-1B workers or U.S. citizens--
would be transferred to another division or product line if their
skills were needed. All 30 employers said that H-1B status was not a
factor in these decisions, and 19 of these employers reported that they
had laid off H-1B workers. According to a few employers, H-1B workers
were often the last to be released because they frequently work in
research and development positions that create new products or other
areas of the business that generate revenue. Details about the number
of workers laid off by employers were not publicly available, and most
employers declined to share this information with us.
Labor associations argue that U.S. workers are being displaced by H-1B
workers whom employers view as a more affordable source of labor. These
groups cited anecdotal accounts of employers laying off U.S workers and
then retaining or hiring H-1B workers for the same positions or
outsourcing the work to companies using foreign labor. In the case of
H-1B dependent employers, the law prohibits companies from hiring H-1B
workers when it has the effect of displacing similarly employed U.S.
workers in the workforce. Although Labor has found no instances of such
illegal displacement by H-1B dependent employers, a few cases are
currently under investigation.
Most Employers Cited Cost and Lengthy Petition Processing Time as Major
Disadvantages of the H-1B Program, but Said They Will Continue to Use
the Program to Find the Skills Needed:
Nearly all employers interviewed said that the length of time required
to process petitions is a major disadvantage of the H-1B program. About
half of these employers said that hiring an H-1B worker could take from
2 to 6 months, but that they often pay an additional $1,000 fee for
premium processing, which substantially reduces processing time. In
addition, most employers interviewed said that the combination of
processing fees and legal fees made the program very costly, with costs
cited ranging from $2,500 to $8,000 to hire an H-1B worker.
Citing their need to fill permanent positions, some employers noted
that the main disadvantage of the H-1B program is its temporary
provision of labor. These employers said they experience a substantial
loss of intellectual capital when an H-1B visa has expired and a
foreign national is forced to leave the United States. Nearly all
employers interviewed said that in order to retain these foreign
workers, they often sponsored H-1B workers for permanent residency
either as part of their initial employment offer or after a certain
period of employment. Some of these employers said that the fees
associated with applications for permanent residency can raise the cost
of hiring an H-1B worker substantially, with a few citing costs as high
as $10,000 to $15,000. A few companies said that if their H-1B workers
were unable to obtain permanent residency, they would send them to one
of their foreign offices for a year and then bring them back to the
United States on new H-1B visas.
Despite the disadvantages of the H-1B program cited, 31 of the 36
employers interviewed said they would continue to use the program in
the future to meet skill needs. These employers believe that once the
economy recovers it will be difficult to find enough qualified U.S.
workers, and that the H-1B program gives them the opportunity to access
a larger pool of workers. Of the 24 employers that commented on the H-
1B cap, 16 said they were concerned that a limit of 65,000 would create
processing backlogs at BCIS when the economy improves, and feared that
they would have to wait several months longer to hire H-1B workers, as
was the case when the cap was reached in 2000.
While employers said that they would continue to use the H-1B program,
a few employers mentioned that they are seeking additional visa options
for bringing highly skilled workers to the United States. For example,
in recent years, employers have increasingly turned to the L-1 visa, an
intracompany transfer visa that can be used by companies to bring their
foreign professional workers to the United States on a temporary basis
(see fig. 7).[Footnote 18] L-1 visas do not have an annual cap and are
not subject to prevailing wage laws. Department of State statistics
show that the use of L-1 visas has increased substantially since fiscal
year 1998. The number of L-1 visas issued in fiscal year 1998 was
38,307 and rose to 41,739 in fiscal year 1999, peaked in fiscal year
2001 at 59,384, and decreased slightly in fiscal year 2002 to 57,721.
Eight companies noted that the process to obtain an L-1 visa was less
cumbersome than the H-1B visa process, and a few said that they planned
to increase use of the L-1 visa in the future.
Figure 7: L-1 Visa Issuances, Fiscal Years 1998 through 2002:
[See PDF for image]
[End of figure]
In addition to using other visas, some employers said that they are now
considering outsourcing work or moving their own operations offshore to
remain competitive. A few employers said that if they cannot find
enough highly skilled workers within the United States, they would
start operating overseas. One offshore IT services company said its
competitive advantage comes from offering U.S. clients IT services in
India, which can significantly reduce costs. According to a temporary
staffing agency, some companies are increasingly using contract or
temporary staff as a way of cutting labor costs and avoiding the bad
publicity associated with layoffs.
The Extent to Which Wage Is a Factor in Employment Decisions Is
Unknown:
While a number of employers acknowledged that some H-1B workers might
accept lower salaries than U.S. workers, the extent to which wage is a
factor in employment decisions is unknown. Labor's Wage and Hour
Division (WHD), which is responsible for ensuring that H-1B workers are
receiving legally required wages, has continued to find instances of
program abuse. As shown in table 3, the number of investigations in
which violations were found doubled from fiscal year 2000 to 2002, and
the amount of back wages owed to H-1B workers by employers increased
from $1.6 million in fiscal year 2000 to $4.2 million in fiscal year
2002. These violations were largely due to employers bringing H-1B
workers into the United States to work, but not paying them any wages
until jobs are available,[Footnote 19] according to WHD officials. This
dramatic increase in violations and back wages owed to H-1B workers may
be due to the increase in the number of H-1B workers who have entered
the country over the years and does not necessarily indicate an
increase in the percentage of H-1B workers affected by wage violations.
Table 3: Department of Labor H-1B Investigations, Violations
Identified, and Back Wages Due:
Fiscal year: 2000; Investigations finalized: 58; Number of
investigations showing violation: 51; Investigations showing a
violation as a percentage of total investigations finalized: 88%;
Investigations where back wages found due: 49; Amount of back wages
found due: $1,629,173; Number of employees due back wages: 339.
Fiscal year: 2001; Investigations finalized: 60; Number of
investigations showing violation: 54; Investigations showing a
violation as a percentage of total investigations finalized: 90%;
Investigations where back wages found due: 48; Amount of back wages
found due: $1,335,147; Number of employees due back wages: 198.
