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High-Skill Training: Grants from H-1B Visa Fees Meet Specific Workforce Needs, but at Varying Skill Levels

GAO-02-881 Published: Sep 20, 2002. Publicly Released: Oct 21, 2002.
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In recent years, U.S. employers have complained of shortages of workers with higher-level skills in information technology, the sciences, and other fields. To find workers with these skills, employers often turn to foreign workers who enter the United States with H-1B visas to work in specialty occupations. Despite the recent economic downturn, employers report that they continue to need higher-skilled workers. Congress passed the Workforce Investment Act of 1998 to create a system connecting employment, education, and training services to better match workers to labor market needs. In 1998, Congress passed legislation raising limits on the number of high-skilled workers entering the United States and imposing a $500 fee on employers--which was later raised to $1000--for each foreign worker for whom they applied. Most of the money collected is to be spent on training that improves the skill of U.S. workers. The National Science Foundation (NSF) receives 22 percent of the funds to distribute as scholarship grants to post-secondary schools that distribute the funds as scholarships for low-income students in computer science, engineering, and mathematics degree programs. The grantees operating skill grant programs use the flexibility allowed by the Department of Labor to administer training through a variety of service delivery options to individuals whose skills need to be upgraded, whereas NSF's scholarship grant programs provide scholarships to low-income students for college degree programs. The training offered by the skill grant programs is based on local workforce needs, although sometimes for lower-skill jobs than those filled by H-1B visa holders, and the scholarship program's training is based on national workforce needs and the types of jobs that many H-1B visa holders fill. Although federal initiatives are not coordinated to strategically address high-skill needs at a national level, local skill grant programs increased coordination, though Labor provided limited assistance to enhance these efforts.


Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Labor To ensure that the skill grant program can assess its effectiveness and that information about grantees' successful approaches are shared throughout the program, the Secretary of Labor should implement the new quarterly reporting requirements and expand these requirements to also include information on individual participants and the level of training that is being provided so they can better measure whether the program is achieving its goals.
Closed – Implemented
Labor incorporated reporting on the H-1B skill grants into its automated reporting system called the Electronic Information Managing System, which will expand its ability to collect and analyze data from grantees. Labor has taken the steps necessary to implement this system and is awaiting OMB approval. They expect to have it up and running by November 2004.
Department of Labor To ensure that the skill grant program can assess its effectiveness and that information about grantees' successful approaches are shared throughout the program, the Secretary of Labor should establish ongoing mechanisms to share successful strategies among grantees and encourage networking.
Closed – Implemented
Labor conducted a grantee meeting in December 2003, which was attended by over 200 representatives of the H-1B grant program. Labor also implemented the H-1B Connectivity Initiative that includes an on-line list-serve group of over 300 participants, and is facilitating ongoing conference calls for grantees to exchange information.
National Science Foundation To ensure that the scholarship program improves its ability to attract and retain students to computer science, engineering, and mathematic fields, the Director of NSF should establish mechanisms to share successful strategies and encourage networking among the postsecondary schools that are grantees.
Closed – Implemented
The National Science Foundation (NSF) informally encourages the sharing of successful strategies and networking by referring grantees (postsecondary schools) to each other. Formally, NSF posts grantee contacts and program descriptions on its website. In addition, NSF has hired a contractor to coordinate a meeting of principal investigators, which is being planned for October 2003, in Washington, D.C.
Department of Labor In addition, in a more overarching effort to be responsive to workforce development needs, the Secretary of Labor should be proactive in building a comprehensive approach within the Department and across federal agencies to address high-skill workforce needs across the country.
Closed – Implemented
Labor's Employment & Training Administration (ETA) transferred the H-1B Skill Grant program to the Office of Workforce Investment to better integrate the program with Workforce Investment Act programs. H-1B program staff also convened a work group across ETA program offices to foster communication among programs. In addition, the H-1B program is working with the new Business Relations Group within ETA, which includes linkages to the Department of Commerce, to develop a marketing and outreach strategy. ETA has also increased the involvement of Commerce in the grant application review process, and by having Commerce make a presentation at a bidders conference.

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Foreign workersEducational grantsEmployment assistance programsFederal grantsEmployee trainingLabor forceScholarship programsVocational educationH-1B VisasStudents