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"Protect & Grow" Targets H-1B Employers & Wages

Bridge Team Member

The House Judiciary Committee has approved legislation intended to reform the high-skilled H-1B visa program. The bill, entitled the Protect and Grow American Jobs Act (H.R. 170), was approved on Nov. 15, 2017 and its stated intention is to: help prevent the outsourcing of American jobs.

Because of how new this legislation is, it’s difficult to say exactly how passage of the bill could affect employers who are dependent on H-1B workers. However, it’s important to keep in mind that, at the time of reporting, this bill is not law.

Protect and Grow was introduced by the chairman of the Subcommittee on Courts, Intellectual Property and the Internet, Darrell Issa, R-Calif., and, at the time of reporting, it remains just that – a bill that’s been reported out of committee. It must now pass in identical form through both the House and Senate before it lands on PresidentTrump’s desk.

Prevailing Wage v. Undermining Wage

The Protect and Grow legislation’s proposed changes to the H-1B program are intended to prevent those employers who rely on H-1B workers from “undermining the wages of American workers” by bringing in foreign employees to replace them at lower salaries. One standard set by the H-1B visa program itself, however, is that H-1B workers must be paid the prevailing wage for the work they do. In other words, H-1B workers must be paid wages that at least match the wage level that employers would pay other workers with similar qualifications and experience.

The Pew Research Center’s recent analysis of U.S. Citizenship and Immigration Services (USCIS) data for fiscal year 2016 found that U.S. employers planned a median salary of $80,000for their high-skilled H-1B employees. It’s been difficult to monitor such salary statistics because this is the first time the U.S. government has made the information available to the public.

This median salary of $80,000 for H-1B employees slightly exceeds the median salary of $75,063 reported for U.S.workers in computer and mathematical occupations – fields that 60 percent ofH-1B applicants seek employment in. Many topH-1B employers pay much more than median wage to their H-1B workers. Statistics indicate that most employers highly value this nonimmigrant talent pool and are not in the business of funneling in cheap labor.

Consider USCIS Fraud Statistics

It’s interesting to note that the latest comprehensive USCIS fraud and compliance assessment related to the H-1B program (2008) doesn’t significantly strengthen the notion that rampant fraud is afoot. Here’s an overview of some of the report’s key findings:

     - Those firms with 25 or fewer employees have higher rates of fraud

     - Firms with fewer than 10 years in business have higher incidence of fraud

     - H-1B positions that aren’t related to math and technology are more likely to have higher fraud rates

The larger, well-established H-1B dependent employers – employers that the Protect and Grow bill has focused on for reform – don’t factor prominently in these statistics.

What Comes Next?

The problem with the current H-1B visa program, as perceived by Protect and Grow, is that the pertinent regulations were adopted in 1998 and aren’t keeping up with current realities.These regulations span several important and interrelated themes:

    1) Companies that are H-1B dependent (15 percent of their workforce is comprised of H-1B workers) must recruit U.S. workers before petitioning forH-1B workers and must first hire all those Americans who both qualify and apply

    2) H-1B dependent Companies mustn’t lay off U.S. workers and replace them with H-1B workers (within a specific timeframe of the H-1B workers’ employment)

    3) Either of the first two regulations can be avoided if the H-1B workers in question will earn at least $60,000 annually or have at least a master’s degree

Because the $60,000 benchmark hasn’t been updated since 1998, the Protect and Grow bill’s proponents point to it asa regulatory loophole.

The new bill would demolish any exceptions to the regulations against swapping out H-1B workers for American employees and would lengthen the policy against American worker layoffs for the pendency of the H-1B workers’ employ. Finally, the Protect and Grow bill completely revamps the outdated salary requirement by implementing both a salary floor of $90,000 and a requirement of at least the average wage for the specific occupation, which already seems fairly well covered in the prevailing wage requirement.

Employers of H-1B workers, stay tuned! We’ll bring you updates as this bill makes its way through Washington.

Disclaimer: Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult a Bridge-affiliated partner attorney or another qualified legal professional.

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