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The Rising H1B Rejection Rate -Is the American Dream Dying?

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  • H1B initial visa denial rates quadruple from 6% in 2015 to 24%
  • H1B continuing employment visa denial rates reach 12%
  • Denial rates for American firms rising at a much lower rate

For many software engineers, the chance to be sent to the USA on an H1B visa is the factor that pushes them into the field. The dream is to work in America for long enough to get a Green Card and eventually, citizenship. But, as the H1B rejection rate increases, many Indians are seeing their dreams turn to dust.

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For the current fiscal year, H1B visa denial rates have hit 24%. This is considerably higher than the 6% it stood at in 2015.

Indian IT companies have been hardest hit by the Trump administration’s restrictive immigration policy.

Companies Affected By Rising H1B Rejections Rates

CompanyFresh ApprovalsDenials
Cognizant500790
TCS528152
Infosys6980
Deloitte593295
Capgemini2731,061
Microsoft1,25213
Amazon2,39923
Wipro27382
Accenture363160
HCL196100

Tech giants like Amazon, Microsoft, TCS, and Infosys are amongst those affected the most by America’s stance on local hiring. When companies want to hire immigrants, they must sponsor the H1B visas.

In 2018, TCS got 528 fresh visas approved while 152 were denied. Cognizant had 790 visa application denied and only 500 approved.

CompanyH1Bvisa rejection rate FY15H1Bvisa rejection rate FY19
Wipro7%62%
Infosys2%57%
TCS2%43%
HCL6%37%

In 2015, Wipro saw an H1B visa rejection rate of around 7% but by FY19, this had increased to 62%.

Similarly, visa rejection rates have gone from single-digit figures in FY15 to double digits in FY19 for other tech companies like HCL, Infosys and TCS. Not only is this disheartening for aspiring engineers, but it also leads to business difficulties for the companies and their clients.

Why Is The H1B Rejection Rate Rising?

YearRejection Rate
20156%
201610%
201713%
201824%
201932%

The rejection rate for a US visa is between 40 and 50% today. However, not more than 2 years ago, this rate was only around 4-5%. The main reason for this is the Trump administration’s focus on local hiring.

The USCIS has been given a freer hand with Requests for Evidence (RFEs) and the guidelines for approving visas has been made more stringent.  In 2016, the RFE rate for Indians applying for an H1B visa was 5%. In 2018, this had increased to 50%.

H1B Denial Rates Higher For Indian IT Firms Than US Firms In 2019-20 3rd Quarter

A study by the National Foundation for American Policy noted that H1B visa denial rates had quadrupled from 2015 to the current fiscal year. This was based on information from US Citizenship and Immigration Services (USCIS).

Many Indian IT professionals depend on this visa to work in US companies. Based on the high denial rate of H1B visas for major Indian IT companies, the study gave credence to charges of Indian companies being unduly targeted by the current US administration.

For example, while H1B denial rates stood at less than 10% for American companies like Google, Amazon, and Microsoft, they rose to 41% for Tech Mahindra, 34% for Tata Consultancy Services and 53% for Wipro.

H1B Denial Rates For Indian Companies

CompanyDenial Rate In 2015Current Denial rate (2019-20 3rd Quarter)
Tech Mahindra4%41%
TCS6%34%
Wipro7%53%
Infosys2%45%

H1B Denial Rates for American Companies

CompanyDenial Rate - 2015 Denial Rate -2019-20 3rd Quarter
Amazon1%6%
Microsoft1%8%
Intel1%7%
Google1%3%

At least 12 Indian companies that offer IT services to US companies had H1b denial rates of over 30% in the first three quarters of the 2019-20 fiscal year.

Denial Rate for H1B Continuing Employment Visas

Denial rates for continuing employment for Indian IT firms on the H1B visas also increased. In 2015, this rate stood at 3% but now, it stands at a historic high of 12%. 

Tech Mahindra saw denial rates jump from 2% in 2015 to 16% while Wipro saw an increase of 15% in the number of visa applications denied.

However, denial rates for H1B continuing employment petitions made by American firms stayed much lower.

H1B Continuing Employment Denial Rates For Indian Companies

CompanyDenial Rate -2015Current Denial Rate - 2019-20 3rd Quarter
Tech Mahindra2%16%
Wipro4%19%
Infosys1%29%

H1B Continuing Employment Denial Rates For American Companies

CompanyDenial Rate -2015Current Denial Rate -2019-20 3rd Quarter
Amazon1%3%
Microsoft2%2%
Intel1%3%
Google0.4%1%

Challenging Times For Indians in the USA

It isn’t just fresh applications that are seeing a spike in rejection rates. H1B visa renewal rates have spiked from 3% in 2015 to 18% in 2019.

yearH1b Visa Renewal Rejection Rate
20153%
20164%
20175%
201812%
201918%

An increasing number of visa extension applications are also being rejected. As a result, many Indians in the USA are realizing that they may have to leave the country and move back to India or to countries like Canada.

Implications

The rising denial numbers prove that the environment for working in the USA has not improved much for Indian firms. As a result, many IT companies have shifted or are considering shifting their focus to countries like Canada.

This would affect not only the US economy but would also make the country’s innovative capacity fall. This could be a disadvantage for the USA in the long run.

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