High-Tech H-1B Layoffs Need Not Result in a Trip Home

The made-up OPT program to the rescue

By David North on January 30, 2023

We have been reading about the extensive layoffs in high-tech industries; we have heard much gnashing of teeth about upsetting families and causing many H-1Bs to return, usually to India. We have read of multitudinous efforts by the Department of Homeland Security to ease the impact of forced departures for scores of thousands of H-1B workers.

The press, of course, bemoans the bad news for these alien families.

What is now clear, however, is that the U.S. immigration system has an existing solution to any potential relocation problem — no H-1B has to leave the country, and neither our government nor the Indian press has figured it out, or if they have, they are keeping it a secret.

That’s right — no lay-off of an H-1B or L-1 employee needs to lead to a flight home; people may have to make somewhat different arrangements, incomes may drop, but no one is being forced to leave.

The so-far hidden alternative to being forced to emigrate carries with it the letters OPT, standing for the Optional Practical Training program. It is available to all aliens now in the U.S. as either H-1Bs (high-tech workers) or L-1s (international corporate executives).

The terms are not quite so attractive as staying in H-1B or L-1 status, but there are no mandatory departures.

And best of all — for the aliens if not the rest of it — it is subsidized by the federal government.

What we are describing is a little-known program that saves employers 8 percent of payroll if they hire aliens have who graduated recently from a U.S. college or university, or who are currently enrolled in such an institution. No such subsidy goes to citizen college grads.

I was reminded of the potentially supportive role of the OPT program for the laid-off foreign workers by a detailed article in an Indian news site, Mint, which carried this headline: “‘Laid off L-1 visa holders worse off than H-1B’: 4 expert tips on what they should do to stay in the US”.

Quoting immigration lawyer Robert Webber, Mint writes that L-1s, who did not have to go through the H-1B lottery in the past, will probably have to do so if they lose their L-1 status. What he might have added is that the L-1 visa, for employees of international firms, is an easier way to get a high-tech job in the States than the H-1B, as there are no ceilings and no lotteries.

Then, in a not-quite-acknowledged bow to Indian nepotism, he suggested to the job-losing L-1s: “Quick find an employer (cousin’s consulting firm?) to put you in the H-1B cap lottery.”

Webber also suggested that those losing jobs check out the non-profit sector, where H-1Bs are excused from the ceilings, and to explore the possibility of becoming a student again by seeking an I-20 form for an F student visa.

The attorney did not spell out the universal availability of this approach, in which the alien will seek a night-time or weekend master’s degree, perhaps a second or third one. He will not need a demanding school nor worry about any ceilings or government fees and may take courses that he has already taken before at some other institution. He can then get a federally subsidized job in the Optional Practical Training program for the duration of his schooling and for three years thereafter.

This alternative may not be as attractive as getting one’s H-1B visa renewed — there will be tuition to pay — but it is open to all laid-off aliens with no ceilings or caps. No one has pointed this out until now.

And employers will be interested because there are no labor standards in the OPT program, and the employer gets an 8 percent discount. The discount, never available to employers of citizen workers, comes because the employer of the OPT worker does not have to pay his share of the payroll taxes. Since these taxes support the Social Security, Medicare, and federal unemployment insurance programs, the OPT employer is being subsidized by the nation’s aging, sick, and unemployed workers — again something the press, whether here or in India, never mentions. (H-2B employers do pay these taxes.)

It should be noted that all foreign workers who are laid off from H-1B and L-1 jobs are eligible for this federally subsidized program. All of them.

As to some of the nuances of these layoffs, Mint reminds us that when an H-1B worker loses his status in the labor market, so does the spouse; the same applies to L-1 workers and their spouses.

You can be sure that the sad fate of the alien spouses will be reported again and again, but not much will be written about the federally subsidized solution offered to them by the OPT program, a subsidy that is not offered to laid-off citizen high-tech workers.

These are the winners and losers of the lay-offs-plus-OPT-hiring scenario:

Big Winners — The employers of foreign workers, whose overall labor costs will be reduced by subsidies and a loose labor market, and who will not need to pay steep H-1B fees to DHS.

Winners — U.S. higher education, including some dubious institutions that will get more students and more tuition.

Partial Winners — Foreign workers who will lose income, but not their ability to stay in the U.S.

Losers — U.S. high-tech workers who will be seeking jobs in an applicant-stuffed labor market where wages are falling.

Losers — The largely citizen population that depends on programs like Social Security and Medicare.

Losers — Some female foreign workers who as new F-2 visa holders (spouses of foreign students) will not be allowed to work, unless they follow the OPT route themselves.

Yes, once again, employers first and ladies last.