H1B Cap Multiple Registrations Fraud

As of April 28, 2023, the H-1B visa program remains one of the most popular and widely used visa programs in the United States. It serves as a means for employers to hire skilled foreign workers in specialized fields, such as science, engineering, and technology, to fill temporary positions that are challenging to fill with American workers. However, the program has faced significant issues with fraud and abuse in recent years, primarily concerning the use of multiple H-1B registrations to increase the odds of selection in the lottery process. This fraudulent activity unfairly advantages some employers while disadvantages those who follow the regulations, and it also prevents legitimate foreign workers from obtaining H-1B visas. H-1B Cap Multiple Registrations Fraud is a severe problem that undermines the integrity of the H-1B visa program and harms both employers and foreign workers who abide by the rules. Despite efforts by the USCIS to address the issue, more must be done to ensure the fairness and transparency of the H-1B program.

USCIS’s recent announcement of the extremely high number of registrations received for FY 2024 H1B Cap has stirred the environment to a shocking level amongst several H-1B employers, H-1B registrants, and the many lawyers representing them engaged in the Business Immigration practice area, especially those representing employers in H-1B petitions. USCIS has just announced that it received a total of 780,884 registrations this year which is approximately 300,000 more than the last year. 

According to a report by The Wall Street Journal today, certain IT companies have colluded to cheat the H1-B Visa Lottery this year. The same applicants were allegedly submitted multiple times into the lottery, with the intention of increasing their chances of winning a visa artificially. The Biden administration has discovered evidence that numerous small technology firms have engaged in this fraudulent practice, hoping to increase the likelihood of their potential foreign hires obtaining a coveted H-1B visa for skilled foreign workers in this year's lottery. This deceitful action has significantly contributed to the inflated demand for visas this year, with a record-high of 781,000 entries into the lottery for 85,000 visa slots.

Registration fee

The question arises: how was it possible for the fraud to have been committed, if it indeed was committed, to such a concerning degree? What could have been the motivation behind it? Was it due to the low registration fee of only $10 per application, which may have encouraged bad actors to try and cheat the system? Alternatively, could it be because one registrant can be easily subjected to the H-1B cap through multiple employers, making it difficult and almost impossible to detect fraudulent activity?

In the old H1B registration system (before FY 2021), individuals had to be cautious about spending money on submitting the same H1B beneficiary through multiple employers in certain scenarios, such as when the owner was a common owner of multiple companies, a partner, or when the other company was owned by a family member. Pre FY 2021 H1B cap system mandated submission of physical petitions including Forms and supporting documents along with USCIS fee that was minimum of $1710 for employers employing 25 or less employees. This fee was $750 for employers employing more than 25 employees and $5000 if employers employed more than 50 employees and 50% of those were on H1B or L1B status. It must be stated that if the petitions were not selected in the H-1B cap, the entire submission along with USCIS fee was returned to petitioners; however, where employers were represented by Lawyers, the fee paid to Lawyers would still have to be spent. This is likely why we never saw such a high number of registrations (not even close) under the old legacy H1B cap system.

H1B Cap Registration Limit

It is difficult to understand why measures were not put in place to prevent such fraud from occurring. The immigration system is often influenced by political pressures and subject to multiple reforms with every change in administration every 4 or 8 years. Some administrations have failed to recognize the economic benefits provided to the United States by foreign workers. The country is currently facing a significant shortage of highly skilled workers, and a simple solution to reducing fraud would be to increase the number of H1B Cap visas available. Congress has the power to implement this solution, yet there has not been a bipartisan effort to do so despite the economic advantages foreign workers bring to the country.

Influential leaders on Capitol Hill have historically pushed to reduce the boundaries of the H1B program in order to appease their caucuses. This has resulted in the H1B cap number remaining at 85,000 since 2004, despite the growing demand for highly skilled workers. The current H1B cap includes 65,000 visas for regular H-1B workers and an additional 20,000 visas for workers with advanced degrees from U.S. universities. While increasing the number of H1B visas available may not eliminate fraud completely, it could significantly reduce the occurrence of fraud. Increasing the H-1B cap limit could help to (i) meet the demand for skilled workers in certain fields, which could have positive economic and social impacts, (ii) provide long-term economic benefits, and (iii) support economic growth and diversity.

Master’s Cap

A viable proposal to reduce the burden on the current H1B program and provide much-needed ease to employers could be to make STEM US Master’s or higher degree H1B cap exempt. This would allow employers to employ STEM US Master’s or higher degree holders by submitting H1B petitions without having to go through the H1B cap.

Litigation is likely to ensue from today's development, where innocent registrants may have been harmed. Even if this results in a second tranche of the lottery, as happened in previous years when the 85,000 visas could not be met and USCIS subjected the remaining registrants from initial registration to random selection, there may still be an argument for the other registrants to prove that harm could have been prevented by proper regulation and monitoring systems.

H-1B Cap Multiple Registrations Fraud is a serious offense that can result in a range of consequences for both the employer and the foreign worker. The US Citizenship and Immigration Services (USCIS) has stated that employers who engage in this type of fraud may be subject to criminal prosecution, civil penalties, and debarment from the H-1B program. The foreign worker may also be subject to immigration consequences, including revocation of their visa or denial of future immigration benefits.

USCIS announced today that it is taking steps to address fraud in the H1B cap registration program and is developing an H-1B modernization rule that will propose several improvements, including strengthening the H-1B registration process to prevent misuse and fraud. While it is unclear what specific measures will be implemented to reduce fraud, it is expected that they will add complexity and expense for employers who comply with the law. The government has proposed increasing the H1B cap registration fee to $215, which is likely to take effect in FY 2025.

Bad actors unwittingly drive improvements by exposing weaknesses, flaws, or corrupt practices that must be addressed. By breaking rules, violating laws, or engaging in unethical conduct, bad actors bring attention to problems that might otherwise have gone unnoticed. This is precisely what happened today. Failures that are identified and resolved immediately lead to robust practices.

[This blog is for informational purposes only and not to provide any legal advice]

Vijay Bhagwati, Esq.

Founder and Managing Partner