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H-1B visas: More than the quotas indicate

(MoneyWatch) April 15th is getting closer, but it's more than just tax season. It's also the time when the government begins processing the H-1B visa applications that have come in since April 1st. These are the documents that allow companies to hire highly trained foreign research and development workers and bring them to the U.S.

Companies such as Microsoft (MSFT), Apple (AAPL), Google (GOOG), and Facebook (FB) have long lobbied the government to grant more visas than the current number of 85,000 annually, and Congress appears to be on the verge of increasing the limit. But the program remains controversial and there are many aspects that the public doesn't understand.

Technology companies have for years claimed that the number of available H-1B visas is nowhere near high enough to meet the needs of high tech. And this year, the U.S. Citizenship and Immigration Services has said there is a possibility that it might have to hold a lottery to distribute the available visas among all the requests.

More than meets the eye

However, the number of visas is deceptive. For example, 20,000 of the 85,000 positions are considered exceptions, reserved for those with a master's degree or higher. They're processed under a separate track until that set-aside is no longer available. Remaining people with a master's or higher are then considered in what remains of the general pool of 65,000.

Another 10 percent of the general pool is put aside under U.S.-Chile and U.S.-Singapore Free Trade Agreements. Any unused slots in that pool are made available the next fiscal year, expanding that number.

Through 2014, positions in Guam or the Northern Mariana Islands are exempt from the quotas. A company could run a research facility in either of these U.S. territories and theoretically bring in additional people.

Furthermore, the quotas are only for new hires in the coming fiscal year. Extensions to H-1B visas are considered separately and can greatly expand the number of foreign technical workers in the U.S. A report for fiscal year 2011, which ended in September 2011, shows that 269,653 H-1B petitions were granted. More than half worked in the computer industry.

Takes longer than you think

The current flurry of corporate concern and news reports over having enough H-1B visas might leave one to think that the spigot of foreign talent is fastened so tightly that demand immediately overruns supply. That, however, is not generally the case.

In July 2011, business leaders petitioned Congress for more H-1Bs. Microsoft said the company couldn't fill 4,500 jobs because of the lack. However, by that date, not even third of the regular H-1B quota and just over half of the master's degree exception had been claimed for the next fiscal year, even though there were only two months left in that season. It wasn't until November 22 that the 65,000 cap was reached. The master's exception of 20,000 was not filled until October 28.

It may be that the slower grab for H-1Bs was due to a still-recovering economy. In 2008, it took only three days to burn through the quota. However, it does raise the question of just how badly companies are overstating their need high tech foreign workers, or whether, as some critics claim, the move is actually a back-door way for companies to reduce prevailing wages for engineers, developers, and scientists.

And here's another thought that critics cite: The companies that often obtain the most H-1B visas are actually headquartered in India.

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