The Department of Labor announced Jan. 12 that it has finalized a rule that would raise the four mandatory wage levels for H-1B workers, in an attempt to prevent abuse of the program by employers.
The new rule, which goes into effect 60 days after it is entered into the Federal Register, also applies to EB-2 and EB-3 visa applicants, H1B1 workers from Singapore and Chile, and E-3 visa holders from Australia. The majority of H-1B visas are held by highly-skilled workers from India.
“The U.S. Department of Labor is taking these steps to strengthen wage protections, address abuses in visa programs, and protect American workers from being undercut by cheaper foreign labor,” said Labor Secretary Eugene Scalia in a press statement.
“These changes help ensure that these important foreign worker programs function as Congress intended, while securing American workers’ opportunities for stable, good-paying jobs,” said Scalia, adding that the rule is intended to bring the wages of foreign workers in line with wages for U.S. workers.
Entry level workers currently in the 45th percentile would jump to the 35th percentile: thus, a $75-80,000 per year wage would increase to about $120,000. Level 4 wage workers, the highest earners, as determined by Occupational Employment Statistics, would make a more modest jump from the 95th percentile to the 90th percentile.
Immigration attorney Cyrus Mehta told India-West: “The Labor Department has tried to be reasonable, but it is still out of whack.”
“They have skewed prevailing wages and artificially inflated them so that employers will have to pay higher than market wages,” he said. Mehta took the example of the pay hike for entry-level workers, which he said was “an unjustified entry-level wage.”
Employers will have to pay more, but the Indian American attorney said he did not expect to see a dip in H-1B applications. “The H-1B quota has always been filled,” he said, noting that even amid the pandemic, unemployment in the tech sector remained relatively untouched, hovering at around 2.5 percent.
President-elect Joe Biden could reverse the new rule, said Mehta, but he noted that even some Democrats support the idea of higher wages and preference for higher wage earners. The Trump Administration announced earlier this week that it was gutting the H-1B lottery system and instead prioritizing the applications of Level 4 wage workers, the highest earners, as determined by Occupational Employment Statistics. (See earlier story: https://bit.ly/2XBirPZ)
When seeking visas for workers in the above-mentioned categories, employers must confirm that they will pay the higher of the prevailing wage or the actual wage paid to other employees with similar experience and qualifications, stated the Labor Department in the new rule.
The new rule was issued one month after the Labor Department lost a lawsuit on a similar rule. The lawsuit was brought about by the U.S. Chamber of Commerce and the Bay Area Council. Northern California U.S. District Court Judge Jeffrey White, who issued the ruling, stated: “The history of the United States is in part made of the stories, talents, and lasting contributions of those who crossed oceans and deserts to come here.”
Sean Randolph, senior director of the Bay Area Council Economic Institute, told India-West after the ruling: “It’s pretty blatant what the Trump administration has attempted to do. For the past four years, they have been trying to reduce immigration in all forms.”
Demand for tech workers has increased during the pandemic as online goods and services companies have rapidly grown amid shelter-in-place orders mandated throughout most of the U.S.
Business immigration will not be the new administration’s first priority, amid the pandemic, and a deep economic crisis, said Randolph in the earlier interview. But he added that Biden has made some positive comments about international talent.
However, the “Buy American, Hire American” ethos of the Trump administration is likely to remain.