In a shift from the traditional tech-dominated landscape, recent federal data reviewed by Bloomberg reveals that major banks and telecom firms have become the largest recruiters of new H-1B visa holders between May 2020 and May 2024. Companies such as Citigroup, AT&T, and Capital One have increasingly turned to third-party staffing and outsourcing firms to meet their IT workforce needs.

H-1B Hiring Shifts from Tech Giants to Finance and Telecom

Originally introduced to help U.S. technology companies hire global talent for specialized roles, the H-1B visa program has now seen widespread adoption across industries. The data suggests that nearly half of the 85,000 H-1B visas issued annually are facilitated by staffing agencies rather than direct hires by employers.

Citigroup alone onboarded more than 3,000 H-1B workers over the four-year period—more than established tech players like Nvidia or Oracle. However, most of these workers weren’t direct employees. Instead, they were hired through outsourcing giants like Tata Consultancy Services (TCS), which is currently under scrutiny by the U.S. Equal Employment Opportunity Commission for alleged hiring biases.

In response to Bloomberg’s report, TCS stated, “We strongly deny any allegations of discrimination. TCS maintains high standards of integrity and equal employment opportunity.” Citigroup, meanwhile, emphasized compliance with legal standards, stating, “We rely on highly skilled visa holders to meet specific business needs while complying with all laws and regulations.”

Concerns Over Lottery Exploitation

The investigation also highlights concerns over how some staffing agencies reportedly gamed the H-1B lottery system. These firms allegedly submitted multiple applications for the same candidate under various business entities—an approach that was flagged as fraudulent by U.S. Citizenship and Immigration Services (USCIS) in a 2023 report.

Capital One was among the biggest users of workers hired through such staffing arrangements, reportedly receiving talent via 429 different vendors—many of whom submitted repeated registrations. The company has said it is unaware of any violations by its vendors and will address concerns if any are brought forward by authorities.

Wage Gap Raises Eyebrows

Bloomberg’s analysis also found significant wage disparities. Contract-based H-1B software developers earned a median salary of $94,000, while those hired directly by companies earned approximately $142,000, even when accounting for education and experience.

Critics say the numbers contradict the H-1B program’s stated goal of attracting top global talent. “If it’s truly about securing the best talent, we should be seeing higher wages,” said Susan Houseman of the W.E. Upjohn Institute. Another expert, Ron Hira of Howard University, added that the current setup allows companies to pay the lowest wages permitted under the law, undermining both domestic and foreign workers.

Challenges Faced by Visa Holders

Beyond salary issues, many H-1B visa holders employed through third-party firms face limited job flexibility. Their immigration status is tied to the staffing agency, making it risky to voice workplace concerns or switch jobs. Legal experts note that employment contracts often include arbitration clauses, limiting workers' ability to pursue grievances in court.

Attorney Daniel Hutchinson, who previously represented thousands of H-1B workers in a class-action lawsuit against TCS, explained the vulnerability many visa holders face. That case involved claims of illegal wage deductions and withholding of tax refunds. Though TCS agreed to a settlement in 2013, the company denied any wrongdoing, and the court did not find it liable.