GAO Critical Of H-1B Visa Program

The nation's contentious H-1B visa program that lets companies fill jobs with foreign workers whose skills are scarce in the U.S. is weak in protecting U.S. workers, while bestowing disproportionate benefits to relatively few companies, a government report found.

The Government Accountability Office, Congress's watchdog for public programs, also found that poor coordination between agencies in sharing data hindered tracking of H-1B workers and the ability to determine whether the annual cap on such worker has been reached.

The GAO delivered its report Thursday to a subcommittee of the House Judiciary Committee. The report spells out the current state of the divisive program. Proponents, many of which are tech companies, argue that it allows companies to fill gaps in the U.S. workforce, particularly in areas of science and technology. Opponents say there is no skill shortage, and the program is used to replace U.S. workers with lower-paid foreign workers.

Rather than take sides, the GAO report spelled out the shortcomings in the program, based on research covering the years 2000 to 2009. One finding showed that less than 1% of H-1B employers received more than a quarter of all the workers allowed to enter the country, while the majority of employers -- 68% -- were approved for just one foreign worker.

Among the biggest beneficiaries of the program were staffing companies that contracted out H1-B workers. The GAO found that 10 of the top 85 H-1B-hiring companies in 2009 fit that category, with six of the 10 headquartered in India. All together, these 10 companies accounted for 6% of all H1-B approvals that year, and three of them were in the top five hiring companies.

While these companies benefited from the program, U.S. workers saw protections, such as requirements to pay prevailing wages, weakened. That's because program oversight is fragmented among four agencies and restricted by law, the GAO says. In addition, the program does not hold employers accountable for following the rules, when they hire foreign workers through a staffing company. Finally, changes to the program that has broadened job and skill categories, increased exceptions to the annual 65,000-worker cap, and unlimited extensions to H-1B visas has led to lower standards for eligibility and a pool of foreign workers that exceeds the cap.

How much the cap is exceeded is unknown, due to poor integration of data systems spread across various agencies involved in the program. As a result, the GAO was unable to determine the total number of H-1B workers or how long they have been in the country.

One fact the GAO was able to determine is that companies are not moving operations overseas because of the H-1B cap. Interviews with 34 companies across industries uncovered several reasons for heading to other countries: access to lower-cost skilled labor, the pursuit of new markets, the ability to have more workers available anytime by having them in different time zones, and lower taxes.

A copy of the report is available on the GAO website.