Main image of article USCIS Faces $350 Million H-1B Lawsuit from Tech, Consulting Firms

A consortium of tech companies wants a $350 million refund on H-1B visa application fees—and it’s willing to sue U.S. Citizenship and Immigration Services (USCIS) in order to get it.

USCIS “has unlawfully charged United States companies approximately $350 million dollars in visa fees (likely more) over the past six years,” reads the lawsuit (PDF), filed in the U.S. District Court for the District of Columbia. “Plaintiffs now seek a refund.” (Hat tip to NFAP for posting the link to the court documents.)

In addition to the IT Serve Alliance, which claims it has more than 1,250 tech companies as members, the three named plaintiffs in the suit are iTech, SmartWorks, and Saxon Global, all three of which are staffing firms.

These plaintiffs insist that the USCIS is overcharging them for trying to renew the H-1B visa for immigrant workers who are already in the country; they argue that, under the law, only those workers entering the United States for the first time (i.e., initial applications) should be charged the $4,000 fee.  

“An application for a change of status is not an application for admission,” the lawsuit states. “The Agency, therefore, started charging United States companies the Border Admission Fee on applications where they did not use the border.”

The named plaintiffs are all so-called “50/50” companies, in that they have 50 employees and at least half their workforce is on the H-1B or L visa. “Though ITServe, ITech, SmartWorks, and Saxon Global do not know the total number of 50/50 companies that paid these unlawful fees for the past six years,” the lawsuit continues, “the Congressional Budget Office projected the fees would amount to $150 million a year under PL 111-230 and $400 million a year under PL 114-113 and PL 115-123.” That’s the baseline that the plaintiffs used to arrive at that $350 million figure.

While this lawsuit might seem like an arcane squabble over accounting, it neatly encapsulates much of the fight over the H-1B visa at the moment. The Trump administration has systematically cracked down on the H-1B application process, with USCIS denying an ever-increasing amount of visas. Consulting and staffing companies have been hit especially hard by this trend, as you can see from the following graph:

“At least 12 companies that provide professional or IT services to other U.S. companies, including Accenture, Capgemini and others, had denial rates over 30 percent through the first three quarters of FY 2019,” read the National Foundation for American Policy’s report on the matter. “Most of these companies had denial rates between 2 percent and 7 percent as recently as FY 2015.”

Meanwhile, “pure” tech companies such as Amazon and Google haven’t experienced the same spike—with the exception of IBM, which also has a consulting and business-services arm:

USCIS has made it clear that the denials, along with some other recent administrative moves are “designed to protect U.S. workers, cut down on frivolous petitions, strengthen the transparency of employment-based visa programs, and improve the integrity of the immigration petition process” (to quote a USCIS spokesperson speaking to Mother Jones last year).

In response, tech and consulting firms have fired off lawsuits against the federal government. The IT Serve Alliance filed a lawsuit in 2018 that accused USCIS of approving visas for too short a term (weeks, rather than the “standard” three-year term). That’s in addition to the more than 40 immigration-related lawsuits filed against the federal government by outsourcing and consulting firms. (And let’s not forget the advocacy groups filing lawsuits to make the federal government crack down harder: Also in 2018, for instance, Save Jobs USA filed a suit against the Department of Homeland Security (DHS), claiming that the agency was taking too long to rescind the ability of certain spouses of H-1B visa holders to obtain the H-4 EAD, which would allow them to work in the United States.)

In light of that history, this most recent lawsuit over $350 million in “overcharges” is yet another in a long string of attempts by consulting companies to get the federal government to moderate its immigration approach. But so far, these lawsuits haven’t stopped USCIS and other agencies from continuing to tighten up the requirements and review process for the H-1B, H-4 EAD, and other visas.