New legislation for H-1B visa reform will raise to $100,000 a year the minimum wage requirement for the H-1B visa program. In the meantime today, April 3, the Department of Labor will start distributing another 85,000 H-1B visas to companies, as required by law with the existing program.
Presented by Representative Darrell Issa (R-CA) and supported allegedly by Donald Trump, the new law is named “Protect and Grow American Jobs Act” and is designed to keep U.S. corporations from replacing Americans workers with outsourced labor.
The new legislation will also eliminate a provision which currently allows for business to apply for waivers for applicants that do not have a master’s degree. IT firms, mostly based out of India, would be hurt by the reform. Several U.S. IT corporations would also need to pay higher wages for many of their technical staff. Every year, some 85,000 foreigners apply for H-1B visas, most of them coming from India. The Trump Administration has no plan to change this quota, at least this fiscal year
Academia would also be affected. Goldman Sachs estimated that nearly a million foreigners on H-1B visas are working within the American university systems.
The Abuse of the Current H-1B Visa Program
Demand for reform come from extensive abuse and fraud plaguing the current program. Jack Palmer, an H-1B program whistleblower, claims that abuse “is rampant in every state and in every city.” Initially, the program was designed to bring in the best and brightest and to create jobs. But it has been manipulated in many cases to replace American workers with younger, cheaper, foreign workers.
After working for a company for 20-25 years, many Americans in science and technology earn an average of $130,00-$140,000 per year. They can be replaced by foreign H-1B workers for $40,000-$50,000 a year. These foreigners often don’t even know the job and use fake resumes.
Palmer previously worked for the India-based outsourcing and consulting company Infosys. After discovering information indicating Infosys had violated U.S. immigration laws and committed visa fraud, Palmer filed a lawsuit against the company in 2011. He accused them of finding “ways to creatively get around the H-1B limitations and process to work the system to increase profits and the value of Infosys’ stock.”
Other high-tech companies have been involved in more recent scandals.
Dynasoft Synergy’s CEO Jayavel Murugan, 46, and 40-year-old Syed Nawaz are accused of trying to apply for H-1B visa workers using fraudulent documents and then hiring them out to tech firms. According to prosecutors, Murugan and Nawaz used the false documents to replace American workers at Stanford University, Cisco, and Brocade. They are charged with 26 counts including H-1B visa fraud, using fraudulent documents, mail fraud, identity theft, and conspiracy to commit visa fraud.
The Push to Rather Increase the Quotas
Companies like IBM, Disney, Microsoft, and Facebook all ask Congress to increase the number of H-1B foreign workers brought into the U.S. every year. This reduces the average wage and employment opportunity in high tech fields, pushing Americans to choose for other careers. Three economists, Gaurav Khanna from the University of California, San Diego, plus John Bound and Nicolas Morales, from the University of Michigan, have analyzed the effects of the H-1B program in the technology sector between 1994 and 2001.
They state that wages would be 2.6% to 5.1% higher without the H-1B visa program and employment of U.S. workers would be 6.1% to 10.8% higher. They comment as follows:
“In our model, immigration also raises profits in the IT sector. It is then no surprise that Bill Gates and other IT executives lobby in favor of increasing quotas for high-skill immigrants.”
Not a Priority for the White House
The White House plans to link the reform of the H-1B program to a larger immigration reform plan. It is not an immediate priority. Apparently, they don’t want to alienate the Indian government which has strongly opposed to any immediate reform. And they don’t want to extend the fight already going on with high-tech companies on the travel ban.
Still, some actions are being taken by the administration to rein in the program.
The Department of Justice has filed a brief in the Washington DC court of appeals seeking a 60-day freeze in a case involving employment authorization for H-4 visa-holders, who are primarily dependent spouses of H-1B visa-holders.
Indian Companies Get the Message
Thousands of Indian spouses come in this category. In February 2015, the Obama administration issued a rule allowing employment of eligible spouses while the H-1B visa-holder awaits his/her green card.
The matter is being fought in court, but it is clear that the new Administration wants to put pressure on Indian companies and they are getting the message.
India’s top software services company has already stated it will hire in the USA.
Infosys and Tata Consultancy will hire more engineers from campuses in the United States.
Infosys has also decided not to apply for an H-1B for junior employees.
USCIS Wins a Legal Battle on the Lottery
A legal case had been filed by two companies in the US challenging the lottery system currently used for H-1B visa. The USCIS receives more applications for H-1B visas than the Congressionally mandated limit of 65,000 in the general category and another 20,000 for those foreign students who have masters or higher degree from a US academic institution.
US District Court Judge Michael Simon recently upheld the USCIS’s argument that an H-1B visa application is not considered as filed unless a lottery determines it.
“Because Congress left to the discretion of the USCIS how to handle simultaneous submissions, even if petitions are considered ‘filed’ immediately upon delivery, the USCIS has the discretion to decide how best to order those petitions,” the judge said.
Therefore the USCIS will conduct a computerized draw of H-1B applications as usual. Therefore minor changes for the time being, while a major reform is due in the future.