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."