Debate Over H-1B Visas and Student Work Programs

As discussions intensify online regarding the H-1B visas for foreign workers in the tech sector and migrant labor, a less known aspect—the pathway for student visa holders to join the workforce—has emerged as an alternative for employers seeking more affordable labor.

Essentially, by exploiting tax regulations and legal loopholes, companies employing STEM workers under the optional practical training (OPT) program can sidestep contributions to federal programs like Medicare and Social Security, or at least they don’t pay more taxes than American citizens or legal residents.

This ongoing tension surrounding the immigration system—a system that hasn’t seen substantial changes in decades—places the federal government in a legal gray area, filled with complaints about the tech industry’s reliance on foreign labor.

According to Anne Walsh, a partner at Corporate Immigration Partners, “there is no wage obligation in the same way H-1B is strictly linked to mandatory wages.” However, she adds that OPT participants must receive compensation and conditions similar to their U.S. counterparts.

Popularity of STEM-OPT

The OPT program allows businesses to employ student visa holders for a limited duration while their F-1 visa remains valid, either during or after their studies.

In 2024, approximately 109,661 individuals were employed under the OPT program, with Amazon leading the way by employing 10,167 OPT workers. The University of California system followed, with 2,916, while Google hired 2,454 individuals.

Since its launch in 1992, the OPT program has expanded, particularly through lobbying by USCIS in the 2000s, which increased participant limits and extended the allowable duration.

More than 200 companies have utilized the OPT program, but critics argue it merely facilitates the replacement of American workers with cheaper alternatives.

“Despite not being sanctioned by Congress, the OPT program is one of the top guest worker initiatives,” said Jeremy Beck, co-president of the immigration think tank NumbersUSA. He noted that business advocates promoted the use of OPT as a means to bypass H-1B caps during the Bush administration.

ICE stated that, according to regulations established in 2016, student visa holders predominantly using the program are not required to contribute to Social Security, Medicare, or federal unemployment funds for their roles.

This rule allows employers to save around 7.5% compared to what they would owe for U.S. residents, with other estimates suggesting savings could rise closer to 15%. In the long run, this savings could total hundreds of millions, impacting federal tax revenues.

Concerns over American Workers

In a 2020 report, NAFSA, a nonprofit focusing on international education, expressed skepticism about how the system operates, especially regarding its impact on U.S. employees. Five years later, those concerns have intensified.

Beck stated, “Employers hiring OPT workers over American citizens manage to avoid payroll taxes, essentially providing an incentive against hiring Americans.” He believes this is part of a broader trend to favor exploitable foreign workers.

ICE clarified that altering tax laws remains under Congress’s jurisdiction, not the Department of Homeland Security. They affirmed that the program is still operational under its existing framework.

While there are critics, Walsh claims that many employers consider STEM-OPT a necessary option. “Hiring qualified U.S. workers is often not as straightforward as it seems. Employers must deal with paperwork, ensure proper oversight, and submit reports periodically to comply with regulations,” she explained.

Dr. Fanta AW, executive director and CEO of NAFSA, countered accusations of tax loophole exploitation, stating there is no supporting evidence. She emphasized that U.S. innovation necessitates expertise, especially in STEM areas, where international talent is crucial.

Prospects for Change

Amidst frustrations voiced mainly on social media, many American workers, especially highly educated graduates, feel overlooked while foreign visa holders snag some of the best jobs.

In March, Paul Gosar from the Arizona Republican Party reintroduced legislation aimed at addressing the OPT pipeline. He remarked that the fairness to skilled Americans Act would dismantle the program, claiming, “The OPT program unjustly sidelines American workers, especially recent graduates.” Gosar described employers as “greedy” for relying on tax incentives that encourage hiring foreign workers over domestic talent.

Despite calls for reform from both sides of the political aisle, there’s skepticism about whether these proposals will gain traction, given the fate of numerous immigration initiatives that have stalled.

Beck noted that Gosar’s bill has become a priority in aiming to eliminate the OPT program.

Meanwhile, Walsh’s clients are hoping for clearer avenues to legal residency for the foreign students they employ. “It’s frustrating to see little choice after completing STEM-OPT,” she said. “Businesses seek out this talent not just because they’re foreign workers but because they genuinely contribute to growth and, by extension, help create more jobs for Americans.”