Tag: Labor shortages

Iterate.ai has relied heavily on highly trained tech workers from around the globe to meet demand for its customized artificial intelligence agent systems, bringing some of them to the U.S. under the H-1B program when the company can obtain a visa.

Last month, the tech firm’s growth plans were upended when the Trump administration, via a presidential proclamation, added a $100,000 fee per visa to new petitioners of the H-1B program. It also warned that a higher-wage floor was likely, tilting the odds in favor of older and more highly-skilled workers.

“We have a number of guys on H-1B visas and a number we are trying to bring in. If we have to pay $100,000 (per worker), that makes it impossible to hire people on those types of visas,” said Jon Nordmark, CEO and co-founder of Iterate.ai, which maintains an office in Highlands Ranch.

The company, among the U.S. firms riding the AI wave, may end up locating more workers in Toronto and fewer in Denver and San Jose, California, where it is based, as it tries to meet the rising demand for its products and services, Nordmark said.

Moving beyond an initial focus on deporting immigrants with criminal records, the Trump administration is now revising rules for several visa programs used to actively recruit foreign workers to the U.S. Some of the earliest and most dramatic changes have come in the H-1B program, which currently accommodates an estimated 600,000 college-educated workers with specialized skills nationwide.

The addition of a $100,000 application fee for new H-1B petitions, alongside reforms to favor higher-wage and higher-skilled roles, could have significant implications for tech employers in states like Colorado, where younger and smaller firms dominate.

The changes could slow innovation and force smaller technology firms to locate more of their workforce outside the country, said Nathan Mondragon, chief innovation officer at Hirevue, a Utah firm that specializes in AI hiring solutions.

“The immediate effect is that the cost of hiring skilled foreign talent will rise dramatically, particularly for startups and mid-sized companies that depend on specialized skills but may not have deep resources,” said Mondragon, who is a Colorado State University graduate.

The country’s largest and most established tech firms are expected to have the easiest time covering the fee as the country moves away from a straight lottery system. Jensen Huang, CEO of the world’s most highly valued public company, pledged to pay the $100,000 fee for his company’s H-1B recruits.

“As one of many immigrants at Nvidia, I know that the opportunities we’ve found in America have profoundly shaped our lives,” Huang wrote to his employees. “And the miracle of Nvidia — built by all of you, and by brilliant colleagues around the world — would not be possible without immigration.”

Colorado’s tech sector is pushing the envelope in emerging areas like quantum computing and AI, as well as in niche sectors like cybersecurity and financial technology, or fintech. Emerging firms, lacking profits, run leaner and are typically more dependent on the flow of talent emerging from nearby universities, including international students.

If emerging tech firms can’t obtain the talent they need, they will fall behind. If the state’s tech sector starts to fall behind, Colorado’s economy could find itself coping with slower growth and smaller wage gains, those closest to the tech sector warn.

“Pay-to-play H1-Bs will box out all smaller companies, including startups, from bringing talented foreigners on board. This will give big companies another advantage in talent acquisition, as if they needed any more advantages,” said Basalt resident Jonathan Greechan, CEO of the Founder Institute, which has tech accelerator chapters in 100 countries.

Why the H-1B matters

The H-1B program, which started in 1990, is capped at 65,000 new visas for those with a bachelor’s degree and another 20,000 reserved for applicants with a master’s degree or higher. Colorado employers applied for about 3,800 H-1B visas during the last fiscal year.

Tech firms claim about two-thirds of the visas issued, with smaller amounts taken by universities, architectural and engineering firms, health care providers and financial companies. In Colorado, EchoStar, Charter Communications, Tata Consultancy Services and Cognizant Technology Services were the private employers requesting the largest number of visas, according to U.S. Citizenship and Immigration Services.

About three-quarters of the workers coming to the country under the H-1B program, which typically has a three-year term, are from India, with Chinese workers accounting for one-tenth, according to a report from the Pew Research Center. The program is not for permanent residency, although employers can and do seek visa renewals, often to allow employees more time to obtain a green card or citizenship.

Educational institutions, which until recently were exempt from the cap but now will fall under it, also rely on the program. The University of Colorado’s Denver campus requested 130 visas and the Boulder campus sought 108 last fiscal year, while Denver Public Schools had 101 petitions, according to Citizenship and Immigration Services.

