The H-1B visa program has long been a focal point of U.S. immigration policy, serving as a critical mechanism for attracting highly skilled foreign workers, particularly in the technology and healthcare sectors. Established under the Immigration Act of 1990, the program allows U.S. employers to hire foreign workers in specialty occupations requiring advanced knowledge and expertise.
However, the program has faced significant scrutiny over the years, with debates centering on issues such as labor market displacement, visa fraud, employer exploitation, and national security concerns.
Scholars such as Shikha Dalmia, Vivek Wadhwa, and Ron Hira have extensively analyzed the implications of the H-1B visa on the U.S. workforce, labor rights, and immigration policy. This paper critically examines the legal controversies surrounding the H-1B program, recent policy changes, and proposed reforms to address its shortcomings.
Legal Framework and Eligibility Criteria
The H-1B visa program is governed by the Immigration and Nationality Act (INA) § 101(a)(15)(H), which outlines the requirements for foreign workers in specialty occupations. To qualify for an H-1B visa, an applicant must possess at least a bachelor’s degree or its equivalent in a field related to the job being offered. The employer must demonstrate that the job requires specialized knowledge and pay the prevailing wage as determined by the U.S. Department of Labor (DOL).
The program is capped annually at 85,000 visas, and 20,000 of those reserved for beneficiaries who have earned advance degrees from United States institutions. The process begins with a Labor Condition Application filed with the DOL, followed by a petition filed with the U.S. Citizenship and Immigration Services (USCIS). Nonetheless, the program has been criticized for being used by employers to cut labor costs and displace workers who are American citizens.
Legal Controversies Surrounding the H-1B Program
One of the most contentious legal issues affecting the H-1B program relates to wage suppression and labor market displacement. Ron Hira, a political scientist specializing in labor and immigration policy, has written extensively about how companies are using the H-1B program to displace domestic workers with lower-paid foreign employees.
In many cases, American workers are required to train their H-1B replacements before being laid off, a practice that has raised ethical and legal concerns. The case of Southern California Edison, where hundreds of American IT workers were replaced by H-1B employees hired by outsourcing firms Tata Consultancy Services (TCS) and Infosys, highlights this issue.
The wage levels set for H-1B workers have also been a subject of legal scrutiny. The DOL classifies H-1B wages into four tiers based on experience, but critics argue that most H-1B hires are concentrated at the lower wage levels, allowing companies to underpay them compared to U.S. workers. Shikha Dalmia, a senior analyst at the Reason Foundation, has noted that the prevailing wage system is flawed, as it enables employers to justify salaries significantly below market rates.
The most serious controversy remains the cases of visa fraud and abuse by outsourcing firms. Several lawsuits and federal investigations have revealed that the staffing firms use the H-1B system by bringing foreign workers on contract rather than for full-time employment in specialty occupations. The Department of Justice (DOJ) and the Department of Homeland Security (DHS) have pursued multiple cases against Indian IT firms such as Infosys and Cognizant, which were found guilty of visa fraud and misrepresenting job roles.
The “Buy American, Hire American” executive order, issued by President Donald Trump in 2017, aimed to deal with these problems by tightening scrutiny on H-1B petitions and compounding regulations. This had led to intensified denial rates and legal suit fights from tech giants such as Google, Microsoft, and Apple, which are dependent on H-1B workers for their workforce. The tech industry has consistently argued that restrictive visa policies harm American innovation and global competitiveness.
Policy Proposals and Legislative Reforms
Given the persistent legal and economic concerns surrounding the H-1B program, policymakers and scholars have proposed various reforms to balance the needs of employers, foreign workers, and the domestic labor market.
One of the most prominent proposals is the H-1B and L-1 Visa Reform Act, introduced by Senators Dick Durbin and Chuck Grassley, which seeks to eliminate abuses by outsourcing firms, increase wage requirements, and ensure that H-1B jobs are offered to U.S. workers before being filled by foreign employees.
Another policy approach focuses on increasing the wage threshold for H-1B workers to align with market rates. Ron Hira and other labor economists argue that setting higher salary floors would prevent companies from using H-1B workers as a low-cost alternative to domestic employees. This proposal aligns with President Biden’s 2021 executive order to review employment-based visa programs and improve labor market protections.
Tech industry leaders, including Mark Zuckerberg and Sundar Pichai, have advocated for expanding the H-1B visa cap to accommodate more high-skilled workers, particularly in STEM fields. Their argument is that restrictive caps force talented foreign graduates from U.S. universities to leave the country, benefiting competitor nations such as Canada and Australia, which have more immigrant-friendly policies.
Some legal scholars have also suggested shifting the H-1B selection process from a lottery system to a merit-based model, prioritizing applicants with higher salaries, advanced degrees, and critical skills. Vivek Wadhwa, a Silicon Valley entrepreneur and academic, supports this approach, arguing that it would attract the best and brightest while discouraging visa abuse by staffing firms.
The H-1B visa program remains one of the most contentious aspects of U.S. immigration policy, with legal challenges ranging from wage suppression and labor market displacement to visa fraud and employer exploitation. While the program plays a crucial role in filling high-skilled labor shortages, its shortcomings necessitate comprehensive reform.
Scholars such as Ron Hira, Shikha Dalmia, and Vivek Wadhwa have emphasized the need for a balanced approach that prevents abuse while ensuring that the U.S. remains competitive in attracting global talent. Legislative proposals such as the H-1B and L-1 Visa Reform Act, alongside wage adjustments and a merit-based selection system, offer potential solutions to the program’s deficiencies.
As the debate about immigration policy goes on, finding a middle ground that upholds economic interests, labor rights, and legal integrity in the administration of the H-1B visa program will be crucial.
Written By –
Himanshu Mishra – Practising Advocate Rajasthan High Court