Fiscal year: 2002; Investigations finalized: 134; Number of
investigations showing violation: 112; Investigations showing a
violation as a percentage of total investigations finalized: 84%;
Investigations where back wages found due: 94; Amount of back wages
found due: $4,211,209; Number of employees due back wages: 580.
Fiscal year: 2003 (thru 3-03); Investigations finalized: 71; Number of
investigations showing violation: 62; Investigations showing a
violation as a percentage of total investigations finalized: 87%;
Investigations where back wages found due: 56; Amount of back wages
found due: $2,126,881; Number of employees due back wages: 478.
Source: Department of Labor, Wage and Hour Division.
[End of table]
The extent to which violations of the H-1B program take place is
unknown and may be due in part to WHD's limited investigative
authority. WHD can initiate H-1B-related investigations only under
limited circumstances. WHD may investigate (1) when a complaint is
filed by an aggrieved person or organization, such as an H-1B worker, a
U.S. worker, or the employee bargaining representative; (2) on a random
basis, employers, who, within the previous 5 years, have been found to
have committed a willful failure to meet LCA work conditions; and (3)
if it receives specific credible information from a reliable source
(other than the complainant) that the employer has failed to meet
certain specified work conditions. According to WHD officials, H-1B
workers may be reluctant to complain, given their dependency upon their
employers for continued residency in the United States. In 2000, we
suggested that the Congress consider broadening Labor's enforcement
authority to improve its ability to conduct investigations under the H-
1B program. In response, Labor concurred with our suggestion,
indicating that it has long urged that the Congress reconsider and
expand the narrow limits on its enforcement authority.[Footnote 20]
Little Is Known about the Status of H-1B Workers, but New Systems Are
Being Developed to Improve Tracking Information:
Little is known about the status of H-1B workers due to the limitations
of current DHS tracking systems, but new systems to provide more
comprehensive information are being developed. One reason DHS is unable
to determine the number of H-1B workers who are in the United States at
a given time is because it has two separate tracking systems that do
not share data. The Non-Immigrant Information System (NIIS) has data on
entries and departures of H-1B workers and the Computer Linked
Application Information Management System 3 (CLAIMS 3) has data on
changes in visa status, but data from both of these systems are needed
to calculate the number of H-1B workers in the United States. In
addition, while DHS collects information on departures, change of visa
status, and occupations performed under a new status, this information
is not consistently collected and entered into current systems. DHS has
recognized the need for more comprehensive immigration data and is
working to develop improved tracking systems. One system, known as the
U.S. Visitor and Immigrant Status Indicator Technology System (US-
VISIT), is intended to incorporate data managed by DHS as well as other
agencies to provide a foreign national's complete immigration history.
System plans also provide for capabilities to generate aggregated
reports on foreign nationals. In addition to information systems
issues, we also determined that DHS's ability to provide information on
H-1B workers is limited because it has not issued consistent guidance
or any regulations on the legal status of unemployed H-1B workers who
remain in the United States while seeking new jobs. The lack of clear
guidance or any regulations on this issue has resulted in uncertainty
among H-1B workers and employers about the appropriate actions needed
for being in compliance with the law.
DHS Has Incomplete Information on H-1B Worker Entries, Departures, and
Changes of Visa Status:
DHS cannot account for all the H-1B worker entries, departures, and
changes of visa status using its current tracking systems, because NIIS
and CLAIMS 3 data are not integrated, and data for certain fields in
each of these systems are not consistently collected and entered. As a
result, DHS is not able to provide some key information needed to
oversee the H-1B program and assess its effects on the U.S. workforce.
This includes information on the number of H-1B workers in the United
States at any time, the extent to which these workers become
unemployed, the extent to which H-1B workers become long-term members
of the labor force through other immigration statuses, and the
occupations they fill as permanent members of the labor force.
We found that obtaining better arrival and departure information on H-
1B workers requires integration of change of status data from CLAIMS 3
with data from NIIS, and that such integration has proven to be
challenging. Currently, if a foreign national enters the United States
under a student visa and later becomes an H-1B worker, NIIS will not
have a record that indicates this person is an H-1B worker, unless the
person exits and re-enters the United States under the H-1B
visa.[Footnote 21] In 2001, DHS officials attempted to obtain better
information on the number of nonimmigrants in the United States and
their current statuses by matching CLAIMS 3 and NIIS data using
automated formulas, but found that about 60 percent of the records
between these two systems still needed to be matched manually. This was
mainly because the two systems do not have unique identifiers for
matching records. While DHS is examining ways to improve its ability to
match these records through formulas or by creating unique identifiers,
arrival and departure data continue to be separated from change of
status data.
Although data integration could improve information on H-1B workers,
DHS may continue to face challenges accounting for all departures
because these data are not consistently collected. While NIIS is
supposed to maintain departure records for H-1B workers, along with
other nonimmigrants,[Footnote 22] data from fiscal years 1998 through
2000 indicate that departure information for foreign nationals is
missing in about 20 percent of the cases.[Footnote 23] DHS cannot
account for all H-1B worker departures because some nonimmigrants,
especially those departing through land borders, do not submit
departure forms when leaving the United States. The United States has
an agreement with Canada that allows Canadian immigration officials to
collect departure forms and submit them to DHS. However, Canadian
officials are not required to collect these forms and, therefore, some
nonimmigrant departures from the United States through Canada are not
recorded. DHS also does not have immigration officials at some
departure areas along the Mexican border, thereby relying on
nonimmigrants to voluntarily deposit departure forms in collection
boxes. DHS officials also told us that airlines do not consistently
collect and/or return departure forms to DHS. In addition, some H-1B
workers become permanent residents and, therefore, are no longer
required to submit departure forms when exiting the country, leaving
NIIS with no record of their departures from the United States.
Moreover, DHS does not consistently enter change of status and
occupation data into CLAIMS 3. As a result, it is not possible to
determine either the number of H-1B workers who remained a part of the
U.S. workforce by becoming permanent residents or other employment-
related visa holders and the types of jobs they performed. About 50
percent of electronic records on permanent residents do not include
data on residents' prior visa status, according to a DHS official.
