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Salary Requirements for H-1B Visa: Pros and Cons of H-1B

Marketwatch.com recently reported that Bill Gates, chairman of Microsoft, appeared in front of Congress, which was weighing the pros and cons of H-1B workers. Gates advocated more H-1B visas to lure foreign workers to the U.S. because these "workers are uniquely talented" and are “taking jobs that pay over $100,000 a year.” According to the New York Times, the Microsoft median annual salary is $82,500 for new H-1B work visa applicants. A Microsoft H-1B work visa holder, after a few years, could earn $100,000/year. This far exceeds the typical salary requirements for H-1B visa holders.

By law, the salary requirements for H-1B visa holders call for their pay to be "equal to 100% of the prevailing wage as established by the Department of Labor, or the actual wage paid by the employer to similar employees." However, $82K-100K is not usually the H-1B salary in IT jobs, according to a study by Ronil Hira, an assistant professor of public policy at the Rochester Institute of Technology. Hira says the median salary is about $50K for new H-1B work visa holders in IT. As mentioned on workinglife.typepad.com, Hira also believes that the real problems go far beyond salary minimums for H-1B visa holders.

How does your salary compare to the salary requirements for H-1B visa holders? Find out with our salary calculator.

H-1B Visa program, competition of another kind

When it comes to the H-1B program, Hira says IT companies have another agenda. He claims that many IT firms are using the H-1B visa law to speed up the outsourcing of computer work to foreign lands, such as India. Here’s how the scheme reportedly works. An IT company uses an H-1B work visa holder to do on-site work in the U.S., trains the worker on the company’s needs and then ships the H-1B work visa holder back to India, along with most of the software coding work.

Hira says, “Information technology offshore outsourcing has just swamped the H-1B program in recent years." According to an article written by Hira in the Economic Policy Institute, the most recent government data shows that the top 10 companies requesting the H-1B work visa in fiscal 2006 were mostly Indian-based technology outsourcing firms such as Tata Consultancy Services, Infosys Technologies, and Wipro Technologies.

Will information technology improve business for the 21st century?

Here is the smoking gun, according to Hira. The H-1B work visa has been used by many immigrants as a step to become a permanent resident. In the past, about fifty percent of all immigrants with an H-1B work visa eventually gain green cards. However, the outsourcing companies seeking thousands of H-1B work visas are requesting relatively few green cards, according to government figures. Thus, the ratio is suspiciously out of whack.

In fact, the ratio for the leading Indian outsourcing companies was less than 1 percent. In other cases, companies ask their U.S. employees to train H-1B workers who then replace them at lower pay. Hira says, “This is euphemistically called, ‘knowledge transfer.’ I call it, ‘knowledge extraction.’” Hira is not the only one. Kamal Nath, the commerce minister of India, says that the H-1B program has “become the outsourcing visa.”

Possible Changes to the H-1B Visa Program

While some corporations want to double the amount if H-1B Visas, some in Congress want to tighten the rules to help U.S. workers. The H-1B and L-1 Visa Fraud and Abuse Prevention Act of 2007 was recently introduced to Congress by Senators Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa). The two lawmakers say the proposed bill would authorize the Department of Labor to hire 200 additional employees "to administer, oversee, investigate and enforce the H-1B program."

The H-1B bill would also enable the Department of Labor to conduct random audits of companies that use H-1B visas and give the agency more authority to investigate H-1B applications. The Senators say their proposed legislation would give the Department of Labor the power to check applications for "clear indicators of fraud or misrepresentation of material fact" and double the review period from 7 to 14 days. Companies would also be required to advertise job openings for 30 days on the Department of Labor's Web site before submitting applications to hire H-1B workers.

Forget about U.S. competitiveness; is your salary competitive? Find out with our salary calculator.

Cheers,

Dr. Al Lee

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