Few issues generate more passion these days than the controversy surrounding H1-B visas. Many U.S.-born engineers, including those who already have been displaced or consider themselves vulnerable to displacement, say the program costs countless American engineering jobs. Yet corporate OEM executives say their businesses, and the competitiveness of the American technology industry as a whole, depend on a deep pool of engineering talent, including workers from other countries. But is there any legitimacy to the argument that the presence of H-1B workers suppresses the wages of American electronics professionals?
The growing popularity of H-1B visas, which let employers fill specialty occupations with foreign workers, continues to be a contentious issue within the high-tech community. To ensure that American workers aren't adversely affected, employers are required to meet certain labor conditions, including paying H-1B workers wages comparable to those of U.S. workers in similar positions and locations.
The Department of Labor's Wage and Hour Division is responsible for ensuring that H-1B workers are actually filling the role listed in the employer's application and receiving the required wages. U.S. industry spokespeople say repeatedly that H-1B visa holders are paid the same wages as similarly qualified American citizens. Numerous studies and reports, though, suggest otherwise:
- According to documents filed with the U.S. Department of Labor (DOL), immigrant engineers with H-1B visas may be earning up to 23% less on average than American engineers with similar jobs.
- A General Accounting Office report showed that some employers said they hired H-1B workers in part because these workers would often accept lower salaries than similarly qualified U.S. workers. However, these employers also claimed they never actually paid H-1B workers less than the required wage.
- A report from the Center for Immigration Studies found that in spite of the requirement that H-1B workers be paid the prevailing wage, H-1B workers earn significantly less than their American counterparts. For example, 47% of applications for H-1B computer programming workers were for wages below even the prevailing wage claimed by their employers.
According to IEEE-USA vice president Ron Hira, the whole concept of "prevailing wages" is useless 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 says. "This is another myth of the H-1B program, that prevailing wages are the same as market wages."
A review of the DOL's 2005 database of Labor Condition Applications (LCA)—the form employers must complete to verify their responsibilities for wages, working conditions, and benefits—confirms that employers are regularly allowed to pay H-1B workers wages that are well below market rates. That's because, under the 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." But despite the law's clear intent, Hira points out that companies can easily circumvent the "prevailing wage" requirement by:
- Selecting a survey source with the lowest salaries
- Misclassifying an experienced worker as entry level
- Giving the person a lower-paying job title, rather than one that legitimately reflects the work to be performed
- Citing wages for a lower-cost area of the country and then sending the employee to a higher-cost area.
In addition to being able to exploit these loopholes, companies using H-1B workers have almost no chance of ever being investigated. And even if they were investigated, these loopholes are so large that most employers would likely escape unscathed since they're following the letter of the law, if not its spirit.
It's important to note that the DOL uses an automated review process to look for missing information or obvious inaccuracies on LCAs. Human beings rarely, if ever, look at the applications. This limits the likelihood that a wage discrepancy will be discovered or investigated. Also, if the Department of Homeland Security (DHS) finds that an H-1B worker's income on his or her W-2 form is less than the wage claimed on the original LCA, it does not have a way to report the discrepancy to the DOL.
"It's a self-policing system that is never actually checked," Hira points out. "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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