While the IT industry is scared of job losses due to the Trump administration tweaking the rules to mandate higher wages for H-1B visa holders, others feel the move will inject quality into the H-1B program and be good for both domestic and foreign workers.
Ron Hira, associate professor of Public Policy at Howard University, Washington DC, welcomed the administration’s move.
He pointed to his testimony to the Senate Judiciary Committee in 2016 on ‘The Impact of High-Skilled Immigration on US Workers,’ where he said that deploying cheaper H-1Bs to replace American workers is a violation of H-1B law and regulations.
He said many politicians have also championed the hike of H-1B workers’ salaries, from Congressman Ro Khanna to Senator Bernie Sanders.
“The H-1B visa has been oversubscribed and some of the lower-pay-wages employers are deterred because they don’t want to pay higher wages,” Hira told indica News.
He alleged Indian companies often apply for far more H-1Bs than they actually need.
“You know you need 3,000 visas but will apply for 9,000,” he said.
He said the policy decision doesn’t change the numbers, it just changes the composition of the H-1B visa holders.
“It increases quality. Now you will get higher quality H-1B of course,” he said.
In his presentation to the Senate Judiciary Committee in 2016, Hira said that at Microsoft, one of the most vocal companies about needing H-1Bs, 56 percent of its H-1B hires hold no more than a bachelor’s degree, and only 5 percent hold a doctorate.
“So, it’s [the new rules are] good for the foreign workers, the H-1B workers and it’s good for the US economy. Now certainly, certain sectors like the IT outsourcing won’t do that well, but they will adopt,” he said.
Asked if companies would offshore the jobs, Hira did not agree.
“No, I think it’s a big misunderstanding. The business model is such that if they could offshore the work they have access to do so.”
“The thing is they have already have maximized the amount that need to be offshored. It may be in some instances, but we’ll see more jobs will stay in the US,” he said.
California-based attorney Chad Blocker, partner at Fragomen in Los Angeles, told indica News that the wage-hike rule will disproportionately impact smaller companies and has the potential to impact even larger companies.
“Normally, when the government is proposing new rule there is a notice period where they provide what they are going to provide in the ruling and provide-comment period. But they have bypassed that process here,” said Blocker.
“And the rule taking an immediate effect, that means the business community has no time to analyze what it would mean for the compensation structures.”
“It’s a very impactful rule, “ he said and pointed the level 1 wage is equivalent to level 3 wage now.
Though the rule does allow the employer to continue prior alternative wages, “but if you are renewing H-1B visa it could impact that and there are thousands who need renewal,” .
Asked about allegations of abuse of the H-1B visa, Blocker said: “I don’t see abuse of the H-1B program. I think employers take the responsibility seriously, so I think that this is a kind of ‘buy American, hire American’ theme.”
The new rules, Blocker said, are “making things complicated and the business community requires some study on how to go forward.”
He also expected the administration move would be challenged in court.
“We are expecting some litigation to follow shortly. There is a lot of sentiment and it is pretty strong; court will disagree with the way the DHS issued these rules. They’ve violated the federal law,” Blocker said.
Sarah C Pierce, policy analyst, US Immigration Program, Migration Policy Institute, told indica News that the Trump administration’s moves are likely hinting that they will soon extend some legal obligations to the third-party sites where H-1B employees work (or the “secondary employers”).
When indica News asked KV Kumar, president & CEO of the Indian American International Chamber of Commerce representing over 5,000 businesses, if they saw the this coming said they were not sure it would happen this fast.
He said they were working with the government on what can be done on the wage hike.
However, Kumar also lamented that the administration’s moves are the result of visa abuse by some companies for which the rest have to pay the price.
“Some people have misused [the H-1B program] and because a few people misused it affects everybody. We have an obligation to do things properly,” he said.
If the outsourcing companies get good money they should not pay less to the employees. “They make enough profit and should treat employees well,” he added.