What's keeping H1B workers up at night?

What if the H1B pay scale is upgraded to irrelevance?

Of all the omens looming overhead basis the heightened scrutiny of temporary work visas in the first 100 days of the Trump reign, the dominant foreboding is now is about the H1B salary cap.

“Those who are already here are kind of okay, the new crop will have it rough if they increase the base salary to $100,000 or $120,000”, says an H1B worker in New York who has just applied for premanent residence via his employer and has requested anonymity for quotes in this story.

For Trump voters, H1B workers are the Others taking away their jobs/ Reuters

For Trump voters, H1B workers are the Others taking away their jobs/ Reuters

There is general consensus that the clamour against H1B visas has shone light on how the systemic sanctity of the H1B has been sketchy at best on two cardinal principles:
Salaries paid to H1B workers
Educational qualifications / skills of H1B applications and workers.

Taking up the issue of salaries first, not two but three camps emerge easily - employers of H1B workers which means the company that holds the H1B worker’s, the end client and the H1B worker.

Now, the questions:
If the H1B worker is being paid say $ 75,000, is that the rate being paid to the worker or his ‘principal’ who holds his visa. The same question can be asked about a $100,000 pay check.

Do (American) companies care whether it’s an H1B worker or a local doing the job? If the American worker looks at a job ad that says 75,000 and passes it by but an H1B shop is ready with staff at that rate, then there’s a business case for any company, not just American, to get more people at lower rates.

Right now we are not getting into whether America has the people who tech companies need - that requires a separate deep dive.

“You have any idea how much I was being paid when I first came here? $ 40 an hour when my company was making $115 an hour for my work. They kept $ 75 for every hour I put in. I got to know this later, of course,” says a former H1B worker who went back to India after a stint on the US West Coast.

This person was making about $ 49,000 per annum at best while the company was making a decent packet. Straightaway you see how it’s not just about the base salary but about the layers that make the deal viable for all parties - the H1B worker, his employer company in the home country or a body shop in the US plus the end client.

So, when you hear about a worker being paid $60,000, it may just be a smokescreen for a fairly elaborate house of cards.

This is just one kind of layered cake in the H1B world and there are many other arrangements all of which are “allowed by the rules” according to legal experts who deal with H1B on a daily basis.

This is why H1B workers are bracing for any change in the base rate.

One of the most read bills pending in the US Congress - America’s lawmaking institution - is the Darren Issa sponsored HR 170 bill headlined this way: “To amend the Immigration and Nationality Act to modify the definition of “exempt H–1B nonimmigrant””

In its simplest form, the sting in this bill lies in this block of text:

“…the term ‘exempt H–1B nonimmigrant’ means an H–1B nonimmigrant who receives wages (including cash bonuses) at an annual rate equal to at least the greater of $100,000 or the applicable adjusted amount under clause”.

This in turn, derives from the concerns of American lawmakers over the “unintended consequences of the H1B visa” which are explained like this in the HR170 bill:

“The unintended consequences of the H–1B visa program enabled a small number of companies to hire large numbers of H–1B workers relative to their United States worker populations.
In 1998, Congress passed new enforcement provisions to the H–1B program in order to prevent companies from displacing United States workers with lower-cost foreign professionals.
The 1998 revisions defined a new class of H–1B-dependent employers and established addi- tional conditions on their business and hiring prac- tices unless they paid sufficiently high wages.
The 1998 revisions, however, did not index wage requirements to keep pace with wage growth, and, as a result, the strength of provisions designed to protect workers and employers committed to hiring United States workers was reduced significantly.
The purpose of this Act is to close a loophole in the H–1B visa program by requiring H–1B-dependent em- ployers once again to pay sufficiently high wages to ensure the protection of the workforce in the United States and to remove other impediments to proper H–1B visa enforcement.”

Yet, it is also true that not a single word has changed in the original H1B law. Not yet.

“Nothing has changed so far. Trump issued an EO in which there are a few lines on whtat directing his Cabinet dept to conduct studies either to give jobs to American workers or to foreign workers at much higher wages. All that is fine but you cannot really change the law through an executive order. Congress has to change the law and if they have to be minor changes, the regulations have to be tweaked, that requires notice and comment. So the EO does not change anything, things remain the same,” says Cyrus Mehta, a top immigration lawyer based in New York.

Link: The legislative process in the USA

“So many governments have come and gone. Nothing has happened in 20 years,” says a Queens, NY based lawyer who does only H1B related filing.

That’s on paper.

But ask any H1B worker the mood at immigration checkpoints in the USA.

They’ll tell you the world’s most controversial visa is now a pin cushion.


Published Date: May 02, 2017 12:18 am | Updated Date: May 02, 2017 12:28 am

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