Nordmark said the program has historically served as a career bridge for foreign students coming to the U.S. to obtain degrees. Upon graduation, they shift from a student visa to an H-1B visa. In some cases, international students obtain multiple and highly specialized degrees until they find employment in the U.S.

Several of the country’s top tech leaders, including Google CEO Sundar Pichai, Microsoft CEO Satya Nadella and Sun Microsystems co-founder Vinod Khosla, worked under H-1B visas before rising through the ranks.

The Trump administration has argued that the H-1B program has been misused, suppressing wages and denying native workers higher-paying job opportunities. Third-party firms have used the program to place workers, taking a cut in the process, and vague job titles allow employers to bypass program rules.

Supporters point to studies that show companies, especially small ones, that employ H-1B workers have stronger earnings growth and are more likely to survive than rivals that don’t. They argue the changes being made will disadvantage the one sector that has contributed more to making the American economy great and will open the door to other countries snagging talent.

China launched a new K-visa program on Oct. 1 to recruit young science, tech and engineering workers from abroad, the kind that will find it harder to participate in the U.S. H-1B program. Canada, Germany, New Zealand, South Korea and the United Kingdom are also easing rules for foreign workers with specialized skills.

But China’s new visa program also appears to have created a backlash among unemployed Chinese workers, echoing some of the pushback seen in the U.S., and critics come from both ends of the political spectrum.

“It’s a complex issue and I can see two sides to the argument that a reasonable person could make,” said David Cohen, CEO of Techstars in Boulder. “If the talent is truly that ‘extraordinary,’ companies are likely to find a way to pay this fee in most cases.”

He worries that the U.S. could be putting at risk a core competitive advantage — “having great talent wanting to be in this country.”

The program’s new emphasis on higher wage earners, who will receive more slots in the visa lottery compared to recent college graduates, will favor older, more experienced applicants, said Ben Johnston, COO of Kapitus, a small business lender.

“Many international students come to U.S. schools with the expectation that they will be able to work here under the H-1B program upon graduation. If fewer visas are available for lower wage earners, this may curtail the demand for a U.S. education for some international students,” Johnston said.

Many of the greatest tech innovations the country has seen have come from young and hungry entrepreneurs working outside corporate confines, with young immigrants playing a critical role. Greechan said he believes the fee and wage restrictions will make the U.S. less attractive for the best and brightest talent from abroad.

“I don’t think the current administration cares how much the U.S. has benefited from this consistent influx of talent, simply because it’s not in line with their anti-immigration sentiment,” Greechan said.

And there is a psychological toll on workers. Niharika Shukla, an attorney working at Iterate.ai, said the changes have left H-1B workers in limbo as they try to navigate the country’s complicated and drawn-out process for obtaining permanent status and citizenship.

Initially, it wasn’t clear if the fee would apply to existing visa holders or new petitioners, creating a sense that all jobs could be at risk. Some workers who were on vacation or visiting family thought they needed to return to the U.S. immediately. The administration clarified that it was only for new petitioners.

Overall, it has created uncertainty about what comes next and a deepening sense of unease, even fear.

“I have friends — people with advanced degrees, stable jobs, American-raised kids — who still live in visa limbo. They pay taxes, work hard and give back in every way, but every year, they hold their breath during H-1B season. They don’t know if this will be the year it all unravels,” Shukla said.

Shukla’s husband came to the country on an H-1B visa, which allowed her to obtain an H-4 visa as a spouse and an employment authorization document, or EAD, that allowed her to continue her legal career in the U.S.

“If anything had happened to his visa, my legal ability to work would’ve disappeared, too,” she said.

Shukla said a friend’s daughter, who recently started middle school, asked her mom if the family would have to leave this year.

“That little girl was born here. Her whole world is here. But because her parents are still stuck in the visa queue, even she lives with uncertainty,” Shukla said. “This is the human side of immigration policy that’s so often overlooked. It’s not just about foreign workers or companies. It’s about families, children, stability. It’s about people who want to belong, but are made to feel temporary, year after year.”

Other industries watching

Employers in landscaping, tourism and agriculture are keeping an eye on what might come next for the foreign worker visa programs they rely on.

