H-1B visa policies favor large companies, study says

American visa policies are discouraging foreign tech workers from working in startups, according to a study from Cornell University and UC San Diego researchers.

The study examined hiring of foreign workers educated in science and engineering at American universities. These workers apply to and get offers from startups at the same rate as U.S. citizens. But they are only half as likely to be hired.

The disparity is important because access to foreign talent gives companies a competitive edge that startups are missing out on, the study said.

"We often see great innovations coming from Google and Apple, but a lot of their innovation is actually from buying startups," said John Skrentny, one of the study's authors. "These startups have trouble accessing the foreign talent our best universities are graduating."

The report was published in the Proceedings of the National Academy of Sciences. Its authors are Michael Roach of Cornell and Skrentny, director of UCSD's Yankelovich Center for Social Science Research.

The employment discrepancy is not explained by foreign workers' preferences for secure jobs or higher pay, the study said. Rather, larger, more established companies have an advantage over startups in sponsoring foreign employees for H-1B or permanent residency visas.

"Startups typically have limited resources and managerial attention, and recruiting talented workers is a major activity for founders," the study said. "This may be particularly challenging for technology startups seeking to hire highly specialized Ph.D.s, as the number of potential employees with the necessary expertise may be small and difficult to find."

Karine Wenger, an immigration attorney who works with both startups and Fortune 500 corporations, said fledgling companies often find the whole process daunting.

"Startups may not even have an HR program, let alone a robust in-house immigration program," said Wenger, who works in the San Diego office of immigration law firm Fragomen.

In recent years, H-1Bs are under "increased scrutiny" under the Trump administration, Wenger said. The federal government is requiring companies to supply more information — and do more paperwork — than in the past.

The study is based on a nine-year survey of 2,324 Ph.D.s in STEM (science, technology, engineering and math) fields, beginning in graduate school. They studied at 39 top American research universities.

Many of the H-1B visas go to IT businesses, said Kevin Carroll, executive director of Tech San Diego, a local technology trade group. Large companies such as India's Tata Consultancy Services scoop up the visas for their projects.