The United States Citizenship and Immigration Services (USCIS) has received over two lakh H-1B applications for the season 2019-20, an increase of 10,000 petitions over that received by the agency last fiscal.
The application process started on April 1, 2019. For FY19, the petitions filed were 190,098.
Analysts believe the 5 percent increase in applications this year - after two years of decline - is a telling sign that the Indian IT industry, which is the biggest beneficiary of H-1B visa offered to skilled immigrants, is on a revival mode.
Rogelio Caceres, Co-Founder, LCR Capital Partner, an advisory firm, said, “There is a general increase in hiring activity and that is reflected in H-1B as well.” Caceres explained that there is a 20 percent increase in hiring activity in the IT sector.
According to analysts, this also indicated continued interest in the US and rising demand as the number of projects in the country increased.
High denial rates
However, denial rates for both new applications and extensions are at an all-time high and will continue in the coming year.
According to the National Foundation for American Policy report shared by Caceres, the rejection rate for initial H-1B petitions has increased from 6 percent to 24 percent between FY2015 and FY2018.
Based on data by RedBus2US.com, the USCIS received 172,500 H-1B petitions, up nearly 50,000 over FY2014. The petitions peaked in FY2017 at 2.36 lakh. During this entire period, the cap was set at only 85,000 visas each year for Indian applicants.
After 2017, the application numbers dipped as the Trump administration tightened the visa regulation including increased scrutinisation of H-1B visa, request for additional documentation and rising rejections.
For instance, at least 10 companies that provide professional or IT services to other US companies had denial rates that exceeded 40 percent in Q1FY19 whereas denial rates were between 4 percent and 8 percent in FY15 for the same companies.
“With the applications filed on the rise, it is obvious that rejections will be higher as there is a cap of 85,000 and petitions are in the range of 2 lakh,” Cacares pointed out.
Apart from the rejection of new H-1B applications, nearly 30 percent of petitions for renewal was denied in FY18 compared to 2-3 percent in FY15.
The rejection rate of H-1B extensions are significant and clearly shows the stringent restrictions imposed on immigrant workers, especially Indians in the US, said another expert involved in H-1B visa.
There is also another catch. Under the regular H-1B cap, 65,000 visas are issued and 20,000 are allotted to applicants with masters’ degree. Lottery allotment for the regular cap follows the lottery for applicants with a masters degree.
However, starting this year the process has been reversed with the lottery for regular cap being done before those with masters. This was to increase the probability of a masters degree holder for the H-1B visa. According to a statement by the USCIS, under the new process, there will be 16 percent more chance for the masters' degree holder to be selected for H-1B compared to before. This is because masters degree holders can also apply under the regular cap. However, applicants under the regular cap do not have an alternate option.
Christian Triantaphyllas, Partner - Jackson Walker LLP, said this would result in higher chances for selection of US advanced degree holder in the lottery system.