H-1B Hiring: The Hidden Costs

By John Hazard  |  Print this article Print

Everyone knows that it's difficult to find qualified talent these days. And political considerations have made it even harder to hire H-1B employees, putting small IT solution providers at a disadvantage.

For starters, the fees alone are expensive and they keep rising everytime congress wants to appear tough on foreign labor, said Thiele. The fee alone is between $2,000 and $3,000 depending on the particulars of the application. But the process is complex and labor-intensive, most employers opt to file through an immigration attorney, which generally adds another $1,000 to $3,000 to the costs, according to Thiele and other immigration attorneys. "For an employer, you're making a choice between time away from your business to file the application and maybe do it wrong, or paying someone to do it for you right," Salcedo said.

When you consider filing fees, attorney fees and other factors, the notion that H-1B employees are cheaper or undercutting wages is completely bogus, Salcedo said. "In addition to their salary, which the USCIS must approve as average or higher for the job title and region, you're paying their fees, plus the legals fees, plus, we're often paying to relocate them. So H-1B employees are typically much more expensive."

Unrealistic standards

Small businesses are not scale versions of big businesses, with every process, function and role represented in miniature, but the USCIS doesn't understand that, said Thiele.

The H-1B visa process begins with what is known as a "Labor Condition Application," which allows the agency to determine that the employee in question possesses special skills that can't easily be filled by  a U.S.-based employee, that the wage to be paid is equal to or greater than the average for the position in the region and that the employee's sole role at the company will be to perform those specialized tasks for which they were hired. The application invites the agency to meticulously comb your business to make the determination and nothing about the process is set up to allow agents to consider the size of the company, Thiele said.

"They fail to recognize how the modern workplace operates," said Douglas M. Lightman, an immigration attorney as well as founder and principal attorney at the Lightman Law Firm, New York, NY.

For instance, the USCIS assumes that every business, regardless of size or industry, must perform certain tasks and fill certain roles. It assumes that a certain percentage of employee time must be spent performing "non-qualifying duties": photocopies, sending e-mails, filing time sheets, answering phones, ordering supplies, etc. When they consider the application of a three-person company, they want to know who among those three handles those tasks so that the H-1B will be focused solely on their specialized skill.

"They don't recognize that those tasks are simplified by technology and not every company needs an administrative person," Lightman said. "It doesn't take into account the modern workplace or the technology industry. For instance, I recall an application for a software maker where the agency wanted proof of a warehouse space to store the software inventory. I've seen that several times. It's ridiculous. It's irrelevant to the nature of the application."

Ironically, the reduced tension on the quota system has made this scrutiny worse, said Irina Plumlee, an immigration attorney in the Dallas office of Gardere Wynne Sewell.

"With far fewer visa requests being made and those that are submitted come in at a slower rate, it has enabled a far more comprehensive review at the administrative level," she said. "With more time on their hands, the agents are taking a far more critical review of each application and unfortunately small companies are the ones who suffer more under intense scrutiny of their operations, finances, workforce, etc."