Also, in fiscal years 2000 and 2001, about 20 to 25 percent of
electronic records on permanent residents who were known to have been
H-1B workers did not contain information on their occupations. In the
data sets used to determine the number of nonimmigrants, such as H-1B
workers, who changed to other employment-related visa statuses, the
prior status data was missing in 30 percent of the cases. In addition,
BCIS officials told us that occupation data for H-1B workers who
changed to other employment-related visa statuses was often missing,
but they were unable to tell us the extent to which this occurred.
Although no formal studies have been conducted to determine why these
data are missing, DHS officials believe that this is primarily due to
contractors not entering prior visa status and occupation information
into CLAIMS 3. One official said that some data contractors may not
enter this information because CLAIMS 3 will accept records if the
prior visa status and occupations fields are left blank. These data
could also be missing because individuals without a prior status or
occupation may leave these fields blank on their applications. These
individuals, such as spouses of permanent residents, may be coming
directly from a foreign country without having previously entered the
United States under a nonimmigrant visa.
DHS also maintains information in CLAIMS 3 that could indicate whether
an H-1B worker is no longer employed and possibly no longer in H-1B
status, but the agency has faced challenges with collecting this
information. When H-1B workers become unemployed before their visas
expire, employers are required to submit a letter to DHS stating that
these workers are no longer employed with them.[Footnote 24] DHS uses
this information to revoke the H-1B petitions, and this is indicated in
CLAIMS 3. However, agency officials do not believe that all employers
are submitting these letters, because DHS officials believe they have
not received an equal number of subsequent employment petitions as
notices that the H-1B worker is no longer with a former employer.
Agency officials said that they are not able to better ensure the
collection of these letters because they do not have the resources to
proactively monitor employers. In addition, since the agency is not
currently concerned about reaching the H-1B worker cap on petitions, a
6-month to a year lag time exists for entering data about revoked
petitions.
DHS Is Developing New Data Systems to Obtain More Comprehensive
Tracking Information:
DHS recognizes the need for a more integrated system to track
information on foreign nationals and is currently developing systems to
meet this need. DHS is mandated to develop an information system that
will integrate arrival and departure information on foreign nationals
from databases within DHS and across other government agencies, such as
the Department of State and law enforcement agencies. DHS is currently
working with State to develop this system, known as US-VISIT, which is
mandated by Congress to be fully implemented by December 2005. DHS
plans call for US-VISIT to have the capability to generate a single
comprehensive record of an individual's entire immigration history,
from the initial request to enter the United States (e.g., H-1B worker
petitions) through departure and any re-entry. DHS's plans also call
for individual records in US-VISIT to be updated almost immediately as
users of the different component databases update their records. For
example, if a DHS official updates a nonimmigrant's record to reflect
that a person has changed visa status, that person's US-VISIT record
should reflect this change almost immediately. Moreover, DHS plans for
US-VISIT to be able to generate statistical reports on nonimmigrants.
As required by law, these reports will include the number of
nonimmigrants, including H-1B workers, who have entered, exited, and
remained in the United States.
DHS Has Not Clarified the Status of Unemployed H-1B Workers through
Guidance or Regulations:
In addition to information systems issues, DHS's ability to provide
information on the status of the H-1B population is constrained because
it has not issued consistent guidance or any regulations for
implementing the visa portability provision of the American
Competitiveness in the Twenty-First Century Act of 2000 (AC21). This
has resulted in uncertainty about the extent to which unemployed H-1B
workers can legally remain in the United States while seeking new jobs.
Regulations have been in development for over 2 years, and interim
guidance has not clarified this issue. For example, 1999 guidance
stated that unemployed H-1B workers are out of status and should leave
the United States or seek a change in status. However, in 2001, DHS
issued guidance stating that AC21's visa portability provisions appear
to include unemployed individuals and that it expected to issue
regulations addressing their status.[Footnote 25]
Currently, BCIS officials are addressing this issue on a case-by-case
basis,[Footnote 26] and decisions have been inconsistent, according to
a few employers. These employers told us that in some cases, H-1B
workers who were unemployed for more than 3 months were required to
exit and re-enter the United States before beginning work with a new
employer because they were considered out of legal status. Yet,
overall, BCIS officials have not offered these employers clear
directions about allowable timeframes for H-1B workers to be unemployed
and remain in the country. This lack of clear guidance or any
regulations can contribute to uncertainties in the circumstances facing
these workers. Moreover, employers told us that this situation makes
planning a worker's starting date for a new job difficult. In addition,
if employers pay for the cost of re-entry, this process can impose an
unexpected cost of hiring an unemployed H-1B worker.
The agency has been working to develop regulations related to visa
portability since October 2000, but internal debates have prevented
regulations from being issued sooner, according to a BCIS official. For
example, the agency official told us that BCIS is concerned about
immigration enforcement issues that may arise by allowing unemployed H-
1B workers to remain in the United States. Labor officials said that
they were concerned about how unemployed H-1B workers in the United
States might impact government programs for the unemployed if, for
example, unemployed H-1B workers attempted to collect Unemployment
Insurance. In addition, a U.S. labor representative said that another
implication of allowing unemployed H-1B workers to remain in the United
States is that they will be competing with unemployed U.S. workers for
highly skilled positions.
Conclusions:
Much of the information policymakers need to effectively oversee the H-
1B program is not available because of limitations of DHS's current
tracking systems. Without this information, policymakers cannot
determine whether this program is meeting the need for highly skilled
temporary workers in the current economic climate and how to adjust
policies that may affect workforce conditions over time, such as the H-
1B visa cap, accordingly. Examples of needed information include the
total number of H-1B workers in the United States at a given time and
the numbers of H-1B workers employed in various occupations, the extent
to which H-1B workers become long-term members of the labor force
through permanent residency or other immigration statuses, and the
occupations they fill as long-term members of the labor force. Such
information could also assist policymakers in better determining
program effects on workforce conditions such as wages and the
proportion of jobs filled by H-1B workers. While DHS has long-term
plans for providing better information on H-1B workers, policymakers in
the interim need data to inform discussions of program changes.
