A Great H-1B Reform Idea: Abolish the Role of Labor Broker

By David North on January 10, 2024

One of the reasons why the H-1B program for temporary tech workers is so successful in kicking U.S. tech workers out of jobs is the middle-man role played by labor brokerage firms, often based in south India. All too many slots in the program are allocated to labor broker firms like Infosys and Tata; they rent out Indian H-1B workers to other firms and make huge sums doing so.

So I welcome the suggestion of activist, lawyer, and CIS Fellow John Miano that only direct employers be allowed to use the H-1B program, or as he puts it:

It is time for DHS to define the employer-employee relationship for H-1B visas so that it reflects the historical norm that an employee works directly for an employer — not a third party.

While some U.S. employers needing people with computer skills hire them directly through the H-1B program, many others get the IT talent they say they need by renting workers from the middleman agencies. These firms need not have any expertise about the H-1B program, do not have to have contacts with overseas workers, and need not go through the complexities of dealing with the Departments of State, Labor, and Homeland Security. They simply call up a labor broker, pay a substantial fee to the outfit, and get the workers they say they need in the simplest possible way.

Some firms hire this talent directly and also hire indirectly; usually the less-well-paid people are employed in this way. If the labor brokers were not around, the chances are fewer nonimmigrant workers would get these jobs, and more of them would go to America’s own tech workers, people — sad to say — who do not seem to organize in their own interest.

Meanwhile the DHS agency handling (or mishandling) this program, USCIS, had asked for comments on its own proposals to change (ever so slightly) the H-1B program. Miano responded on behalf of the Immigration Reform Law Institute, and IRLI issued a press release on his comments, but the release itself did not mention the idea of abolishing the labor brokers’ role in the program, though the text of Miano’s comments did.

Miano also suggested that, given the amount of fraud in the program, potential H-1B workers should be identified with photos and passport numbers at every step of the way to prevent inappropriate substitutions by labor brokers and other employers. This would also be useful in the sense of making the H-1B filing process a little more complex than it already is and thus discouraging its overuse.

In another move that will — appropriately — make the H-1B program slightly less attractive to employers, an Indian publication, the Hindustan Times, predicts that our government will raise the initial fee for seeking H-1B workers by 2,050 percent in 2024.

That sounds unreasonable on its face until you realize that the fee currently is all of $10!

Were that fee to advance to the proposed $215 and if it were to remain non-refundable, as it is now, it might discourage some H-1B seekers. That fee is one of several (larger ones) that go with this program. All should be much steeper.

For a long, comprehensive treatment of all the things that should be done with this program, see the comments of my colleague Elizabeth Jacobs, here.