WASHINGTON (6 September 2006)
industry spokespeople say repeatedly that H-1B
visa holders are paid the same wages as
similarly qualified American citizens. Numerous
studies and reports, however, have found this to
Consultancy Services (TCS) Vice President Phiroz
Vandrevala even admitted that his company enjoys
a competitive advantage because of its extensive
use of foreign workers in the United States on
H-1B and L-1 visas.
wage per employee is 20-25 percent lesser than
US wage for a similar employee," Vandrevala
said. "Typically, for a TCS employee with five
years experience, the annual cost to the company
is $60,000-70,000, while a local American
employee might cost $80,000-100,000. This (labour
arbitrage) is a fact of doing work onsite. It's
a fact that Indian IT companies have an
advantage here and there's nothing wrong in
that. … The issue is that of getting workers in
the U.S. on wages far lower than local wage rate."
("U.S. visas are not a TCS-specific issue,"
Businessworld (India) magazine, June 2003)
IEEE-USA President Ralph W. Wyndrum, Jr. said
proposals now before Congress to raise the H-1B
visa cap should be scrapped until significant
workforce protections for U.S. and H-1B
employees are instituted.
paying market wages to H-1B holders is unfair to
both foreign and domestic high-tech workers,"
Wyndrum said. "H-1B employees are being taken
advantage of, and some U.S. workers' salaries
are likely suppressed by the influx of thousands
of additional job competitors. The wage problem
is one symptom of how deeply flawed the H-1B
Findings showing H-1B holders earning less than
the market wages paid to U.S. technology workers
"Immigrant engineers with H-1B visas may be
earning up to 23 percent less on average than
American engineers with similar jobs, according
to documents filed with the U.S. Department of
Labor (DOL). Salary data from Labor Condition
Applications (LCAs) lends credence to arguments
that lower compensation paid to H-1B workers
suppresses the wages of other electronics
professionals." — EE Times (June 2006),
which calculated average H-1B salaries from LCAs
and compared them to the Bureau of Labor
Statistics' Occupational Employment Statistics
survey of employers. See
"In spite of the requirement that H-1B workers
be paid the prevailing wage, H-1B workers earn
significantly less than their American
counterparts. On average, applications for H-1B
workers in computer occupations were for wages
$13,000 less than Americans in the same
occupation and state."
"Applications for 47 percent of H-1B computer
programming workers were for wages below even
the prevailing wage claimed by their employers."
— Center for Immigration Studies report (Dec.
(under Key Findings).
"Some [H-1B] employers said that they hired H-1B
workers in part because these workers would
often accept lower salaries than similarly
qualified U.S. workers; however, these employers
said they never paid H-1B workers less than the
required wage." Government Accountability Office
report (September 2003). See
www.gao.gov/new.items/d03883.pdf (p. 4).
According to IEEE-USA Vice President Ron Hira,
the concept of "prevailing wages" is worthless
as a safeguard for U.S. and H-1B workers.
"Proponents of the H-1B program say that by law
H-1B workers must receive prevailing wages, but
this is a legal façade so full of loopholes that
it is frequently gamed by employers to pay
below-market wages," Hira said. "This is another
myth of the H-1B program, that prevailing wages
are the same as market wages."
review of the DOL's LCA database for FY 2005
shows some of the well-below-market wages
employers have been certified to pay H-1B
workers. For example, Teja Technologies received
permission to pay a software engineer $10,900.
Infosys Technologies was authorized to pay a
programmer analyst $20,030. TCS was certified to
pay a computer programmer $20,571, and Syntel,
Inc., was permitted to pay a computer programmer
Under law, U.S. employers have three options for
determining an H-1B employee's prevailing wage.
According to the DOL, an employer can request a
"prevailing wage determination from the
appropriate State Workforce Agency;" use a
"survey conducted by an independent
authoritative source;" or use "another
legitimate source of information."
Despite the law's intent, Hira enumerated a few
ways companies circumvent the law's prevailing
wage requirements when hiring H-1B workers:
selecting a survey source with the lowest
misclassifying an experienced worker as
giving the person a lower-paying job title
than one reflective of the work to be
citing wages for a low-cost area of the
country, then sending an employee to a
reason it is so easy for employers to underpay
H-1B holders is because they know how to exploit
the loopholes and have almost no chance of ever
being investigated. Even if they were
investigated, the loopholes are so large most of
the employers would likely be found following
the letter of the law. First, DOL's automated
review of LCAs is limited to looking for missing
information or obvious inaccuracies; no human
looks at the applications. Second, if a
Department of Homeland Security (DHS) review
finds that an H-1B worker's income on the W-2
form is less than the wage on the original LCA,
DHS does not have a way to report the
discrepancy to DOL.
"It's a self-policing system that is never
actually checked," Hira said. "The law itself is
written in a way to invite exploitation. It
should be no surprise that firms take advantage
of the loopholes."
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