Rising rejection rates for initial temporary work permits and renewals, combined with proposed drastic fee increases, new electronic registration procedures and huge backlogs at U.S. immigration services, are causing grief for employers relying on the programs for highly skilled workers.

More companies are even resorting to litigation to resolve disputes with the U.S. Citizenship and Immigration Services, which is part of the U.S. Department of Homeland Security, immigration lawyers said.

"People who have worked in a profession for a dozen years are being told they are not in specialty occupations, and they often have to leave the United States," said Eric Bord, a business immigration partner at Morgan, Lewis & Bockius in Washington, D.C.

Business immigration lawyers said they increasingly are working with in-house counsel and the companies' human resources departments to find solutions to these mounting problems, which can involve utilizing different work visa programs or challenging USCIS decisions in court.

The United States issues an annual limit of 65,000 H-1B temporary non-immigrant work visas for each fiscal year. The first 20,000 petitions filed for applicants with a U.S. master's degree or higher are exempt from the cap. Also, H-1B applicants employed by higher education institutions or nonprofit or government research groups aren't subject to the cap. Some H-1B extensions requests also aren't subject to the cap, according to the federal government. But the USCIS received 201,011 cap-subject petitions for the slots, according to an agency spokesman.

According to the nonprofit, nonpartisan group the National Foundation for American Policy, based in Arlington, Virginia, in the third quarter of 2019 from fiscal year 2015, the denial rate for new H-1B petitions soared to 24% from 6%. Prior to 2010, the denial rate for initial petitions had not exceeded 8%, based on their analysis of data from the USCIS Employer Data Hub.

USCIS officials also denied 12% of H-1B petitions for continuing employment through the third quarter of 2019, up from 3% in fiscal year 2015, the group said. 

Denial rates for new petitions at specific employers also have soared, with Amazon.com Inc., for example, seeing its denial rate increase to 6% in 2019 from 1% in 2015. Microsoft Corp.'s denial rate for initial employment H-1B visas went to 8% in fiscal year 2019 from 1% in 2015.

By contrast, some outsourcing companies and consulting firms had denial rates of as high as 63% for initial applications, and as high as 32% for continuing ones, according to the study. Emailed requests for comment to Amazon, Microsoft and Alphabet Inc., parent company of Google, weren't returned. 

Additionally, there is a green card backlog of about 800,000 applicants seeking permanent residency status, with processing delays extending years.

The new policies were implemented under the executive order signed by President Donald Trump, the "Buy American, Hire American" order signed in April 2017, immigration lawyers said.

Recent notices of proposed rulemaking at the Department of Homeland Security, published in the Federal Register, have drawn tens of thousands of comments not only from immigration and refugee advocacy groups but from employers of highly specialized workers and their trade associations. They are concerned about the proposed fee increases of as much as 83% for naturalization applications.

The federal government said in the notice that the "weighted average increase" of all the new fees is 21%, and that the increases are necessary to recover the full operating costs of providing services. 

Punam Singh Rogers, an immigration partner in Boston at Constangy, Brooks, Smith & Prophete, said: "This is a burden for U.S. employers, because many of the employment petitions [fees] like H-1B and L-1, and other petitions with Australia are all going up by 53%. Green card permits also going up an average of 79%." 

The total cost for an employer sponsoring an H-1B petition could rise to as much a $2,500 per employee, Rogers said, not counting an extra fee to expedite the petition of $1,440, which Rogers calls an "extortion fee" because it frequently is required because of delays.

"Corporate counsel are going to have to take this into account for budgeting purposes. We don't know how much it will go up, or if all these fees will go up but it does look like there will be significant changes," she said.

Lisa Spiegel, head of the immigration practice group at Duane Morris' in its San Francisco office, said, "I am very concerned about my bigger companies who want to transfer people [from abroad] but it is the startups and small companies that are supposed to be the heart of America and I don't know how they are going to afford this."

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Tougher Eligibility Requirements

At the same time, immigration lawyers say they're dismayed by tougher eligibility requirements. For instance, USCIS recently ended deference to prior decision-making, meaning that each adjudicator must view each extension petition afresh. The new guidance tells adjudicators not to "feel constrained in issuing requests for evidence."

The USCIS also now requires interviews for each employment-based permanent residency  "green card" application, increasing the time needed to process, she said.

"How can businesses feel confident that they can continue to do business if they don't know they are going to get approval even if they had it before?" Spiegel said. 

Spiegel told of a recent example of an engineer working on a state government project in California's San Francisco Bay area who was unable to get an extension on his H-1B temporary work petitions when the project was transferred to another company. The USCIS denied the request, saying his was no longer a specialty application, even though it was the same person, educational degree and same job transferred to a different employer. The company was in danger of losing the contract without the employee. 