Employers also have expressed concern about how BCIS determines the
legal status of unemployed H-1B workers. BCIS determines on a case-by-
case basis whether an unemployed H-1B worker is allowed to stay in the
United States while looking for another job. However, H-1B workers and
employers are unsure about whether these workers can be hired for new
positions without first having to exit and re-enter the country, which
would be required if the workers' legal immigration status was
determined to have expired. While this issue is no doubt a concern for
H-1B workers who have become unemployed, it is also a growing concern
to employers who may wish to hire these workers.
Recommendations for Executive Action:
To provide better information on H-1B workers and their status changes,
we recommend that the Secretary of DHS take actions to ensure that
information on prior visa status and occupations for permanent
residents and other employment-related visa holders is consistently
entered into their current tracking systems, and that such information
becomes integrated with entry and departure information when planned
tracking systems are complete.
In order to improve program management, we also recommend that the
Secretary of DHS issue regulations that address the extent to which
unemployed H-1B workers are allowed to remain in the United States
while seeking other employment.
Agency Comments:
We provided a draft of this report to DHS and Labor for their review.
DHS concurred with our recommendations and acknowledged the need for an
improved tracking system to link information related to H-1B
nonimmigrants among the State Department, Labor, and DHS. DHS also said
that it is in the planning stages to make changes to CLAIMS 3, which
will ensure that information on prior visa status and occupations for
permanent residents and other employment-related visa holders is
consistently entered. In addition, DHS said that issuing regulations is
a priority and that the final rule for implementing the law authorizing
visa portability for H-1B workers is undergoing revisions based on
intra-agency comments. DHS's comments are reprinted in appendix III.
Labor had no formal comments. DHS and Labor also provided technical
comments that we incorporated as appropriate.
As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from its issue date. At that time, we will send copies of this report
to the Secretary of Homeland Security, the Secretary of Labor,
appropriate congressional committees, and other interested parties. In
addition, the report will be available at no charge on GAO's Web site
at http://www.gao.gov.
If you or your staff have any questions about this report, please
contact me at (202) 512-7215. Other contacts and staff acknowledgments
are listed in appendix IV.
Sincerely yours,
Sigurd R. Nilsen
Director, Education, Workforce, and Income Security Issues:
Signed by Sigurd R. Nilsen:
[End of section]
Appendix I: Scope and Methodology:
To obtain information on the occupations H-1B beneficiaries were
approved to fill and demographic information and wage characteristics
for H-1B beneficiaries and U.S. citizens, we examined the Bureau of
Citizenship and Immigration Services' (BCIS) 2000-2002 H-1B petition
approval data for five key occupations: systems analysis and
programming; electrical/electronic engineering; economics;
accountants, auditors, and related occupations; and biological
sciences. In addition, we examined 2000-2002 Current Population Survey
(CPS) data on U.S. citizen employment in similar occupations.[Footnote
27]
CLAIMS 3 Data on H-1B Petition Approvals:
To obtain information on the occupations H-1B beneficiaries were
approved to fill, we examined 2000-2002 H-1B petition approval data
from BCIS's Computer Linked Application Information Management System
Local Area Network (CLAIMS 3 LAN).[Footnote 28] These data provided a
variety of information on the H-1B beneficiaries in each year, such as
the age, education level, and annual salary expected for each
beneficiary at the time the petition was filed.[Footnote 29] However,
neither the CLAIMS 3 LAN data nor BCIS itself can provide information
on how many H-1B beneficiaries approved for employment in a year are
actually working in the United States in any particular year. The
CLAIMS 3 LAN data may be informative about H-1B petitions approved in a
given year and about some characteristics of those beneficiaries.
However, these characteristics may not be indicative of the
characteristics of all H-1B workers in a given year. For example:
* Of the H-1B beneficiaries approved in 2001, we do not know the
proportion that began work in 2001. Some may not have started work
until 2002; others may not have started work at all.
* An individual H-1B worker could be represented in multiple petitions
filed by different employers in the same year.
* We do not know the proportion of H-1B workers in 2001 who obtained
their H-1B petition approvals in 2001, 2000, 1999, or 1998.
* Characteristics of H-1B beneficiaries approved in 2001 and working in
2001 may differ from characteristics of the H-1B workforce working in
2001 who received their approval in 1998-2000. For example, H-1B
workers approved in 1998-2000 could, on average, be older in 2001 than
those workers approved in 2001.
Because of these uncertainties, we do not know how well the
characteristics of the H-1B beneficiaries in any year would approximate
the characteristics of the population of H-1B workers actually employed
in that year.
Current Population Survey Estimates:
To obtain demographic information for U.S. citizens working in the five
occupations we examined, we used the monthly CPS from 2002. The CPS is
a monthly survey of about 50,000 households that is conducted by the
Bureau of the Census for the Bureau of Labor Statistics (BLS). The CPS
provides a comprehensive body of information on the employment and
unemployment experience of the nation's population. A more complete
description of the survey, including sample design, estimation, and
other methodology can be found in the CPS documentation prepared by
Census and BLS.[Footnote 30]
We used the 2002 CPS data to produce estimates of longest held job in
the previous year, highest degree attained, citizenship, and age. We
used the March 2002 Supplement of the Current Population Survey for all
estimates of median wages of U.S. citizens working for private
employers. This March Supplement (the Annual Demographic
Supplement)[Footnote 31] is specifically designed to estimate family
characteristics, including income from all sources and occupation and
industry classification of the job held longest during the previous
year. It is conducted during the month of March each year because it is
believed that since March is the month before the deadline for filing
federal income tax returns, respondents would be more likely to report
income more accurately than at any other point during the year.
[Footnote 32]
Sampling Error:
Because the CPS is a probability sample based on random selections, the
sample is only one of a large number of samples that might have been
drawn. Since each sample could have provided different estimates,
confidence in the precision of the particular sample's results is
expressed as a 95-percent confidence interval (e.g., plus or minus 4
percentage points). This is the interval that would contain the actual
population value for 95 percent of the samples that could have been
drawn. As a result, we are 95-percent confident that each of the
confidence intervals in this report will include the true values in the
study population. We use the CPS general variance methodology to
estimate this sampling error and report it as confidence intervals.
