H1B briefing at White House highlights Infosys, TCS, Cognizant outsize role in lottery

Infosys, Tata and Cognizant quoted in a White House background briefing on H1B visas?

That’s right.

Exhaustive and sharply focused number crunching has gone into Trump’s latest executive order calling for a sweeping review of the H1B visa. India’s top tech companies have been mentioned in a White House briefing where Administation officials made the American case about India’s top companies gaming the H1B lottery system to corner a lion’s share of visas.

Link: Full text of White House background briefing on H1B

Administration officials clarified that this does not amount to a criticism of these companies but of “how the H1B program is run.”

 H1B briefing at White House highlights Infosys, TCS, Cognizant outsize role in lottery

It's springtime for the anti-H1B squad/ Reuters

Every stakeholder in the H1B visa story of 2 decades has a view on the good, bad and ugly side of this temporary work permit and right now the view with the maximum voice share is Trump’s crack team working overtime on the messaging of the H1B overhaul.

The crux of their argument is this: “Just to illustrate a little bit more how the lottery works  -- so some companies oftentimes are called outsourcing firms.  You may know their names well, but like the top recipients of the H1B visa are companies like Tata, Infosys, Cognizant -- they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas.  Which is very different than I think how most people think of the H1B program -- they imagine it for more -- being for -- again, they would think of it as being for skilled domestic work, rather than contract work.”

In other words, a small number of giant outsourcing companies flood the system with applications which naturally ups their chances of success. Take for example a start up which needs 2 H1B workers and puts in 2 applications - what chance does this company have when it’s up against a massive outsourcing gig that applies for 14,000 visas?

Responding to a follow up on why the Indian companies were singled out for mention, the White House response: “No, I mean, these are the top three recipients of H1B visas.  And those three companies are companies that have an average wage for H1B visas between $60,000 and $65,000.  By contrast, the median Silicon Valley software engineer’s wage is probably around $150,000.  So it just illustrates the point that I was walking you through about how H1B visas are awarded -- if you have contracting firms that are not skills employers, that oftentimes use workers for entry-level positions, and they capture the lion’s share of H1B visas.  And that's all public record.”

Top immigration attorney Cyrus Mehta told Firstpost that the definition of low wage is problematic on many fronts. Primarily, he feels that the criticism of low wages that’s being bandied around is not accounting for regional differences. “An employer has to pay the prevailing wage but if the position is junior and you pay the entry wage it’s okay. It is legal to pay that prevailing wage depending on which position you are hiring for.

"A techie in Wisconsin and a techie in Silicon Valley will not be earning the same, there will be a difference. Additionally, a very senior level H1B worker in Wisconsin may be earning less than a junior level person in Silicon Valley,” he told Firstpost. “They’re not factoring in regional differences.”

Mehta spoke in a long ranging discussion on H1B visas after the Trump executive order - you can catch that conversation here.

Mehta’s point about wage levels and seniority did come up in the Q and A at the White House too.

In answer, officials whipped out an armoury of numbers and countered. Although the White House numbers do not answer Mehta’s point, they certainly resonate for Trump’s core vote base:

“…many people will be surprised to know that about 80 percent of H1B workers are paid less than the median wage in their fields.  Only about 5 to 6 percent, depending on the year, of H1B workers command the highest wage tier recognized by the Department of Labor, there being four wage tiers.  And the highest wage tier, for instance, in 2015, was only 5 percent of H1B workers.
“So 80 percent receive less than the median wage, and only 10 percent receive the median wage.  And so only 5 percent were categorized at the highest wage tier of the four wage tiers that are in place for the H1B guest worker visa.  The result of that is that workers are often brought in well below market rates to replace American workers, again, sort of violating the principle of the program, which is supposed to be a means for bringing in skilled labor, and instead you’re bringing in a lot of times workers who are actually less skilled and lower paid than the workers that they’re replacing,” officials said.

Mehta explained that if “median wage” becomes the gold standard, then companies will “have to” start paying that median wage once it is written into law. And that's exactly what the Administration seems to be partially avoiding with their H1B actions so far - more administrative checks and less legislative overheads.

Remember that there are four wage tiers for H1B workers and depending on which city you are calculating for, the wage would change.

Trump has tasked another multi billionaire in his Cabinet - Commerce Secretary Wilbur Smith with the job of submitting a report within 220 days which means roughly around Thanksgiving time in America after which the Christmas season follows and it’s anyway a lean time for government folks. All that is if Ross takes all of 220 days to submit the report.

“Knowing Secretary of Commerce Wilbur Ross, don’t be surprised if some of those recommendations come in well before the 220-day deadline,” White House officials said.

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Updated Date: Apr 23, 2017 02:36:00 IST