On Friday, the U.S. Citizenship and Immigration Services announced that there was a dramatic increase in multiple H-1B registrations for single individuals for Fiscal Year 2024.
The agency announced that it has “undertaken extensive fraud investigations . . . and is in the process of initiating law enforcement referrals for criminal prosecution.” The acknowledgement by the USCIS of such a level of potential fraud is extraordinary.
On the other hand, it may turn out to be that some of the cases being investigated are not instances of criminal fraud, but rather situations where registrants “gamed the system,” taking advantage of what appear to be poorly drafted regulations.
Friday’s announcement came as a supplement to the USCIS announcement on March 27 that the H-1B registration cap for FY24 had been met. The caps for FY24 were 85,000 total, including the advanced degree exemption of 20,000.
Rampant fraud, or using the system to one’s advantage?
A Wall Street Journal article on Friday reported that, according to the USCIS, “a small number of companies are responsible for entering the same applicants into the lottery multiple times, with the alleged goal of artificially boosting their chances of winning a visa.” (Article requires paid subscription to access.)
According to USCIS data reported on Friday, more than 400,000 H-1B “eligible” applicants for FY24 were registered more than once. This is a dramatic increase from prior years: For FY23, the number was 165,180; for FY22 it was just over 90,000; and for FY21 it was just over 28,000.
The “eligible” pool excludes duplicate registrations, registrations deleted by the prospective employer before the close of the registration period, and registrants whose payments have failed.
However, the WSJ article also noted that the USCIS plans to write new H-1B regulations, which may be an acknowledgement that the existing registration rules are inadequate to prevent abuse and fraud – and may even be vulnerable to manipulation that is legal.
(The actual USCIS data appear at the end of this bulletin.)
If fraud, how it might have happened
It is unlikely that a single employer has been filing multiple registrations for the same individual because the registration system is expected to catch that. Rather, the alleged fraud appears to entail violation of the employer registrant’s attestations, under penalty of perjury, that
All of the information contained in the registration submission is complete, true, and correct;
The registration(s) reflect a legitimate job offer; and
The registrant, or the organization on whose behalf the registration(s) is being submitted, has not worked with, or agreed to work with, another registrant, petitioner, agent, or other individual or entity to submit a registration to unfairly increase chances of selection for the beneficiary or beneficiaries in this submission.
(Emphasis added.)
Rather than multiple registrations by a single employer, a likelier scenario is registrant collusion. In other words, there is only one job opening, but two or more employers agree to register for the same individual. If the “phony” employer’s registration is selected, it files the H-1B petition on behalf of the individual. Then, when the petition is granted, the individual goes to work for the real employer.
Discussion
The USCIS announcement demonstrates that the H-1B registration system is vulnerable to abuse. Although the system can exclude multiple registrations by the same employer for the same beneficiary, it apparently cannot at the intake stage catch a registrant who was colluding with others to file multiple registrations for the same beneficiary.
Even without the issue of potential fraud, Congress should raise the current H-1B cap, which is insufficient to meet the needs of U.S. employers. In FY24, there was a 13 percent increase in eligible registrations of individuals with one registration versus FY23 and about a 45 percent increase since FY21. The USCIS’s proposed increase in the registration fee from $10 to $215 is an inadequate disincentive to file a registration. Often, the beneficiaries are already being employed as F-1 students working on Optional Practical Training (one year) or STEM Optional Practical Training (two more years). Employers have good reason to want to continue to employ these individuals as H-1B workers after their training ends and are not likely to be deterred by a $215 registration fee.
Needless to say, any employers who have been colluding with other companies to have multiple H-1B registrations filed should end this practice immediately. They should also consult with counsel now regarding whether they could be liable for fraud and, if so, what they can do to mitigate the effects of their past actions and minimize their risk of incurring criminal and civil penalties.
Background
Overview of H-1B registration system
The H-1B registration system consists of an online filing by employers in March of each year subject to an annual “cap.” Before 2020 (for the FY21 cap), employers were required to file their full, “and often voluminous,” petitions, which would be selected at random. According to the USCIS, “This process resulted in unnecessary paperwork and incurred mailing costs for both petitioners and the agency.” Since 2020, the full H-1B cap petition is not filed unless the H-1B registration has been selected, which is less expensive and more efficient for both employers and the USCIS.
USCIS data
The following is from a USCIS chart showing “registration and selection numbers for fiscal years 2021-2024 (as of April 24, 2023)”:
|
Cap Fiscal Year |
Total Registrations |
Eligible Registrations* |
Eligible Registrations for Beneficiaries with No Other Eligible Registrations |
Eligible Registrations for Beneficiaries with Multiple Eligible Registrations |
Selections** |
|
2021 |
274,237 |
269,424 |
241,299 |
28,125 |
124,415 |
|
2022 |
308,613 |
301,447 |
211,304 |
90,143 |
131,924 |
|
2023 |
483,927 |
474,421 |
309,241 |
165,180 |
127,600 |
|
2024 |
780,884 |
758,994 |
350,103 |
408,891 |
110,791 |
*The count of eligible registrations excludes duplicate registrations, those deleted by the prospective employer prior to the close of the registration period, and those with failed payments.
**The number of selections was smaller in FY24 than in prior years primarily due to (a) establishing a higher anticipated petition filing rate by selected registrants based on prior years; and (b) higher projected Department of State approvals of H-1B1 visas, which count against the H-1B cap.
As can be seen from the chart,
The number of eligible registrations has increased from FY21 to FY24 by almost 300 percent. The increase from FY23 to FY24 was roughly 60 percent.
From FY23 to FY24, the number of eligible registrations of individuals with only one registration increased about 13 percent. However, the number of individuals with multiple registrations increased about 150 percent.