Percentage estimates we produce from the CPS data have 95-percent
confidence intervals of +/-10 percentage points or less. Estimates
other than percentages have 95-percent confidence intervals of no more
than +/-10 percent of the estimate itself. Consistent with the CPS
documentation guidelines, we do not produce annual estimates from the
monthly CPS data files for populations of less than 35,000, or
estimates based on the March Supplement data for populations of less
than 75,000. The blank cells in table 4 identify the estimates that we
do not produce because they are for small populations.
Table 4: Summary of Reportable Analyses:
Age; Electrical/electronic engineers: Yes; Systems analysts/
programmers: Yes; Biological/life scientists: Yes; Economists: Yes;
Accountants/auditors: Yes.
Educational attainment; Electrical/electronic engineers: Yes; Systems
analysts/programmers: Yes; Biological/life scientists: No;
Economists: No; Accountants/auditors: Yes.
Median annual salary; Electrical/electronic engineers: Yes; Systems
analysts/programmers: Yes; Biological/life scientists: No;
Economists: No; Accountants/auditors: Yes.
Source: GAO analysis of CPS data.
Note: 'Yes' indicates that we could report findings.
[End of table]
We compared CPS estimates of the number of U.S. citizen workers, age
distribution, and highest degree attained to comparable categories of
H-1B beneficiary approvals for the five occupation categories we
examined. While we attempted to produce CPS estimates of U.S. citizens
for a population that would be similar to H-1B workers, we could only
make comparisons to H-1B beneficiaries with petitions approved in a
particular year.
In order to compare the H-1B beneficiary occupations to CPS U.S.
workforce occupations, we combined some occupational categories in the
CPS to better match those of the BCIS data, as shown in table 5.
Table 5: Crosswalk from BCIS to CPS Codes:
BCIS codes: 030; BCIS occupational title: Systems analysis and
programming; CPS codes: 064, 229; CPS occupational title: Computer
systems analysts, computer programmers.
BCIS codes: 003; BCIS occupational title: Electrical/electronic
engineering; CPS codes: 055; CPS occupational title: Electrical and
electronic engineers.
BCIS codes: 160; BCIS occupational title: Accountants, auditors, and
related; CPS codes: 023; CPS occupational title: Accountants and
auditors.
BCIS codes: 050; BCIS occupational title: Economics; CPS codes: 166;
CPS occupational title: Economists.
BCIS codes: 041; BCIS occupational title: Biological sciences; CPS
codes: 078; CPS occupational title: Biological and life scientists.
Source: Monthly Current Population Survey, 2002, and BCIS.
[End of table]
In order to verify our estimates of the numbers of U.S. citizens in the
key occupations and their average annual salaries, we compared the
March Supplement employment statistics for 2001 to those reported in
the Occupational Employment Statistics (OES) 2001 survey. We did not
use the OES for our analysis because the survey collects data from
employers and does not provide information about individual workers,
such as age and education.
Salary Comparisons:
We compared the CPS median salary estimates for 2001 to median salary
figures reported for the 2001 H-1B beneficiaries for several
occupations, and for four age by education categories. For two of the
occupations (biological/life scientists and economists), we did not
produce CPS estimates due to insufficient data (see table 7). Although
several of the comparisons we were able to make did show a
statistically significant difference between the CLAIMS 3 H-1B
beneficiary median salary and the "comparable" CPS estimate, it is
difficult to interpret this result in terms of actual H-1B workers in
2001. There are several limitations that lead to uncertainty in the
interpretation of these results:
* Although reporting problems are an issue with any measure of income,
we have additional concerns about the validity of the H-1B beneficiary
salaries, because the frequency distributions of the salaries of H-1B
beneficiaries in the five key occupations showed that employers
reported a number of very low and very high salaries for the "annual
rate of pay" on the petition application. We had no basis for
determining whether the high and low salaries were data entry errors,
estimated payments for an employment period of more or less than a
year, or were very high or low for some other reason.
* The measures of median annual salaries for U.S. citizens could
include bonuses, but the median annual salaries listed on H-1B
beneficiary petition approvals most likely do not. Neither median
salary includes noncash benefits such as health insurance or pensions.
* CPS salary reported in March 2002 was for the longest held position
actually worked in 2001, and reported by the worker himself (or a
knowledgeable member of the household). In contrast, salaries reported
in the CLAIMS 3 database for H-1B beneficiaries are provided by the
employer requesting the petition approval in possibly 2000 or 2001 for
an H-1B beneficiary likely beginning work in 2001 or 2002.
* The 2001 H-1B workforce includes not only a portion of those H-1B
beneficiaries approved in 2001, but also those approved in prior years
and beginning to work in the United States in 1999, 2000, or 2001. In
2001, the more experienced H-1B workers may have salary patterns that
differ from new recipients in 2001.
* The definition of education level used to create our four age
categories by education level cells is somewhat different for the H-1B
beneficiaries as compared to the CPS U.S. workforce estimates. H-1B
beneficiary status requires the attainment of a bachelor's degree or
higher (or its equivalent) in the field of specialty. In contrast, the
education level recorded in the CPS is the highest degree attained -
not necessarily related to any particular occupation.
In light of these limitations, caution should be used in interpreting
differences found in comparing CPS 2001 median salary estimates and
2001 H-1B beneficiary salaries.
Employers Selected for Interviews:
To obtain information about the factors affecting employer decisions
about the employment of H-1B workers, we conducted site visits and
telephone interviews with 36 H-1B employers in 6 of the 12 states with
the largest number of H-1B petitioners--California, Maryland, New
Jersey, New York, Texas, and Virginia--selected for their geographic
dispersion. Employers were selected based on their number of H-1B
petition approvals and occupations for which they requested H-1B
workers in fiscal year 2000. Specifically, we selected a variety of
large (100 or more H-1B workers), medium (30-99 H-1B workers), and
small (29 or fewer H-1B workers) employers to participate in the study.
To obtain a range of occupations for which employers hired H-1B
workers, we also selected employers based on whether they hired H-1B
workers for either IT-related or non-IT-related positions, such as
those in accounting or life sciences. We used fiscal year 2000 BCIS
data to select employers because we wanted to capture any changes in H-
1B worker staff since the economic downturn.
