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Draft bill would boost H-1B worker pay for big visa users

Patrick Thibodeau | June 13, 2016
Rep. Lofgren’s proposal, which has not yet been introduced, details pay formula and other visa system changes.

For H-1B-dependent employers, the bill changes the $60,000 salary exemption level to a formula that would raise the minimum to about $130,000, based on the 35th percentile above the median for the most recent national annual wage for Computer and Mathematical Occupations.

H-1B dependent firms pay salaries of at least $60,000 - a figure set in 1998 - to get an exemption from rules that bar them from displacing a U.S. worker. The bill also eliminates the master's degree exemption.

But the legislation also includes what may be a new loophole by excluding workers from this higher wage if their employer has petitioned for permanent residence or a green card.

The bill also eliminates per-country caps on green cards. Employment-based green cards are capped at 140,000 a year, with no more than 7% from any one country. Such a move would help green card applicants in China and India, in particular, who make up the majority of those seeking permanent residency.

Ron Hira, an associate professor of public policy at Howard University, sees a number of problems with the legislation. The high wage required of H-1B dependent firms, such as Infosys, Cognizant and Tata Consultancy Services, may help non-dependent firms, such as IBM and Accenture, said Hira.

All these firms compete in the IT services sector, but non-dependent firms can continue paying the prevailing wage at level 1 for a 40% discount over an American worker, said Hira.

And, he said, visa-dependent firms could develop workarounds. A dependent employer could avoid paying the $130,000 wage by attesting that they won't displace U.S. workers. But Hira suspects affected firms may "figure out ways to meet the letter of the regulations but not the spirit."

Dan Costa, the director of immigration law and policy research at the Economic Policy Institute, believes a more direct approach is possible. "I think it's crazy that they would just create a new, more expensive exemption for replacing U.S. workers, rather than just prohibit altogether the ability of companies to replace U.S. workers with H-1Bs," said Costa.

The visa-dependent firms can apply for green cards for all their workers to get around the dependence status, as well as bring in more L-1 visa workers (another temporary visa used for company transfers). The green card exemption is a "huge loophole," said Hira.

Other strategies by dependent firms could also include merging with non-dependent firms, said Hira.

 

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