"It was devastating. This is a small employer and the employer said, 'This is killing me. This is the only person I have qualified for this role. He was a great person for me. Why is the immigration service keeping him from coming? They already approved him once,'" Spiegel said. 

A lead developer at an Atlanta company, an Indian national, was unable to get his H-1B petition extended this time after a decade of extensions when USCIS decided that he wasn't eligible. The firm was able to resolve the issue by having him return to India for the same company and reapply under a different program, L-1, for company transferees, she said.

Immigration attorneys and their client companies are also anxious about a new pre-registration procedure for H-1B petitions slated to start this spring for fiscal year 2021 under 2019 H-1B regulations. Some worry the new system could overload the system by making it easier to apply, thus increasing competition in the lottery. 

The filing period had been in the first five days of the fiscal year, and if by the fifth day there were more applications than the number of petitions allotted for that year, all the excess applications would go into a random lottery selection process. But a new process involving electronic pre-registration was introduced last year and will take effect for the first time this spring, said Sharvari Dalal-Dheini at the American Immigration Lawyers Association in Washington, D.C.

Under the new procedure, the employers will pay $10 and fill out an online registration during a period that runs from March 1 to March 20. If there are more applications than slots as there usually are, there will be a random lottery run sometime before March 31, so selected registrants can begin filing potentially as soon as April 1. They then will have at least 90 days to submit the full petition by mail with all the necessary fees. Previously, petitioners submitted the full petition in the first five business days of April and ones that were not selected in the lottery were returned by mail. Lawyers are concerned that a surge in applications might result, increasing competition in the lottery.

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More Lawsuits

Employers fed up with the delays and obstacles are filing more and more lawsuits against USCIS and the Department of Homeland Security as a last resort. Rogers said filing lawsuits "is becoming the only viable option for some clients because CIS is redefining the H-1B regulations and what it means to be a specialty occupation without new legislation or formal rulemaking. Therefore the only way to combat this is to litigate it."

Morgan Lewis, for example, is representing LMI Aerospace Inc. of St. Charles, Missouri, a defense contractor, in a lawsuit filed earlier in December in federal district court in Washington, D.C., against USCIS, its officers and the Department of Homeland Security, for denying an H-1B renewal for a supply chain analyst. The USCIS decided in that case that the petitioner, who had obtained his master's degree in industrial engineering in the United States and was already working for the company, did not qualify for specialty worker status as he had before, even after the company supplied additional documentation as evidence.

Bord, who is representing LMI in the matter, said changing adjudication standards have led a growing number of companies like LMI and others to file lawsuits to "reverse arbitrary denials."

"The agency seems to be taking a rather expansive view of what occupations are no longer eligible for H1-B consideration and they include engineering professions, technology professions and others," Bord said.

"Renewals were not taken for granted but there was some predictability in the process. The no- deference memo destroys that predictability, especially with new adjudication standards that are much less predictive and sometimes applied arbitrarily," he said.

Bord and other lawyers said the lawsuits are often successful in getting the petitions granted.  "That they reopen and reverse is an indication I believe that they believe their decision is not supported by the facts or by the law," he said.

U.S. Citizenship and Immigration Services spokesman Matthew Bourke said in an emailed statement: "USCIS officers evaluate each H-1B petition on a case-by-case basis to determine eligibility for the benefit requested, and may request further evidence and issue subsequent denials when the petitioner provides insufficient evidence to establish eligibility based on the preponderance of the evidence standard. The agency adjudicates all petitions, applications, and requests fairly, efficiently, and effectively to determine if they meet all standards required under relevant laws and regulations. The petitioner—not the government—has the burden to show that the petition meets the requirements for eligibility under the applicable statute. 

"The petitioner must establish, among other things, that the beneficiary will actually be employed in a specialty occupation and that the beneficiary is qualified for that specialty occupation. The fact that a petition was previously approved does not relieve the petitioner of its burden of proof in subsequent petitions. "

Bourke said the agency set records for the number of H-1B petitions received, approved and completed in fiscal year 2019 while still implementing the executive order, "improving vetting procedures, cracking down on fraud and ensuring more beneficiaries have advanced degrees." 

Almost 74% of H-1B petitioners in fiscal year 2018 hailed from India and 11.2% from the People's Republic of China. Canada and South Korea had the third- and fourth-highest share of petitioners with 1.1% each.

While the proposed rule on fees received 30,000 public comments, USCIS received 266,077 comments on the Final Rule on Public Charge Ground of Inadmissibility.

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