Moneycontrol
Apr 18, 2017 03:00 PM IST | Source: Moneycontrol.com

Donald Trump likely to end H1-B visa lottery program, make it merit based

Each year on April 1, a fresh cap for H-1B visa applications is opened by the USCIS. The applications are randomly selected. It is referred to as the 'H-1B lottery'

Donald Trump likely to end H1-B visa lottery program, make it merit based
Harsimran Julka

Moneycontrol News

The H-1B lottery system is likely to end this year and a new program with an emphasis on master’s degrees and high skills is likely to be enforced, the White House indicated in an elaborate press briefing this week.

“We're going to switch away from a random lottery system in which it's weighted toward the lowest wage workers towards a system that prioritizes higher-skilled, higher-paid workers, which would make it much more difficult to use it to replace American workers,” the White House said in a press briefing, minutes of which are available here.

Each year on April 1, a fresh cap for H-1B visa applications is opened by the US Citizenship and Immigration Services (USCIS). The applications are randomly selected. It is referred to as the 'H-1B lottery'.

With the H-1B program expected to become more restrictive, only 199,000 applications were received by the USCIS for the 2018 intake compared to 236,000 received last year.

The Trump administration targeted companies such as Infosys and TCS in its briefing indicating that the H-1B lottery system designed by previous administrations was prone to misuse. The White House also indicated that the lottery system disadvantages American workers.

“Top recipients of the H-1B visa are companies like Tata, Infosys, Cognizant -- they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas,” a senior US administration official said.

“Those three companies are companies that have an average wage for H1-B visas between USD 60,000 and USD 65,000.  By contrast, the median Silicon Valley software engineer’s wage is probably around USD 150,000,” the White House added. The official later clarified that it was the program rules that made it easy for misuse.

The USCIS is also likely to put an emphasis on master’s degree holders who have an allocation of just about 20,000 slots in addition to the 65,000 annual H-1B visa quota.

“Right now the lottery system disadvantages master's degree holders. There are ways that you could adjust the lottery system to give master's degree holders a better chance of getting H1Bs relative to bachelor's degree holders,” the White House said indicating that Trump may sign a legislative action.

President Donald Trump is scheduled this week to travel to Wisconsin, the home state of US House of Representatives Speaker Paul Ryan, to sign an executive order which is likely to amend the H-1B rules.

The amendment to H-1B rules is likely to increase offshoring to cheaper destinations as tech outsourcing companies will look to protect their profit margins. It is likely to create more jobs in places such as East Europe, India and the Philippines which have become global outsourcing hubs.

Also read: Trump amends H1B rules, entry level techies to be hit hardest
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