Is the H-1B visa lottery rigged against foreign skilled workers?

The annual H-1B visa lottery in the United States, held each April, shapes the lives of hundreds of thousands of aspiring skilled workers. However, with only about 85,000 H-1B visas available each year, competition is fierce, and the odds of success have diminished as application numbers soar.

Recent data obtained by Bloomberg News has exposed how certain companies have exploited loopholes in the H-1B system, effectively rigging the lottery in their favor.

The H-1B Visa Lottery: A Rigged System?

On a recent episode of the Big Take podcast, Bloomberg's investigative journalists Eric Fan and Zachary Mider revealed how outsourcing companies and staffing firms have gained an unfair advantage in the H-1B lottery. "The game was rigged," said host Sarah Holder, summarizing the findings that demonstrate systemic exploitation.


The investigation discovered that some companies, particularly large IT outsourcing firms and small staffing agencies, have been able to flood the lottery with multiple applications for the same employees, significantly increasing their chances of securing a visa. This practice has been facilitated by a loophole that allowed employers to submit numerous applications under different company names or in collaboration with other firms.

Exploiting Loopholes: How Companies Gained an Advantage

Eric Fan, an investigative data reporter at Bloomberg, highlighted how the system's design allowed companies to manipulate the lottery. "If someone wants a visa and they can kind of work with these— a group of these very small companies, they can almost be guaranteed to get one," Fan explained. "And so the chances really skyrocket for people who are willing to work with these kinds of companies that are willing to cheat and kind of budge ahead in the lottery."

The loophole exploitation became especially prevalent after the Trump administration changed the application process in 2020. The new rules reduced the paperwork and costs required to enter the lottery, making it easier for companies to submit multiple entries. According to Bloomberg's findings, between 2020 and 2023, outsourcing and staffing companies received nearly half of all H-1B visas, often using these manipulative tactics.

Impact on the Economy and Workers

The gaming of the H-1B system has significant repercussions. As Zach Mider noted on the podcast, "It's hurting the American economy." According to a 2023 Wharton School study, for every 10 H-1B visas lost by top US multinational companies, nine jobs are moved abroad. The Federal Reserve Bank of Richmond estimated that reducing high-skilled immigrant workers by 10% would shrink the US economy by approximately $86 billion.

Moreover, H-1B hopefuls who play by the rules find themselves at a disadvantage. Sandeep Maganti, an Indian entrepreneur who moved to the US for college, shared his experience of repeatedly losing out in the H-1B lottery despite having a job and sponsorship. "It was really devastating for me," Maganti told Holder. "I was like eight years into the United States, and I still don't have a life which I can rely on or a career that I can rely on."

For those who do receive an H-1B visa through staffing companies, the consequences can be severe. Many workers face low wages, lack of job security, and restrictive contracts. "I've interviewed a number of workers and former workers at these staffing companies," Fan said, "and what they told me was they usually knew full well that staffing companies pay them very little and there's no job security."

Regulatory Changes and Future Prospects

In response to the exploitation of the H-1B system, the US government introduced new regulations last year to level the playing field. The revised lottery process now ensures that each candidate has an equal chance, regardless of the number of entries submitted by employers. According to government data, the number of multiple registrations decreased by 90% in 2023 due to these changes.

Despite these improvements, the H-1B program still faces challenges. Immigration is a very difficult issue for Washington. Efforts to reform the immigration system, including the H-1B program, have consistently stalled in Congress, leaving many unresolved issues.