Through interviews with these employers, we collected qualitative
information on the factors affecting employers' decisions in
recruiting, hiring, and laying off both H-1B workers and U.S. citizen
employees. Employer participation in this study was voluntary. We
contacted 145 employers, and 25 percent, or 36, of these employers
chose to participate; consequently, our results may be biased by this
self-selection. In order to provide a broader perspective, we
interviewed associations representing highly skilled workers and
associations representing employers to obtain their views on how
employers make decisions about their U.S. and H-1B workers. We also
interviewed Labor WHD officials about the agency's enforcement
authority and employer violations of the H-1B program requirements.
DHS Current and Planned Tracking Systems:
To obtain information available on H-1B workers' entries, departures,
and changes in visa status, we examined DHS data from current tracking
systems. However, we determined that these data had limitations that
precluded them from meeting our reliability standards. As a result, we
did not include them in our report. For example, we obtained data from
DHS on the total arrivals and departures of H-1B workers for fiscal
year 2000 and the number of permanent residents who reported previously
being H-1B workers immediately before changing status in fiscal years
2000 and 2001. According to DHS officials, these were the most recent
automated data available. We also obtained data on the number of H-1B
workers who changed from H-1B to other employment-related visa statuses
from January 1, 2000 to December 31, 2002. In addition, we spoke with
DHS officials about the limitations of these data, data on the
occupations of employment-related visa holders, and current tracking
systems.
We also obtained and reviewed reports on DHS's planned tracking
systems. Among the documents we reviewed were the concept of operations
for US-VISIT (formerly known as the entry/exit system), a report on
system requirements for US-VISIT, the Data Management and Improvement
Act Task Force's first annual report, and a report on the case
management system that is planned to replace CLAIMS 3. We also
interviewed DHS officials who are developing the new systems to learn
more about the planned system capabilities.
[End of section]
Appendix II: Age Distribution and Salaries of H-1B Beneficiaries and
U.S. Citizen Workers:
Tables 6 and 7 provide information on the age distribution and salaries
of H-1B beneficiaries and U.S. citizen workers.
Table 6: Percentage Distribution of the Age of H-1B Beneficiaries
Approved in 2002 and U.S. Citizen Workers in 2002:
Age (years): 20-24; Electrical/electronic engineers: H-1B: 2;
Electrical/electronic engineers: U.S.: 5; Systems analysts/
programmers: H-1B: 2; Systems analysts/programmers: U.S.: 6;
Biologists: H-1B: 1; Biologists: U.S.: 4; Economists: H-1B: 6;
Economists: U.S.: 15; Accountants/auditors: H-1B: 4;
Accountants/auditors: U.S.: 7.
Age (years): 25-29; Electrical/electronic engineers: H-1B: 27;
Electrical/electronic engineers: U.S.: 11; Systems analysts/
programmers: H-1B: 37; Systems analysts/programmers: U.S.: 17;
Biologists: H-1B: 12; Biologists: U.S.: 20; Economists: H-1B:
34; Economists: U.S.: 16; Accountants/auditors: H-1B: 30;
Accountants/auditors: U.S.: 16.
Age (years): 30-34; Electrical/electronic engineers: H-1B: 33;
Electrical/electronic engineers: U.S.: 12; Systems analysts/
programmers: H-1B: 39; Systems analysts/programmers: U.S.: 19;
Biologists: H-1B: 34; Biologists: U.S.: 14; Economists: H-1B:
31; Economists: U.S.: 17; Accountants/auditors: H-1B: 31;
Accountants/auditors: U.S.: 17.
Age (years): 35-40; Electrical/electronic engineers: H-1B: 22;
Electrical/electronic engineers: U.S.: 21; Systems analysts/
programmers: H-1B: 16; Systems analysts/programmers: U.S.: 19;
Biologists: H-1B: 37; Biologists: U.S.: 17; Economists: H-1B:
16; Economists: U.S.: 15; Accountants/auditors: H-1B: 19;
Accountants/auditors: U.S.: 18.
Age (years): 41+; Electrical/electronic engineers: H-1B: 16;
Electrical/electronic engineers: U.S.: 52; Systems analysts/
programmers: H-1B: 6; Systems analysts/programmers: U.S.: 39;
Biologists: H-1B: 16; Biologists: U.S.: 45; Economists: H-1B:
13; Economists: U.S.: 37; Accountants/auditors: H-1B: 17;
Accountants/auditors: U.S.: 42.
Source: GAO analysis of Bureau of Citizenship and Immigration Services
and Current Population Survey data.
[End of table]
Table 7: Median Annual Salaries of H-1B Beneficiaries Approved in 2001
and U.S. Citizen Workers in 2001 in Selected Occupations, by Age and
Education:
Occupation: Electrical/electronic engineers; Educational attainment:
Less than graduate degree; Age: 18-30; U.S. citizen median salary:
$52,000; H-1B beneficiary median salary: $60,000; Statistical
significance: H-1B higher.
Educational attainment: Occupation: Less than graduate degree; Age:
Occupation: 31-50; U.S. citizen median salary: Occupation: $70,000; H-
1B beneficiary median salary: Occupation: $65,000; Statistical
significance: Occupation: H-1B lower.
Educational attainment: Occupation: Graduate degree; Age: Occupation:
18-30; U.S. citizen median salary: Occupation: [A]; H-1B beneficiary
median salary: Occupation: $66,500; Statistical significance:
Occupation: [A].
Educational attainment: OccupationSystems analysts/programmers:
Graduate degree; Age: OccupationSystems analysts/programmers: 31-50;
U.S. citizen median salary: OccupationSystems analysts/programmers:
$88,000; H-1B beneficiary median salary: OccupationSystems analysts/
programmers: $77,000; Statistical significance: OccupationSystems
analysts/programmers: H-1B lower.
Occupation: Systems analysts/programmers; Educational attainment: Less
than graduate degree; Age: 18-30; U.S. citizen median salary: $45,000;
H-1B beneficiary median salary: $54,500; Statistical significance: H-1B
higher.
