What is an H1B Visa and Will Proposed Changes Affect Your Business?

What is an H1B Visa and Will Proposed Changes Affect Your Business?

President-elect Donald Trump has suggested changes to H1B visas that could impact some small businesses and their employees.

But if you’re busy running every other aspect of your small business, you probably don’t have time to keep up with all the country’s complex immigration laws. So here’s a simple explanation of the H1B visa program and what proposed changes could mean for small businesses.

What is an H1B Visa?

An H1B visa is a program for businesses hiring foreign workers for specific positions in the U.S. But it’s a bit more complicated than that.

Immigration Attorney Paul Goldstein explained in an email to Small Business Trends, “The H 1B visa are non-immigrant visas for foreign workers in ‘specialty occupations.’ While there is no set definition for what … a ‘specialty occupation’ [is], the position must meet one of the following criteria.”

Goldstein explains that:

  • The position must require a baccalaureate or higher degree or its equivalent
  • Or it must have a degree requirement that is common in the industry for similar positions, or be a position that is so specialized that it can only be performed by a person with a degree
  • Or it must be a position for which the employer normally requires a degree or equivalent
  • Or the nature of the job or its duties are so complex that the knowledge required to perform those duties would normally be associated with a baccalaureate or higher degree.

Essentially, the job should be something that requires or would normally require a college degree.

What Types of Employees Do H1B Visas Cover?

Essentially, any business that hires people for positions that require a college degree could apply for H1B visas.

However, there are certain types of businesses that tend to use them more than others. For instance, tech companies like IBM tend to apply for a good portion of the allotted visas.

In addition, certain physicians and non-profit and government researchers can also fit within the program. But some of those positions aren’t restricted by the annual cap on H1B visas.

What Might Changes to H1B Visas Mean for Businesses?

President-elect Trump’s suggested changes involve investigating “abuse” of H1B and other visas.

Currently, there is a cap for H1B visa applicants each year.

Goldstein says, “Congress has placed a cap on the number of visas that will be issued for a fiscal year starting on October 1st at 65,000. There are an additional 20,000 visas for foreign workers who have earned a master’s degree or higher from a United States institution of higher learning. The USCIS (United States Citizenship and Immigration Services) will accept H1B petitions for the fiscal year beginning April 1st with employment start date of October 1st.”

However, there aren’t any other specific changes that are already in the works as far as H1B visas are concerned. There may very well be new restrictions in the coming years, potentially including a smaller cap or increased fees for applicants. But Goldstein says it’s too early to anticipate what those changes might actually entail. However, applying as early as possible is the best route for businesses looking to utilize the program.

Goldstein says, “As the incoming administration under President- Elect Trump has promised changes in the immigration laws, we would have to wait and see what is proposed for H1B visas and voted on by Congress. I can tell you that if a business wants to file a H1B they should start early to have the submission ready to be filed by April 1st.”

Statue of Liberty Photo via Shutterstock 10 Comments ▼

Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

10 Reactions
  1. Lets be perfectly clear. H1B visas are used by many of this countrys largest corporations to avoid paying *American* workers what they deserve by importing foreign workers from coutries such as India, Pakistan, and China.

    With the loss of manufacturing jobs to China, we were told to prepare for the new job market with advanced degrees in computer science and technology. The H1B program now forces us to train those who will take our jobs from us by being subsidized by us to work for less.

    Does anyone wonder why it is that Trump won when HRC and the Clinton Foundation were successfully lobbied by the giant foreign and domestic corporations to continue/expand the H1B program?

    We are paying attention DJT!

    • Ah we get all sorts of protectionist/nationalist views without people understanding how IT industry or the visa program works. First of all in technology who ever is employable and has the necessary tech skills is employed. Most people who complain are the people who dont keep themselves upto date with changing tech. and then are replaced.
      Yes some companies misuse and those need to be checked. but from a visa perspective when a company needs a foriegn worker they have to post the job for a definite time and when they dont find they have to prove the individual will get a labor certification which is minimum salary required for the category for the location. This varies from 60-100k so no one is paid below that.

      • The real problem is not h1bs here. It is a fallacy that “employees with cheap wages from other countries” is the reason why citizens are losing jobs. The problem is off-shoring – outsourcing. Yes, some companies are using it as a means for some one to enter here, get trained and then outsource jobs to India/Philippines/China/lot of other countries. Yeah many vendors do that. The real issue is not people coming here.. The real issue the businesses allowing that off-shoring to happen. Of course we want people to come here – bright minds to make it better. People coming here to work and wanting to live here are not replacing American workers for cheaper wages.. That is a total fallacy. But companies using this visa and then outsourcing jobs is how – the replacement is happening and yes, that needs to be put in check. Of course free trade argument applies, but if we really want to get into protectionism – that is the real problem. My view is: you are not going to stop jobs leaking to other countries by being hard on h1b or stopping h1b. Businesses that do that practice will find other ways.

