Startups Feeling The Heat Of Crackdown On H-1B Visa By US Officials

Startups Feeling The Heat Of Crackdown On H-1B Visa By US Officials

Jacob Babcock was thrilled when his fledgling Chicago tech company, NuCurrent, won the lottery to apply for an H1B visa for a key foreign-born employee. He wasn’t counting on the odds getting longer when it came to actually getting the application approved.

But the company’s application to get a visa for Unnati Wadkar last year was rejected—twice. Babcock wasn’t willing to give up on the employee, a University of Illinois at Chicago graduate whose name is on 10 patent applications. So his 25-employee company sued the U.S. government, asking a federal judge to overrule the denial by the U.S. Citizenship & Immigration Services agency and approve Wadkar’s application.

“She is a really important employee to us,” Babcock says. “We’re going to fight for our people.”

It’s an extreme response to what companies say are changes in the H1B process since Donald Trump was elected that have made it much harder to hire foreign workers for high-skilled technology jobs for which demand far exceeds the supply of domestic talent. While the brunt of the crackdown falls on big firms that hire large numbers of foreign programmers, the new restrictions can be devastating to startups like NuCurrent when an essential employee can’t get permission to work in the U.S.

“This makes it harder for American companies to grow,” says Babcock, who was a law student at Northwestern University when he co-founded NuCurrent, which makes technology to wirelessly charge devices, such as cellphones and hand-held bar-code readers and computers.

Immigration officials are rejecting a third of new H-1B applications now, up from 24 percent a year ago and just 6 percent in 2015, according to a study of federal data by the National Foundation for American Policy. “Clearly the standard has changed,” says Stuart Anderson, executive director of an immigration research group based in Arlington, Va. “It seems the current policy is to try to get to no.”

The Citizenship & Immigration agency declined to comment on Wadkar’s case but provided data showing just 16 percent of applications were denied through the first half of 2019. NFAP says the government offers two types of H-1Bs—new visas and extensions—and rejection rates are higher for new applications.

The H-1B program, which allows foreigners to work in the U.S., has long been a pain point, especially for technology companies that have pushed for more work visas. Applications outnumber the 85,000 visas available each year by more than 2-to-1. But with fewer applications getting final approval, “the process is getting more difficult and unpredictable,” says Dick Burke, CEO of Envoy Global, a Chicago-based immigration services company. “Any company that uses H-1Bs has been impacted.”


The biggest losers have been consulting firms, such as Accenture and Deloitte, which have been criticized for bringing lower-paid foreign programmers into the U.S. on H-1B visas. These companies have seen denial rates for H-1Bs increase by more than 40 percentage points, according to NFAP’s analysis of federal data. (Denial rates for Amazon, Apple, Facebook, Google, Intel and Microsoft are under 10 percent.)

But such large companies usually have overseas operations where they can employ H-1B applicants who are rejected. “Smaller companies don’t have that option,” Anderson says.

Wadkar began working at NuCurrent as an intern in 2015 before she graduated from UIC with a master’s in electrical engineering a year later. The company hired her and sought an H-1B to replace her student visa, which expired in June, when NuCurrent’s administrative appeal of her H-1B denial was rejected. She’s now back in India as the company’s court case proceeds.

The government said NuCurrent failed to show her job was a speciality. But Babcock says he provided ample evidence, including letters from competitors, that the job requires advanced education.

“Engineering is by definition a speciality occupation. Based on the law, there should have been an approval,” says Sara Herbek, an attorney at Global Immigration Associates in Chicago, who is not involved in the case.


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Companies such as NuCurrent have nothing to lose by suing, says Sameer Khedekar, an immigration attorney in Palo Alto, Calif., who runs Banyan Labs, a firm focused on helping companies with visa denials. “It’s the only way to fight back.”

Although companies are wary of taking on the government, they generally have a good chance of winning. “Companies win more often than they lose,” Khedekar says, based on his anecdotal observations. “If they’re going to take it that far (to court), they have a case.”

This isn’t the only time immigration policy has caused heartburn for NuCurrent. In the company’s earliest days, Babcock’s co-founder, Vinit Singh, an Indian immigrant with a doctorate from North Carolina State University, went home to India for the holidays, only to get stuck there for three months by an unexplained administrative delay related to background checks. These days, Babcock is reluctant to send a Chinese-born employee with an H-1B to China to work with customers there “because there’s too much risk that they might be delayed coming back to the U.S.”


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