Educational attainment: Occupation: Less than graduate degree; Age:
Occupation: 31-50; U.S. citizen median salary: Occupation: $60,000; H-
1B beneficiary median salary: Occupation: $60,000; Statistical
significance: Occupation: No difference.
Educational attainment: Occupation: Graduate degree; Age: Occupation:
18-30; U.S. citizen median salary: Occupation: [A]; H-1B beneficiary
median salary: Occupation: $59,500; Statistical significance:
Occupation: [A].
Educational attainment: OccupationAccountants/auditors: Graduate
degree; Age: OccupationAccountants/auditors: 31-50; U.S. citizen
median salary: OccupationAccountants/auditors: $87,000; H-1B
beneficiary median salary: OccupationAccountants/auditors: $65,000;
Statistical significance: OccupationAccountants/auditors: H-1B lower.
Occupation: Accountants/auditors; Educational attainment: Less than
graduate degree; Age: 18-30; U.S. citizen median salary: $33,280; H-1B
beneficiary median salary: $40,000; Statistical significance: H-1B
higher.
Educational attainment: Occupation: Less than graduate degree; Age:
Occupation: 31-50; U.S. citizen median salary: Occupation: $39,014; H-
1B beneficiary median salary: Occupation: $39,000; Statistical
significance: Occupation: No difference.
Educational attainment: Occupation: Graduate degree; Age: Occupation:
18-30; U.S. citizen median salary: Occupation: [A]; H-1B beneficiary
median salary: Occupation: $46,500; Statistical significance:
Occupation: [A].
Educational attainment: OccupationEducational attainment: Graduate
degree; Age: OccupationAge: 31-50; U.S. citizen median salary:
OccupationU.S. citizen median salary: $50,000; H-1B beneficiary median
salary: OccupationH-1B beneficiary median salary: $55,000; Statistical
significance: OccupationStatistical significance: No difference.
Source: GAO analysis of Bureau of Citizenship and Immigration Services
and Current Population Survey data.
[A] Indicates that there were insufficient observations to make a
determination.
[End of table]
[End of section]
Appendix III: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Mr. Sigurd Nilsen:
Director, Education, Workforce and Income Security Team:
U.S. General Accounting Office 441 G Street, N.W. Washington, D.C.
20548:
Dear Mr. Nilsen:
We have received the General Accounting Office draft report GAO-03-883,
entitled H-1B Foreign Workers: Better Tracking Needed to Help Determine
H-1B Program's Effects on U.S. Workforce. We appreciate the opportunity
to comment on the report.
The Department of Homeland Security (DHS) generally concurs with the
report recommendations and acknowledges the need for an improved
tracking system to link information related to H-1B non-immigrants
between the Department of Labor (DOL), DHS, and the Department of State
(DOS). All three Departments are involved in the processing and
tracking of H-1B non-immigrants. The DOL certifies an employer's Labor
Condition Application, which may include the employer's acknowledgement
of certain responsibilities and benefits to be provided to the H-1B
non-immigrant. The DHS adjudicates the petition submitted by the
employer for the foreign worker. In many instances the foreign worker
is outside of the United States and must be issued a visa by DOS based
on the approved petition. However, DOS may choose not to issue the visa
and send the approved petition back to DHS for revocation.
DHS is in the planning stages to make changes to the Computer Linked
Application Information Management System 3 (CLAIMS 3), which will
ensure that information on prior visa status and occupations for
permanent residents and employment-related visa holders is consistently
entered. There is also an on-going project to develop an interface
between CLAIMS 3 and the United States Visitor and Immigrant Status
Indicator Technology. When this interface is fully implemented, it will
have the capability to track the arrival and departure of H-1B visa
holders.
To improve program management, issuing regulations is a priority of
U.S. Citizenship and Immigration Services under the direction of DHS.
The final rule for implementing the portability provision of the
American Competitiveness in the Twenty First Century Act of 2000 is
undergoing revisions based on intra-agency comments. While GAO
correctly noted that the Act was enacted almost 2 years ago, the rule
combines four additional pieces of H-1B legislation, including the most
recent H-1B legislation enacted in November of 2002.
Specific comments on the report are as follows:
Mr. Sigurd Nilsen Page 2:
* The DHS currently has a Systems Change Request 2679 for employment
related visas that would require adjudication officers to resolve the
visa class (class requested) on the I-129, Petition for a Nonimmigrant
Worker, if it is different from the class granted at point of
adjudication.
* The DHS also has a Systems Change Request 3280 that validates I-129W,
Petition for a Nonimmigrant Worker Filing Fee, information when the
petition is for an extension of stay. In addition, the change will allow
the system to ensure the current status is H-1 B. The occupation field
is a mandatory field in CLAIMS 3 if the petition is H-1 B, however, for
other employment-related visas, the system does not capture this
information.
* The current class for the non-immigrant change of status is not a
mandatory requirement in CLAIMS 3.
* The current status and occupation fields for permanent residents are
already in CLAIMS 3, however, they are not a mandatory requirement.
Thank you again for the opportunity to respond to the draft report. If
you have any questions, please contact Anna Dixon, DHS Audit Liaison,
at (202) 772-9580.
Sincerely,
Signed by:
Pamela J. Turner:
Assistant Secretary for Legislative Affairs:
[End of section]
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Andrew Sherrill (202) 512-7252 Mary Abdella (202) 512-5878:
Staff Acknowledgments:
In addition to the above contacts, Danielle Giese and Emily Leventhal
made significant contributions to this report. Also, Shana Wallace
assisted in the study design and analysis; Mark Ramage assisted in the
statistical analysis; Julian Klazkin provided legal support; and
Patrick DiBattista assisted in the message and report development.
[End of section]
Related GAO Products:
Information Technology: Homeland Security Needs to Improve Entry Exit
System Expenditure Planning. GAO-03-563. Washington, D.C.: June 9,
2003.
High-Skill Training: Grants from H-1B Visa Fees Meet Specific Workforce
Needs, but at Varying Skill Levels. GAO-02-881. Washington D.C.:
September 20, 2002.
Immigration Benefits: Several Factors Impede Timeliness of Applications
Processing. GAO-01-488. Washington, D.C.: May 4, 2001.
