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

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."

Comments

A better idea

[alvinrod]

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.

Re:A better idea

[fahrbot-bot]

Have random audits to confirm people are following the rules. Enforce those rules.

Sure, but that requires *more* government -- to enforce those rules and punishments -- and, as we all know, that would be bad and a "job killer", unlike easy access to cheap, foreign H-1B workers ... oh, wait.

Re:A better idea

[tempmpi]

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.

Re:Didn't know that prevailing wage loophole exist

[gstoddart]

Go find another job and give the company the finger.

Companies don't want that, which is why the H1Bs work the way they do ... because that's what industry wanted.

If they're using an H1B to fill jobs they can't find people for, wages should be going up. Instead they're bringing in cheaper labor to drive down American salaries and displace Americans.

If those people had any ability to fight back or demand more, they just might. This way they're exactly what they're supposed to be .. cheap labor with fewer rights.

Seriously, this didn't happen by accident. It was bought and paid for by industry.

Re:A better idea, just needs better implemenation

[mileshigh]

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.

Simple solution

[saigon_from_europe]

As there is currently more visa applications than available visas, the solution can be very simple. Instead of lottery as it is done now, I would simply give visas to companies that plan to pay the highest salary. That would make companies to raise salaries if they really need applicants. That would also solve problems with definition of "prevailing wage" etc.