I materially agree with Daniel Costa’s op-ed at MSNBC in reaction to President Trump’s announced $100K fee and other measures to reform H-1Bs. Here’s the meat of the op-ed:
First, U.S. employers are not required to advertise jobs to U.S. workers and recruit them before hiring H-1B workers. Employers claim there are labor shortages of skilled workers — often despite evidence to the contrary — but are ultimately not required to test the labor market to see if this is true. Instead, they can completely bypass the U.S. workforce.
Second, the rules for H-1B visas require that those workers be paid a fair wage according to U.S. standards. However, in practice, the rules allow the majority of H-1B workers to be vastly underpaid, earning less than the true market wage for their occupation and location.
Third, the way visas are allocated is problematic: As Bloomberg reported last year, staffing companies that pay the lowest wages allowed by law easily exploit the random lottery system that allocates H-1B visas and eat up a large chunk of the 85,000 visas that are subject to the annual cap. (Another 56,000 visas were issued last year to firms that are not subject to the cap.)
Fourth, lack of federal enforcement has allowed companies to underpay H-1B workers by tens of millions of dollars. While some H-1B workers do possess rare skills that benefit the U.S. economy, most who are admitted are classified as filling entry-level jobs that do not require advanced skills. Because of visa rules, H-1B workers are placed in working arrangements akin to indentured servitude. H-1B rules ultimately subsidize the outsourcing and offshoring of U.S. jobs and even incentivize firms to directly replace their U.S. workers with H-1B workers, who can be legally underpaid compared with the market rate for local workers. Just this week, two prominent senators — Republican Chuck Grassley of Iowa and Democrat Dick Durbin of Illinois — penned a letter calling out the biggest tech employers for laying off thousands of U.S. workers while simultaneously hiring thousands of H-1B workers.
The emphasis is mine. He continues:
There are several clear and simple steps that the Trump administration can take to fix H-1B, if this White House is serious about improving the program and protecting workers. None of these steps involve announcing a large fee that creates chaos and uncertainty: The fee is already in effect, for instance, even though there isn’t even a process or a form yet allowing employers to pay it.
The good news is that the administration is implementing or considering two regulations that could go a long way in curbing employer abuses of the visa. One is mentioned at the end of Trump’s proclamation, which directs the Department of Labor to craft a regulation to raise wage rates for H-1B workers. If a rule is ultimately proposed and the final version requires that H-1B workers be paid at least the local median wage for their specific occupation, it would go a long way to fixing the program.
No reform of the program will succeed without enforcement and companies employing H-1B visa cannot be trusted to follow the rules on their own. My modest proposal for remedying the present debacle would be to a) pay substantial bounties to individuals who reveal H-1B workers who weren’t hired, paid, etc. in conformity with the rules; b) don’t require intent to be proven to find a company in violation; c) increase the penalty for employers violating the rules. I suggest that any employer who skirts the rules should be barred from hiring H-1B workers for five years.
None of that will be enough, either. We really need to start monitoring the use of offshored workers. We have no real notion of the scope of the problem.
As I read more about the H1B Visa “fee”, the more partial I am to it. The purpose of the H1B Visa program is to bring in skilled labor where we have a shortage. The current H1B practice does not achieve that goal. It doesn’t distinguish between high skilled jobs and the low skilled jobs because of the random lottery nature.
A “fee” solves this without a lot of bureaucracy or oversight required. People won’t bring in a low pay/low skilled worker if there is a large fee involved. That will only happen with higher skilled positions.
I doubt the $100K fee level is the right answer. It is just a big, round number that Trump likes to throw out. I think the market should decide the fee through an auction. We have 85,000 H1B visas for auction. Have companies bid on them until the market sets the right level. The places that truly can’t get the talent they need are more willing to pay more to win the auction.
My proposal is simple. Create a portal where employers can bid on the salary for an H1B visa employee. If an employer’s pay too little, the employee can switch jobs.
Let the market decide. Eventually, their pay will rise, and they will become too expensive.
I was required to advertise for positions I was considering for an H1B hire. I had to post the job at the place of employment and also in a public setting per our immigration lawyer. We paid the H1B staff the same as everyone else. The $100k would have just been extra cost for us. If IT folks are paying people less I kind of doubt $100k is enough to matter.
Everything is computerized now. Just require employers using H1B staff to post W-2s for everyone.
Steve
That’s easy to dodge, Steve, and has been for 50 years (when I first learned about it). You post the position internally on a company bulletin board and externally at a source that’s the equivalent of not posting it at all—say, the Anchorage Daily News. Mission accomplished!
What is needed is rigorous enforcement. That doesn’t happen. Any possibility would be recourse. If you apply for a job for which you are qualified, you should be able to sue if the person hired over you is less qualified. That would be one way of providing recourse. Allowing private suits to be filed against companies who hire H-1B workers at below the prevailing wage for the position would be another. There are various strategies.
“On paper, the reforms seem to fix the problems the H-1B’s critics have identified.
“In reality, they don’t. A loophole in the $100,000 fee, combined with a poorly designed lottery update, will make the system worse. The changes barely raise the skill level of recipients, give outsourcers an advantage, and make it harder to hold on to top graduates from U.S. universities.”
https://www.city-journal.org/article/trump-h-1b-visa-fee-immigration-lottery
That’s why I always conjoin reform in the regulations governing outsourcing in discussions of reforming work visas.
IMO regulations begin with reporting. Companies should need to report what they’re outsourcing as such.
One quibble, I believe that a job posting is required for sponsoring a greencard application (or PERM) by employers for their H1B employees, it is not generally required to hire someone for a H1B visa.
In general, the oddities in the proposed regulations is because they are regulations, and are circumscribed by how Congress wrote the Immigration Act of 1990. The $100K fee is not based on Congress delegating to the President rulemaking power in the H1B authorization statute, its based on the Presidential power to regulate entry into the country from Hawaii vs Trump, which locates it in section 212(f) of the INA; a unusual tactic likely because the 1990 INA gives the executive branch no ability to create such a fee — this will be heavily scrutinized by the courts.
Its overdue for Congress to do “immigration reform”, i.e. overhaul the INA act since its over 35 to 60 years old at this point, but immigration bitterly divides the parties so it doesn’t happen. Then ever more parts of it are abused or made non-workable by time and circumstances and we end up with the executive / judiciary taking over.
I think CO makes a good point. Our immigration lawyers made it clear that some of the stuff they would ask us to do was because the rules/laws were poorly written and subject to interpretation and they were recommending the actions they thought to be the safest, most conservative and likely to hold up against executive/judicial activism. Since I keep in touch so far all looks well for the people I hired except for one guy, a Canadian hire, who has run into issues since the current admin came back into office. Guy is a white, male, Jewish, Canadian (speaks English) who trained at a top 10 US university. Seems like the kind of guy we should want here, but even though we scrupulously followed the known rules the current admin seems to want to make it hard on him/us.
Steve