While Elon Musk, Senator Bernie Sanders and seemingly most of the internet have been arguing about the H-1B visa program, which allows college-educated people from other countries to immigrate to the United States for work, with the original goal of filling key talent needs, U.S. employers are pursuing different paths. Many have started hiring remote employees based in other countries to bypass the process.
It’s happening “all the time,” Kathleen Campbell Walker, partner and immigration practice group chair at the law firm Dickinson Wright, told Newsweek. Employers are pursuing alternate paths to visas in large part due to the administrative burdens and risk of dealing with existing programs.
“I only go into H-1B when I have no choice, because it’s costly, it’s uncertain as far as the lottery, and it is the most highly regulated option that I have to present to an employer to choose from,” Walker said.
This growing trend speaks to the existing challenges and limitations of the current visa programs, which carry significant administrative and financial costs. A 2024 survey from Envoy Global, an employment immigration services provider, found that 83 percent of employers hired one or more employees outside of the country for roles initially intended to be based in the United States.
Some argue that companies using the H-1B visa are using underpaid immigrant labor to undercut the salaries of highly skilled domestic workers, and that given the small percentage of companies who utilize the H-1B program, it is not very accessible for most employers in the U.S., and therefore only benefits the country’s largest employers.
With a cap of 85,000, but nearly five times as many exceptions approved annually, the H1-B program averaged about 585,000 recipients in 2018-2019. After a COVID-related dip, it rose back to 410,000 recipients in 2022 and more than 750,000 in 2023, the American Immigration Council reported January 3, citing data from U.S. Citizenship and Immigration Services. But the program doesn’t meet the demand that clearly exists for foreign talent, and the approval process is based on an opaque lottery system.
Moreover, the list of the most frequent H-1B users is dominated by the titans of the tech, finance and consulting industries.
“[The H-1B visa program] greatly benefits the employers that are sponsoring these visas…but now it’s unclear whether they are unable to fill these job needs through domestic workers,” Sahar Akhtar, a professor of strategy and ethics at Georgetown University’s McDonough School of Business, told Newsweek. “It raises questions about these companies’ influence over our elected officials.”
Akhtar noted that people who care about the strength and fairness of the labor market or the economy, such as elected officials, may be at odds on the path forward with business executives and industry leaders who have a different point of view on skilled-worker immigration programs.
While employers using the H-1B may benefit from filling critical roles and even reducing salary costs, as some claim, participating in the program carries heavy up-front financial and administrative costs that are not practical for many organizations.
“For smaller companies, typically, it’s not worth their time or effort to go through all of the paperwork, all of the process, to try to obtain one of these visas,” Akhtar said.
Challenges With the H-1B and Other Visa Programs
The leaders at companies using the H-1B argue, in accordance with the letter of immigration law, that they are hiring workers whose skills are rare or not easily found in the U.S. talent market. Although today they are not required to demonstrate this in an in-depth way, and caps on entry are not based on any sort of labor market needs assessment.
“[The visa program limits] have nothing to do with the particular employment needs of the industry or the area of the country,” Walker said. “That’s one of the big frustrating parts about H-1B, we don’t have something that taps into shortages.”
The list of the companies who make the most use of the H-1B visa is topped by Amazon, with well-known tech and consulting giants making up the majority of the list, including Infosys, Google, Meta, IBM and Deloitte in the top 10, with Accenture, Microsoft, Apple, Intel, EY and Goldman Sachs not far behind, according to a 2023 report from the Economic Policy Institute (EPI). Musk’s Tesla sits at 27, below Walmart (25) and above Cisco (28) and Nvidia (30).
Organizations in some industries, primarily education and nonprofits, are exempt from these caps.
The severity of this talent need for major employers has come into question as of late, especially as many of the companies who have the highest volume of H-1B visa petition approvals also conducted layoffs over the last two years, according to the EPI report.
“If we have high employment and low unemployment rates, then you will typically see a higher demand for these H-1B workers,” Walker said.
The Alternatives
So where does this leave all of the other employers, the 99.9 percent of companies that aren’t among the largest, most powerful companies in the world? They certainly aren’t importing talent frequently—it’s too costly and they’re not likely to be approved. As Envoy Global and the HR services provider Gusto have found, they’re hiring people abroad to work remotely.
Research conducted in January 2024 from Gusto found that “small and medium-sized businesses (SMBs) are increasingly hiring outside of the United States,” with 60 percent of SMB leaders surveyed saying they find it difficult to find talent domestically. Additionally, 75 percent of those that did make an international hire say they plan to hire more from outside the country in the coming years.
“Since the pandemic and the subsequent adoption of remote work, small businesses are more comfortable and willing to hire internationally,” Gusto senior economist Nicholas Tremper wrote to Newsweek in an email. “According to a survey by Gusto in August 2024, 11 percent of small businesses reported hiring an international contractor or employee.”
Gusto’s research noted that hiring freelancers or contract workers from other countries is also on the rise.
“It sort of cements the relationship,” Gusto’s chief economist Liz Wilke wrote in the January 2024 report. “It reduces some of the compliance risks and it also helps SMBs preserve the skills and know-how and intellectual property that these contractors might have access to. It helps keep all of that in-house in addition to having somebody on the ground in these other markets in case you want to expand.”
While remote solutions are great, not all jobs can be completed remotely, and not all companies want remote employees. But for now, access to skilled immigrant labor does not seem to be high for small- and medium-sized businesses.
“With the help and rise of global employer-of-record products, international hiring among small businesses is up. But the process for obtaining H-1B visas for prospective employees continues to be complex and time-intensive for resource-strapped small businesses,” Tremper added via email. “This makes it hard to compete with larger companies who have the time, resources and people power to navigate this process more efficiently.”
Walker also shared that some companies open entities in Canada or Mexico and then bring skilled workers from other countries to those entities, where they can naturalize or transfer internally using an uncapped program for workers from North America.
The Future of Employment-Based US Immigration Policy
Labor advocates and EPI say that the H-1B is used to exploit workers, drive down salaries and serve as an alternative to existing headcount that can lead to layoffs for U.S. workers. The business community is calling for change and is actively pursuing other pathways.
New revisions to the H-1B program take effect this month, but the push for further reform is significant.
“Temporary work visas in general, including H-1B, have been the business community’s top priority on immigration policy for many years now,” Daniel Costa, professor at the University of California, Davis, and director of immigration law and policy research at EPI, told Newsweek via email. “They would like to see more approved and fewer rules about whom they can hire and how much they can pay.”
Costa noted that any president “has the requisite legal authority to fix many of the problems we have identified in H-1B.”
With a new presidential administration taking office this month as well, and Musk, the owner of X (formerly Twitter) and a member of the administration in the newly proposed Department of Government Efficiency, and this topic flaring into the national and online discourse, perhaps more reform is on the way.
“My guess is that it won’t be eliminated because of who it benefits,” Akhtar said.
President-elect Donald Trump seems to have inconclusive views on the issue.
“Trump’s positions have veered all over the place over the years—from saying he would crack down and fix the program, to saying it’s important and that he would expand it,” Costa said. “During the first Trump administration, the administration cut permanent immigration quite a lot…but when it came to temporary work visas—they continued to increase, until the COVID pandemic led to shutdowns and slowdowns of government offices that process visas and petitions for work visas.”
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