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Darrell Issa, R-Calif., is one of two sponsors on an H-1B reform bill. He’s pictured here at a House Republican Conference meeting in 2015.Bill Clark/CQ Roll Call via Getty
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President-elect Donald Trump is just a week away from taking office.
From the start of his campaign, he has promised big changes to the US immigration system.
For both Trump’s advisers and members of Congress, the H-1B visa program, which allows many foreign workers to fill technology jobs, is a particular focus.
One major change to that system is already under discussion: making it harder for companies to use H-1B workers to replace Americans by simply giving the foreign workers a raise.
The “Protect and Grow American Jobs Act,” introduced last week by Rep.
Darrell Issa, R-Calif. and Scott Peters, D-Calif., would significantly raise the wages of workers who get H-1B visas.
If the bill becomes law, the minimum wage paid to H-1B workers would rise to at least $100,000 annually, and be adjusted it for inflation. Right now, the minimum is $60,000.
The sponsors say that would go a long way toward fixing some of the abuses of the H-1B program, which critics say is currently used to simply replace American workers with cheaper, foreign workers.
In 2013, the top nine companies acquiring H-1B visas were technology outsourcing firms, according to an analysis by a critic of the H-1B program. (The 10th is Microsoft.) The thinking goes that if minimum H-1B salaries are brought closer to what high-skilled tech employment really pays, the economic incentive to use it as a worker-replacement program will drop off.
The H-1B program isn’t supposed to replace any US workers at all. Rather, it’s meant to help US companies get skilled labor they can’t hire domestically.
But critics of the program say abuse has been widespread and point to examples of high-profile mass layoffs in which American IT workers were sometimes ordered to train their foreign replacements. Last year, the Los Angeles Times reported that Southern California Edison had laid off hundreds of IT workers and filled their positions with workers from two Indian outsourcing firms, Tata Consulting and Infosys. Disney was also accused of replacing American IT workers with H-1B workers from India; two of the Disney IT workers filed a lawsuit against their former employer last year.
“We need to ensure we can retain the world’s best and brightest talent,” said Issa in a statement about the bill. “At the same time, we also need to make sure programs are not abused to allow companies to outsource and hire cheap foreign labor from abroad to replace American workers.”
The H-1B program offers 65,000 visas each fiscal year, with an additional 20,000 reserved for foreign workers who have advanced degrees from US colleges and universities.
The visas are awarded by lottery each year. Last year, the government received more than 236,000 applications for those visas.
End to arbitrage
The case that H-1B has been used as a cost-cutting program was made directly to Congress by Prof. Ronil Hira of Howard University, who testified about the Southern California Edison layoffs. Hira submitted testimony (PDF) claiming that SCE IT specialists and engineers get paid an average wage of $110,466, while H-1B workers at Infosys and Tata get average annual wages of $70,882 and $65,565, respectively.
Hira suggested raising the wages of H-1B workers to “clean up some of the most flagrant abuses.” He also suggested increased enforcement by the Secretary of Labor and random audits of H-1B employers, added safeguards which haven’t yet seen a champion in Congress.
Harj Taggar, founder of tech recruiting firm TripleByte, told Ars in an interview that outsourcing firms’ dominance of the system has discouraged his clients, typically small to mid-sized startups, from participating in the visa lottery.
That could change, though, if minimum wages for H-1B visas are raised. Outsourcing firms might find it more difficult to profit from the difference between the market wage and what their workers are typically paid, leaving more visas for others.
“You’ll start seeing Bay Area technology companies say, if the chances [of getting a visa through the lottery] have gone from 5 percent to 30 percent now that there’s less competition, you’ll see more engage in the program,” said Taggar. “If you raise the minimum wage requirement to $100,000, that will still fall below the average that engineers in particular, in particular those who have been working for a few years, will command in salary.”
Reuters reported yesterday that one senior Trump adviser is considering a more radical change to the H-1B system: doing away with the visa lottery altogether and just selling visas to the highest bidder.
The news service reported that Trump seemed open to changing the H-1B system at a meeting last month with top tech CEOs, but he was “searching for a middle ground.” At the end of the day, the president-elect is “not hostile” to the H-1B program, according to one source, but may choose to raise the cost of getting the visas.
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