And the construction industry, which has a heavy concentration of foreign-born workers, is lobbying hard for a visa program as it struggles with stricter immigration enforcement and a looming wave of retirements.

Landscapers in the state have come to rely heavily on the H-2B program, which is for temporary or seasonal non-agricultural workers. On a per capita basis, Colorado is the biggest user of any state of that program, said John McMahon, CEO of the Associated Landscape Contractors of Colorado.

Ski resorts and resort hotels also use that program, along with the J-1 visa, a cultural exchange program that brings in multilingual workers able to converse with international guests.

Finding enough workers to fill open landscaping positions has long been a struggle, even when firms can bring in foreign laborers. The H-2B program is capped at 66,000 new applicants a year nationally, split between 33,000 workers from Oct. 1 to March 31 and 33,000 workers from April 1 to Sept. 30.

Petitioners are cautious about asking for too many visas, which could draw scrutiny from immigration officials, McMahon said.

The program allowed for another 64,716 workers, mostly returning workers, last year. But even at 131,000, the allocation is far below the 500,000 that some estimates say are needed to meet actual demand for seasonal workers, he said.

Most H-2B visa holders work for up to nine months and then return home, although some try to bridge the two seasons. Raids by U.S. Immigration and Customs Enforcement have increasingly made authorized visa holders, including those working in Colorado for years, uneasy and asking themselves if they want to keep coming back, McMahon said.

On Sept. 2, the administration started requiring that all seasonal workers under the H-2A and H-2B programs, for agricultural and non-ag workers, have in-person interviews at a U.S. consulate location. Returning workers and those with clean records were not exempt. The rule change is expected to result in 350,000 additional interviews in Mexico alone.

In contrast to the H-2B and H-1B programs, the H-2A program for farm workers doesn’t have a cap. Around 5,000 to 6,000 workers are brought into Colorado each season under that visa. It does have additional requirements that employers provide free housing and meals or access to cooking facilities.

Unlike California, farms and orchards in Colorado have seen minimal raids from immigration enforcement, said Marilyn Bay Drake, executive director of the Colorado Fruit and Vegetable Growers Association.

Instead, a state rule that requires overtime pay after 48 hours or 56 hours, depending on the intensity of the harvest season, is complicating their operations and resulting in some H-2A visa holders going elsewhere to work.

Harvesting requires intense stretches of long hours during short windows of time to bring in and process crops, one reason that ag workers have been excluded from federal overtime requirements.

Rather than paying overtime, farmers, who often operate on razor-thin margins, are capping hours in Colorado. That has upset some workers, who want to earn as much as they can in the limited time they are in the country.

“We haven’t seen impacts from immigration policy, but we have seen negative impacts from the overtime regulations in our state,” said  Emily King, compliance and marketing manager at Fagerberg Produce in Eaton.

The onion farm has three H-2A workers from South Africa who operate harvesting equipment. In June of last year, one of those workers came in on a Friday to say he was resigning and would be leaving Sunday to work at a producer in Idaho who offered him 100 hours a week with no overtime restrictions, King said.

Not only did Fagerberg Produce lose a key worker, but it had also paid for his trip to come to the U.S.

“For H-2A workers, it’s a proposition of, ‘Is it worth it to come?’ And our state overtime rules weigh heavily on that calculus. It’s magnifying and exacerbating ag’s No. 1 problem, which is access to labor,” said Ashley House, vice president of advocacy and strategy at the Colorado Farm Bureau.

Construction struggling

Tougher immigration policies are taking a toll on the construction sector, where about a third of workers are foreign-born, and which lacks a dedicated visa program.

About nine in 10 construction firms nationally report having a difficult time finding enough qualified workers to hire. They cite those labor shortages as a primary cause behind delayed construction projects, according to a survey released last month by the Associated General Contractors of America.

About one-third of respondents nationally and in Colorado said tougher immigration enforcement this year had complicated their operations.

Of the 44 Colorado contractors who took part in the survey, 5% said their work sites had been visited by immigration agents. Another 7% reported workers not showing up because of concerns over actual or rumored enforcement actions. Close to a quarter of the firms surveyed said their subcontractors had lost workers, according to the AGC.