H-1B wage hike sparks IT job-loss fears


Sanjay (name changed), a software engineer, says he feels lucky that in January this year he got his H-1B visa renewed for the next three years but many of his friends fear their consulting company won’t extend their H-1B visas given the increase in wages announced by the Department of Labor October 6.

Sanjay, who works at a major Indian software company, told indica News:Thank god I am safe, but I am not sure about the future.”

Asked if it wasn’t good news that salaries would be hiked, Sanjay laughed: “Employees won’t pay. We will lose jobs.”

The new rules have evoked strongly polarized reactions. While many have welcomed the move to hike salaries, there are many who fear that the whole IT industry will have to reorganize and it will be disruptive to the community.

Sanjay, however, was hopeful that the Trump administration’s moves would be challenged in court.

According to the Department of Labor, the hike in wages was determined after an extensive review of the Permanent Employment Certification, H-1B visa programs.

The H-1B visa program allows employers to temporarily employ foreign workers in the United States on a nonimmigrant basis in specialty occupations.

A specialty occupation requires the theoretical and practical application of a body of specialized knowledge and a bachelor’s degree or the equivalent in the specific specialty (for example the sciences, medicine, health care, education, biotechnology, and business specialties, etc).

Current laws limit the annual number of qualifying foreign workers who may be issued a visa or otherwise be provided H-1B status to 65,000 with an additional 20,000 under the H-1B advanced degree exemption.

The Department of Labor stated October 6 that the existing wage methodology leads to potential abuses of these programs that in some cases undermine the wages and job opportunities of US workers.

These harms are exacerbated by the recent effects of the coronavirus public health emergency on the US labor market, and require immediate corrective action, according to the administration.

ITServe Alliance, a coalition of over 1,400 mid-size IT consulting companies in the US told, indica News the new rules — and the wages-hike directive in particular — would kill their business.

Tejas Shah, partner at Barnes & Thirmburg LLP, Chicago, told indica News that what the Department of Labor has proposed is to fundamentally change the way prevailing wages are calculated, resulting in significant increases to Level 1, 2, 3, and 4 wages.

Shah said it will affect any new LCAs that are filed in connection with H-1B applications on or after October 8th and prevailing wage requests in connection with green card applications that are pending as of October 8 or filed on or after October 8.

I anticipate that a lawsuit will be filed to block the changes and, given the abrupt/significant nature of these changes without any meaningful opportunity for public comment, they will be blocked by a federal court,” Shah said.

Unfortunately, it is likely that these rules will remain in effect at least for a few weeks while judicial challenges wind their way through court,” he added.

This is another example of the administration using politics to drive its decisions rather than focusing on good policy.”