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The H-1 visa was created by Congress in 1952. Initially, the visa had two requirements 1) that the job offered to a foreign worker be temporary and 2) that the foreign worker establish an intent to return home. Since then, these requirements have been removed from the law. Employers have been permitted to hire for permanent positions since 1970, and, since 1990, the worker may have the dual intent to stay temporarily and/or permanently.

In 1990, Congress reacted to the increased use of the H visa by trying to protect the domestic worker. Prior to that time, there were no numerical limitations of the number of H visas to be issued and the law offered no protection for US workers.In 1990 a numerical cap of 65,000 new H-1Bs per year was established. The numerical cap was to increase the viability and competitiveness of American workers by limiting the number of foreign workers who would be permitted to enter.

Despite the numerical limitations imposed by the Immigration Act of 1990, employer demand for H-1B employees continued to grow. In the past five to seven years the increased demand has mostly come from the expansion in the information technology industry. The recent increase in demand has in part also been fueled by the increased availability of foreign students in the information technology fields in colleges and universities throughout the US. In 1996 and 1997 the demand for H-1B visas was such that the cap was being reached about half way through the fiscal year.

The IT industry responded by lobbying Congress for a more realistic cap. As a result of the lobbying efforts of the IT industry, Congress passed the American Competitiveness and Work Force Improvement Act ("ACWIA"). Beginning in October of 1998, that legislation provided an increase in the number of available H-1B visas from 65,000 per year to 115,000 per year in 1999 and 2000, and 107,500 in 2001.

ACWIA raised the numerical limits, but also included provisions designed to protect American workers and curb abuse o f the visa. H-1B dependent firms were defined in the law as those with a certain percentage of their workforce who are H-1B visa holders. The new law also requires that H-1B workers receive the same fringe benefits as U.S. workers.

In addition, to these changes the Act required the employer to pay an additional $500 fee for each H-1B petition, which has since been increased to $1,000. It also provides for new investigative procedures and new penalties for violations. Most of the fee add-on will go toward training of displaced workers and scholarships for low-income students. Universities and most non-profit organizations are exempt from the $1000 fee add-on.

By 1999 it was evident that the increase in the cap provided for in ACWIA was insufficient. The backlogs from prior fiscal years and the continuing demand resulted in 59,108 of the 115,000 available H-1B visas being used 3 months into the fiscal year1999. Approximately one- third of those visas were issued to foreign workers whose applications were held over from the prior fiscal year.

The cap was easily reached before the end of 1999. In fiscal year 2000, the available visas also ran out and by mid-year. Responding to this, Congress once more passed legislation, the American Competitiveness in the Twenty-First Century Act of 2000, which increased the ceiling to 195,000 and exempted certain employers, including universities and research centers, from the new numerical limits.

Last year the dot-com bubble burst and as with many other things the fortunes of the IT industry came tumbling down. While no evidence has surfaced to support any claims, there are those who insist that H-1B visa holders are the last to be fired. Others insist that H-1B visa holders are being singled out for layoffs in new anti-foreigner mind set occasioned by the terrorist attacks of last year. The truth probably lies somewhere between these positions

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