Tech Companies Investigated for Visa Fraud as American Workers Are Replaced

What’s happening? The Biden administration has found evidence that many smaller tech companies are colluding to increase their applicants’ chances of being chosen in the H-1B visa lottery. H-1B visas let companies hire highly skilled or educated foreign employees, often international students. It’s one of the few temporary visas that allow recipients to eventually become permanent U.S. residents or citizens and is popular in the tech industry.

Why this matters: Many corporations use these H-1B visas to replace American workers. For example, in 2014, American employees at Disney were required to train their immigrant H-1B replacements before getting fired. Last month, an analysis showed that some of America’s top tech corporations have been laying off Americans as they hire more H-1B employees, which are paid significantly less.

The details: This year, the H-1B lottery saw a record number of entries at 781,000, but over half of those are duplicates, the same names submitted by multiple companies. It’s legal for companies to submit the same workers if they have genuine job offers for them, but it’s not legal for them to then contract those workers out to other companies or fire them so that they can work for others. Some companies under investigation may have been created for the sole purpose of submitting lottery entries.

Why now? Under changes implemented by the Trump administration in 2020 intended to benefit small businesses and increase their chances of getting H-1B visas, entry fees are lower, and companies don’t have to pay fees to verify their application’s validity until after the application has been selected. It seems the change created a loophole that incentivizes duplicate applications.