Will There Be a Third H-1B Lottery, as 100,000+ Winning Employers Turn Down Visas?

By David North on November 6, 2023

Will the Department of Homeland Security have to run a third H-1B lottery to correct for the largely unreported fact that, this year, more than 100,000 H-1B lottery winners have turned down these offers? It looks somewhere between possible and likely.

Routinely the H-1B process for selecting foreign tech workers involves these factors:

  1. There is a congressional mandate that no more than 85,000 new H-1Bs are to be admitted in a fiscal year;
  2. There are many more applications than the 85,000, many of them duplicates as employers and would-be workers seek to game the system;
  3. DHS announces many more winners than 85,000 to counter the gaming; many of these are not accepted; and
  4. The employers admit (in effect) that they had lied about how many tech workers they, in fact, wanted, causing DHS to run another round of the lottery. The employers do this by rejecting awards of these visas in large numbers.

We have had the second lottery already this summer, as we previously reported, and now it looks like we will have a third.

All of this suggests — loudly — that the industry’s complaints about too few tech workers are a sham, but all of this is so complex and convoluted that the media never reports the real situation: that there is no shortage of these workers, but a continuing industry desire for them because they are less expensive than U.S. workers and more docile than Americans. And all of this is happening amidst many reports of layoffs in the computer-related industries.

This year, we have a much better picture of the process, thanks to the reporting of a pro-H-1B and India-focused website called “Day1CPT”.

That website reports, apparently from DHS sources, that fully 188,400 selected applicants have been offered visas by the government as a result of the first two lotteries, and that more than 100,000 of them have been refused by employers. It says: “Shortfall: There should be a remaining gap of 9,640 slots to reach the 85,000 quota!”

Thus, there is the possibility of a third lottery, as DHS struggles to meet what it regards as both a floor and a ceiling, the 85,000, and it keeps guessing, wrongly, on the extent of phony applications that, when awarded, are rejected.

Comments. There are four possible ways that multiple lotteries can be eliminated, with the government opting for partial use of one of these solutions.

  1. The most obvious way is tackling the definition of the 85,000. Is it a ceiling, an upper limit to the number of visas to be issued? Or is it, as the government now accepts, a goal in which it seeks a number as close to 85,000 new visas as possible?

    Industry wants it to be a goal, so as to maximize the presence of as many H-1Bs as possible. I would prefer that DHS issue 85,000 approvals and not insist on 85,000 accepted approvals.

  2. Another solution, which would also tend to reduce the negative impact of H-1B on salary levels (for both aliens and Americans), would be to run an auction for these slots, with the highest salary offers being first in line. Any refusals to accept the offer would simply mean that the next one in line would get the visa.

    That would make sure that any real shortage would be met and that the nation would get the best-paid (and thus hopefully the most talented) mix of H-1Bs possible. Industry finds this too expensive, and the Biden administration bows to the corporations.

    Either of these proposals would be a single-step procedure. The next two would not.

  3. Another approach, less attractive to those of us interested in protecting American jobs, would be to change the fee schedule to discourage employers from seeking more workers than they really want and thus cluttering up the process.

    Currently, employers pay a nominal $10 non-refundable fee to enter the lottery and pay the real multi-thousands fee for an approved lottery winner only after the visa has been issued and accepted. This could be changed in two ways:

    1. The initial, non-refundable fee for entering the lottery could be set at, say, $10,000, which might discourage over-filing; and
    2. There would be a penalizing fee of $50,000 or $100,000 for every approved application not accepted.

    This would not guarantee against a second or third lottery, but it would make them less likely.

  4. The government has not accepted any of these good ideas but is proposing yet another approach: limiting the number of applications that can be submitted by some of the players.

    One possibility would be to limit the number of applications entered by the employers; another would be to limit the number of applications submitted on behalf of a single alien, and a third would be to impose both limitations.

    If there is to be a choice between limiting actions by employers or by workers, the administration (contrary to its own much-vaunted worker-friendly posture) has opted to give the freedom of choice to the employers. As we reported earlier, the administration is pursuing an approach that will allow employers to continue to file as many applications as they want, valid or inflated, but limit the number of applications filed by would-be H-1B workers. No would-be H-1B worker could enter the process more than once.

    This would limit the number of over-filings, but it would also guarantee that the incoming mix of workers would be less talented than before. My assumption here is that a talented would-be H-1B candidate, say one who graduated with honors from a good university, could gin up more job offers than one who just barely made it to a degree from a lesser institution; but under the new system each would have the same chance in the lottery.

Trust the administration to make the least sensible of choices.

Day1CPT. Returning to an explanation of this set of letters and a number, the title of a website previously cited, this is an organization devoted to foreign student/workers, particularly those from India; “CPT” stands for Curricular Practical Training, one of the subprograms under the subsidized Optional Practical Training (OPT) scheme. The program pays U.S. employers a subsidy to hire recent foreign college grads from U.S. institutions rather than American grads of the same institutions.

Some of these programs grant the subsidy only after a year of undergraduate work; others, notably at the graduate school level, offer legal work with a subsidy from Uncle Sam to their employers, from the first day of school. The website lists such institutions.