NEW GAO REPORT RECOMMENDS REFORMS TO H-1B PROGRAM

A recent report by the Government Accountability Office (GAO) of the H-1B visa program recommends reforms to minimize the risks and costs of the current program.
The January report reiterated what we all know -- that during the past decade the demand for new H-1B workers tended to exceed the cap.
What is interesting is that over the last decade, over 14 percent of all initial petitions were submitted by cap-exempt employers, and only a few employers (fewer than 1 percent) garnered over one-quarter of all H-1B approvals. Many of the problems associated with the H-1B program are attributed to these few employers, most of which are staffing businesses that act as middlemen for employers that are not held accountable for compliance with the rules of the program.
According to the report, these staffing arrangements (that place workers at sites of other employers) are difficult to pinpoint because of lack of disclosure requirements, but the GAO estimated that 10 of the top 85 H-1B hiring companies in fiscal 2009 were staffing businesses, garnering nearly 11,456 approvals.
With the staffing arrangement comes the biggest challenge with compliance with the H-1B program because the end-client is not responsible for the worker, but the staffing company is. Also, there are many chains of staffing companies - that often place an H-1B worker with a company that then places the worker with another company — adding middleman layers that makes enforcement more difficult.
A large number of the H-1B program complaints have been filed against staffing businesses. In the Northeast region, which receives the highest number of H-1B complaints, nearly all the complaints received involve staffing companies. Among the most frequent types of violations is failure by the employer to pay the required wage rate.
The Neufeld memo from January 2009 limited significantly the chances of a staffing company to obtain an H-1B approval. We'll wait and see what other steps will be taken to increase program compliance. However, let's hope that not all H-1B employers are going to suffer.
The report can be found here: http://www.gao.gov/new.items/d1126.pdf