H-1B Foreign Workers: Better Controls Needed to Help Employers and
Protect Workers. GAO/HEHS-00-157. Washington, D.C.: September 7, 2000.
Immigration and the Labor Market: Nonimmigrant Alien Workers in the
United States. GAO/PEMD-92-17. Washington, D.C.: April 28, 1992.
FOOTNOTES
[1] A "specialty occupation" is defined as one requiring theoretical
and practical application of a body of highly specialized knowledge and
the attainment of a bachelor's degree or higher (or its equivalent) in
the field of specialty.
[2] H-1B beneficiaries are foreign nationals with approved petitions
for H-1B visas. We use "beneficiary" as opposed to "worker" to refer to
these nonimmigrants, because individuals approved for H-1B visas may
not actually become employed in the United States.
[3] On March 1, 2003, immigration and citizenship services formerly
provided by INS transferred over to the Department of Homeland Security
under the Bureau of Citizenship and Immigration Services. For this
report, we refer to BCIS or DHS, as appropriate, though the actions
described might have taken place before the transition occurred.
[4] We include the following occupations in our reference to those that
are IT-related: electrical/electronics engineering, systems analysis
and programming, data communications and networks, computer system user
support, computer system technical support, and other computer-related
occupations.
[5] Nonimmigrants are foreign nationals who come to the United States
on a temporary basis and for a specific purpose, such as to attain
education or to work.
[6] This report will focus solely on the specialty workers.
[7] In September 2000, we reported that due to legal limitations,
Labor's review of the LCA is perfunctory and adds little assurance that
labor conditions employers attest to actually exist. For more details,
see U.S. General Accounting Office, Better Controls Needed to Help
Employers and Protect Workers, GAO/HEHS-00-157 (Wash., D.C., Sept. 7,
2000).
[8] Employers must pay a fee of $1,000 for each H-1B petition, unless
exempt under law. As of July 30, 2001, employers that wish to expedite
the petition processing may pay an additional $1,000 for "premium
processing," which will guarantee processing within 15 calendar days.
[9] H-1B petitions approved for initial employment with U.S.
universities and nonprofit research organizations are not counted
against the annual cap.
[10] Due to problems with computerized tracking systems, in fiscal year
1999, BCIS approved a larger number of petitions than authorized by the
annual limit.
[11] See, e.g., the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001. Pub. L. No. 107-56, 115 Stat. 272. For more information about
legislation related to the entry/exit system capabilities, see U.S.
General Accounting Office, Information Technology: Homeland Security
Needs to Improve Entry Exit System Expenditure Planning, GAO-03-563
(Washington, D.C.: June 9, 2003).
[12] Data limitations precluded a direct comparison of the
characteristics and salaries of H-1B workers and U.S. citizen workers.
See appendix I for more details.
[13] Because BCIS is unable to determine the actual number of H-1B
workers who come to the United States once their petition is approved
and because of uncertainty about what year beneficiaries begin working
after approval, we cannot assess trends in H-1B employment, only in
petition approvals.
[14] For a more detailed breakout of the age distribution of H-1B
beneficiaries approved in 2002 and U.S. citizens in 2002, see appendix
2, table 6.
[15] H-1B workers are required to have a bachelor's degree or its
equivalent in order to meet the qualifications of their visa status. No
advanced degree is required.
[16] We used age as a proxy for experience, which is a factor that can
affect earnings. Age was presented in two categories to maximize data
available for estimation.
[17] From 2000-2002, about 4 to 6 percent of all H-1B petitions
adjudicated were denied, according to BCIS.
[18] L-1 visas can be issued to intracompany transferees who work for
an international firm or corporation in executive and managerial
positions or have specialized product knowledge. L-1 visa holders can
stay in the United States for up to 5 or 7 years, depending on the type
of services provided.
[19] Even if not yet working, employers must pay H-1B workers the
required wage beginning 30 days after their arrival in the United
States.
[20] GAO/HEHS-00-157.
[21] We found that about 42 percent of workers approved for H-1B visas
in 1999 were already in the United States when their visas were
approved. See GAO/HEHS-00-157 for more information.
[22] DHS obtains the information in NIIS from Form I-94, the Arrival/
Departure Record, which nonimmigrants must submit to DHS when entering
and leaving the United States. Nonimmigrants with visas that allow them
to leave and re-enter freely, such as H-1B workers, will have completed
multiple I-94 forms and have multiple arrival/departure records.
[23] DHS became aware of missing departure records when attempting to
estimate the number of nonimmigrants who overstayed their allowed
period of stay.
[24] Employers are not required to report the reasons why H-1B workers
are no longer working for them, and when DHS receives information on
causes of unemployment, DHS officials do not have to input this
information into CLAIMS 3.
[25] A 2001 BCIS memorandum stated that the agency plans to address the
legal status of unemployed H-1B workers in their regulations related to
visa portability. Specifically, the memorandum stated that the agency
expects to allow "some reasonable period of time such as 60 days" for
an H-1B worker to be unemployed before being considered out of legal
status.
[26] Under certain circumstances, BCIS officials are permitted by
regulation to grant visa extensions or authorize classification changes
to nonimmigrants, such as H-1B workers, who are no longer in status at
the time a petition is filed.
[27] We selected these occupations because they were among the top 10
occupations filled by H-1B workers and were likely to have been
affected by the economic downturn. In making comparisons between the
occupations of H-1B beneficiaries and U.S. citizens, we used the CPS
occupational codes. See table 5 for a description of the crosswalk used
to compare occupations from the BCIS database and the CPS.
[28] We assessed the reliability of the CLAIMS 3 LAN data through
interviews with agency officials, electronic data testing, and review
of related documentation.
[29] Annual salary is based on full-time employment for 12 months, even
if the beneficiary actually worked for fewer than 12 months.
[30] See Technical Paper 63RV: Current Population Survey--Design and
Methodology, issued March 2002. Electronic version available at http:/
/www.census.gov/prod/2002pubs/tp63rv.pdf.
[31] We used the March 2002 Supplement data on income on U.S. citizens
for median salary estimates, for the most recent year measured--2001.
[32] See Technical Paper 63RV, page 11-4.
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