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Tech companies file $350M lawsuit over H-1B visas

A lawsuit filed in late January accuses the U.S. Citizenship and Immigration Services (USCIS) of overcharging technology companies fees for H-1B visas. The suit seeks $350 million in refunds, but a victory for the tech companies could be even more costly for the government.

The lawsuit, filed in federal court in the District of Columbia, says the USCIS has overcharged companies for the past six years. In addition to the refund, the companies ask the court to suspend visa denials that were based on the nonpayment of the fee.

Four tech companies take part in lawsuit

The businesses bringing the lawsuit are “50/50” companies, which are those with a minimum of 50 employees, and at least 50% of their workers have H-1B or L status. The companies suing are:

  • ITServe Alliance, Inc. of Dallas, Texas
  • iTech US, Inc. of South Burlington, Vermont
  • SmartWorks, LLC of Edison, New Jersey
  • Saxon Global, Inc. of Irving, Texas

Suit likely hinges on the meaning of application for admission

Observers say the lawsuit will succeed if the plaintiffs convince the court that a $4,000 fee for H-1B visa holders who change status while inside the United States is unlawful. The companies argue that fee can only be charged when an H-1B worker enters the country.

The decision likely rests on how the court interprets the phrase: “application for admission.” The companies contend that the Immigration and Nationality Act holds that the term refers to the application for admission to the U.S. and not to the application for receiving an immigrant or nonimmigrant visa.

Plaintiffs ask for two remedies

In their lawsuit, the tech companies ask that the $4,000 fee for H-1B change of status petitions should be ruled unreasonable and illegal. They also seek refunds for all 50/50 companies who have paid the fees since 2014, which is estimated at $350 million. If they are successful, it would be the first time the USCIS would have to write a check to tech companies.

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