      • I agree the changes were raised coz of the fraud by Indian contractors faking qualifications and in some cases the applications for HB1 visas. Some have been arrested but there are many more out there inviting new applicants from India who’re not qualified and hence accept less pay. Most adverts for IT jobs are now controlled by crooked Indians and hence the rapid fraud and favoritism by Indians in hiring process. Our company now hires Interns from local Universities and they do a good job. The crisis of IT jobs is exaggerated by these Indian companies.

  2. H1-B Visas regulate the *location* where the work occurs – but eliminating or reducing them won’t create any new American jobs because IT jobs can be done anywhere in the world. 65,000 is a pittance – there are already way more than one million IT workers overseas doing work for American companies, utilities, governments, etc. One thing that is good about H1-B’s is that those workers spend their money here, where they earn it. So getting rid of H1-B’s will hurt schools and tax revenues with the loss of these high paid employees. But anyone in IT who thinks they can get off easy on job competition by tinkering with H1-B’s is in denial. We compete in a global marketplace and nothing Trump does can change that.

    • Exactly.
      The other thing that has happened is that with time tech expertise as well as new products are developed in places like india based on costs and easier/cheaper cost to train people. So now any software you are using here in us are being built and supported in India. Projects may require people onsite on us soil to implement such projects and hence require h1s to bring expertise here for support or customization. If we do stop H1s the option remaining would be to fly business people to places like india for a few months and get things implemented there. That will further reduce the money being spent and taxes being paid here. With cloud technologies it will further reduce the need for onsite tech jobs which will lead to more outsourcing.
      Industry does pay you well if you are the right person for the job (unless ure into a lower function in IT such as maintainence /testing) then your job will definitely will go to the lowest cost or outsourced. Even most people i know on h1s working for outsourcing firms have salary in the range for 80-120k. I guess as they cant control illegal immigration the soft target is legal immigration.

  3. My only comment is how the H1B visas have impacted me since I entered the technology workforce back in the 80’s. I’ve been out-sourced, off-shored over 10+ times in my career. The last one, with IBM left me unemployed and in a house, due to the market declines, owing double what the house was worth according to our friends in government and US Banks. H1B visa holders and top executive leaders whose bonuses are sickening will get NO sympathy from me.

  4. The core issue is that the idea of going after best deal or best discounted price is ingrained in our core behavior. No one will skip Walmart or Amazon.com even if another nearby shop sells same product made in USA for 30% more markup in price. Companies looking for cheap labor will always manage to say yes to anyone who is willing to help them get access to that labor no matter where it resides. So it is difficult to contain the system once it has evolved very well over the years. It has taken over 15+ years for Congress to wake up to the reality of how H1/L1 visa are being “misused” (an irony since all visas are actually used only after explicit approval by DOL and USCIS — which is under control of the President per policies laid by the Congress). The main issue is where a labor certification is applied for, regulations require such a certification to be posted locally at proposed work site and there are only few weeks time given for anyone to challenge it. Its statistically impossible for anyone to go shopping indefinitely for lowest price near Walmart. Similarly unemployed IT workers have no practical means to detect such notices posted on paper notice boards ! DOL cannot decline a labor certification request unless they see a qualified US based worker applying for it. Hence, the loophole. Even if a web based system is developed to post these jobs, it won’t be long before companies will figure a way to extract a commitment from the worker who applies against a H1 offer to actually follow up and stay committed with the job like visa worker would have. It is not difficult for companies to use past behavior of how an IT worker has applied and then refused to take up qualified jobs as a criteria to not select him for any job in future. That is how interview scrutiny occurs in IT market – show one mistake from past in resume and it hurts big time from a reliablity / trust perception. Hence, there is no legislative way to “regulate” this IT work distribution. It runs on a self-correction basis and a large pool of cheap talented labor settled in Asia and Europe means scale of economy is simply unbeatable in near future. It takes 20+ years for IT pros to develop their ideas and interests well. Frequent disruptions in US job market has robbed such pros of stability and peace of mind and that is very unfortunate. But will Congress switch away from free market and to controlled market for just sake of H1/L1 visa misuse perceptions ?

  5. Do not forget that foreign doctors use H1B visas to treat underserved areas. Most of these positions have been posted or listed for 1-2 years and no American physician has been hired. There are many underserved areas because there is a deficit of physicians. If they cancel the H1B visa, we will have a big health problem.