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How Outsourcing Companies Are Gaming the H-1B Visa System (nytimes.com)

Posted by Soulskill on from the all-about-the-benjamins dept.

New submitter shakah writes: The NY Times has a straightforward summary of how the H-1B Visa system is being gamed by companies inside and outside of the United States. Particularly interesting for me was their clarification on the argument that "VISA holders have to make prevailing wages, so they won't depress wages." Quoting: "Under federal rules, employers like TCS, Infosys and Wipro that have large numbers of H-1B workers in the United States are required to declare that they will not displace American workers. But the companies are exempt from that requirement if the H-1B workers are paid at least $60,000 a year. H-1B workers at outsourcing firms often receive wages at or slightly above $60,000, below what skilled American technology professionals tend to earn, so those firms can offer services to American companies at a lower cost, undercutting American workers."

7 of 284 comments (clear)

  1. A better idea by alvinrod · · Score: 5, Interesting

    How about H1-B Visa holders get paid 110% of the prevailing wage so that only the companies who seriously need a specialist and legitimately can't find any local talent will hire them. Also, give H1-B holders a ten year window to work in the U.S. that isn't dependent on staying with a single employer. If someone else hires away your H1-B employee, that's your company's problem.

    1. Re:A better idea by nine-times · · Score: 4, Interesting

      Pretty much plan isn't going to work if you allow for blatant rule-breaking. Make it so if you have a "junior apprentice programmer" that has 20 years of experience and is running the project, the company gets fined and the hiring manager risks jail time. Have random audits to confirm people are following the rules. Enforce those rules.

      Besides, if someone is applying for an H-1B visa for a "junior apprentice programmer" on the basis that they need a specialist that isn't available in the US population, that application should be rejected on it's face.

    2. Re:A better idea by taustin · · Score: 4, Interesting

      Pretty much plan isn't going to work if you allow for blatant rule-breaking. Make it so if you have a "junior apprentice programmer" that has 20 years of experience and is running the project, the company gets fined and the hiring manager risks jail time. Have random audits to confirm people are following the rules. Enforce those rules.

      And watch the auditors start buying expensive boats and cars, and taking long vacations in exotic resorts, because then the game is to get your competitor in trouble with accusations of wrongdoing, true or not.

      There is no rule that can't be gamed. The only benefit to changing the rules is that it forces the game players to learn the new rules. Sometimes, it might even change the winners. But it'll still be gamed, and still to the advantage of those at the top.

    3. Re:A better idea by tempmpi · · Score: 5, Interesting

      The real prevailing wage is hard to check. Companies will just not mention some of the special skills of that person and then they can hire a very skilled person for more than 110% "prevailing wage", when they are really paying 80% prevailing wage. Or they are paying 110% prevailing wage but expecting 200% working hours.

      I think a much simpler solution would be to change the random lottery to a list that is ordered by wage and give the H1B only to people on the top of that list. That would make it hard to abuse H1Bs to drive down wages and give priority to the people that would likely really contribute the US economy. It could also potentially drive up wages for us workers: If companies are required to offer 200k per year to a foreigner with a certain skillset to guarantee him a H1B, then us workers with the same skillset will also notice what their skills are worth and will demand higher wages. And if the lowest wage that still qualified for a H1B is too low, then you just reduce the number of H1Bs.

      --
      Jan
    4. Re:A better idea by Raseri · · Score: 4, Interesting

      We all know that this won't change, and the only vote that matters is the one you cast with your wallet. The actual solution is to not do business with companies that use H1-B workers at all, whether those workers are employees of the company or "contractors" who are actually employed by InfoSys, Tata, and so on. For example, Harley-Davidson got rid of its IT department and contracted InfoSys to do the work. And, of course, InfoSys brought in nothing but Indians for the jobs. Not surprisingly, someone brought a discrimination suit against them, but I don't know how that turned out; more than likely InfoSys bought the judge. H-D can then claim that they just hired InfoSys, and InfoSys is the one hiring the workers. In this way, H-D's hands are clean, legally.

      What we actually need is a comprehensive list of companies that have done this (think Disney, etc), to facilitate boycotting those companies.

      --
      Writhe your naked ass to the mindless groove.
    5. Re:A better idea by Copid · · Score: 4, Interesting

      My proposal is simpler: Just auction off the visas and allow them to be traded on a secondary market. If it's typical to underpay an H1-B holder by $10K per year, that $10K gets built into the price of the visa automatically, removing the incentive. The market price would also be a useful indicator of actual labor shortages (i.e. if companies are paying the equivalent of a $50K per year premium, it's a sign that there really is a shortage of a particular skill set). Having visas with different expiration dates on the market would even provide a skills "yield curve" that you could plot to get in idea of future demand for different skills. It also guarantees that scarce visa slots go to the most valuable workers.

      It wouldn't exactly be a visa at that point so much as fungible work authorization token, but I don't think that would be the end of the world. Markets are very good at solving these sorts of problems.

      --
      An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
  2. Re:A better idea, just needs better implemenation by mileshigh · · Score: 5, Interesting

    How about a flat $50K/year tax payable straight to the gov't? Think of that as a tariff or duty. This would have several advantages:
      - Simple & stupid, can't game a flat fee
      - That kind of revenue wold keep the gov't interested in enforcing the program
      - Makes the process of hiring offshore much more expensive. Remember, the idea is that hiring offshore is supposed to be a *last* resort, so $50K wouldn't deter someone who truly needed a particular skill.
      - Makes it impractical to hire offshore lower-level employees, the kind that we already have plenty of and who are blatantly being replaced with foreigners just to save money.