The COVID-19 pandemic and visa restrictions are having an impact on the number of H-1B workers currently in the United States, as well as the U.S. government’s H-1B lottery process.

An analysis of U.S. Department of Labor (DOL) data by Bloomberg shows that the number of engineering and mathematics workers on the H-1B “fell 12.6 percent in the fiscal year ending September 2021 compared to the previous year.” That’s the second consecutive annual decline “for a segment of the workforce that has historically seen consistent job growth,” the publication added.

What’s behind the drop? The COVID-19 pandemic slowed the pace of visa processing. Virus-related travel restrictions and the rise of remote work also placed additional pressure, with many companies opting to offshore their technology workloads rather than apply for worker visas.

Meanwhile, the U.S. government still hasn’t dispensed its full quota of H-1B visas, resorting to a third lottery for the fiscal year 2022 cap. This is the first time that U.S. Citizenship and Immigration Services (USCIS) has conducted a third lottery. According to the National Law Review:

“USCIS has determined that there were fewer filed H-1B petitions as compared to selected H-1B registrations in the prior two lotteries. As a result, USCIS selected an additional 16,753 registrations out of the roughly 190,000 unselected registrations from March in order to ensure that enough petitions are approved to fill the annual quota of 85,000.”

The Biden administration spent its first year rolling back many of the Trump administration’s immigration-related restrictions, including an attempt by the Department of Homeland Security (DHS) to narrow the eligibility for the H-1B visa. Although the Biden administration has hinted at H-1B reform—including legislation that would prioritize visas based on wages—it has yet to announce anything substantial in that regard.

For years, critics have argued that the current H-1B lottery allows companies to import cheaper labor. Meanwhile, the visa’s supporters insist that the tech industry’s low unemployment rate means companies need the H-1B in order to secure the specialized talent they need. Whatever your position, though, it’s clear that the pandemic has impacted the H-1B system in very significant ways—and may continue to do so for quite some time.