The Real Facts Behind H-1b Workers

The system allows employers to hire foreign workers and pay them absurdly low wages,  forcing American workers out of jobs.

 

Via the Center for Immigration Studies.

American media, I welcome you to the H-1B cesspool. After decades of neglect, I am happily surprised that Southern California Edison and Disney have drawn new attention to the H-1B program.

I do have one nit to pick. Many of you are referring to “loopholes” and “abuse”. That is entirely incorrect. Disney and SCE show that the H-1B program is working as it designed to work. You need to start looking deeper.

……Congress has designed the H-1B program to allow it to be abused with impunity. Complexity is the means it has used to allow this abuse. For example, it would take one sentence to say “The Department of Labor has the authority to enforce the provisions of this section.” Instead, the statutes go on at length specifying when and when not DoL can enforce the law.

Here’s an illustration: The first step in the H-1B process is for the employer to file a labor condition application (LCA). That is where the employer certifies the prevailing wage, the wage to be paid to the H-1B worker, and to other labor protection provisions. Notice that the employer determines what the prevailing wage is.

And it gets even better. 8 U.S.C. § 1182(n)(1) requires the Department of Labor to approve all LCAs within seven days as long as the form is filled out correctly. The employer can put anything down on the LCA and know that it will be approved. 8 U.S.C. §1182(n)(2)(G)(v) prohibits the Department of Labor from going back and reviewing LCAs later. The whole LCA system is a meaningless paper shuffling exercise.

S.744 (so called “comprehensive immigration reform”) devoted a page to reforming this restriction. It reworded the sentence so that — get this — the Department of Labor would have to approve all LCAs within 10 days as long as the form is filled out; an entire page devoted to doing absolutely nothing. No wonder the bill was over 1,000 pages long.

This demonstrates that Congress knows where the problems are in H-1B, but it is beholden to money interests that want to ensure that H-1B can be abused with impunity.

Another illustration of how H-1B hinders enforcement is that launching an investigation based on patterns of behavior requires the personal approval of the secretary of Labor.

The first problem in the system is that the employer determines the prevailing wage and the employer can use nearly any source for that determination. Prior to 2005, employers used this combined with the restrictions on enforcement to pay H-1B workers low wages. However, in 2004 Congress explicitly changed the law to allow employers to pay H-1B workers absurdly low wages.

Pettifoggers will tell you that H-1B workers are required to be paid the higher of the prevailing wage or the wage paid to similar workers. And golly gee willikers, it says just that right at the top of 8 U.S.C. § 1101(n)(1). That’s enough information for the willful ignorami writing the Wall Street Journal editorial page.

But scroll down to 8 U.S.C. § 1101(p)(4). There you will find that the Department of Labor is required to take an existing wage survey and divide it into four skill level prevailing wages. Notice there is no requirement that the employer pay the H-1B worker at his skill level. Even if there were such a requirement, it would be unenforceable because skill is a subjective measure.

Under this system, employers classify

  • 52 percent of H-1B workers at the lowest skill level, where they command a wage at the 17th percentile for the occupation and location.
  • 30 percent at the next lowest skill level, where they command a wage at the 34th percentile.
  • 12 percent at the next skill level, where they command the median (or actual prevailing wage).
  • 6 percent at the highest skill level, where they command a wage at the 67th percentile.

Notice that H-1B workers are “highly skilled” when industry wants more of them, but those very same workers become low-skilled when determining what they have to be paid.

Also notice that if the H-1B program excluded aliens paid less than the actual prevailing wage, the quota would not come close to being reached.

For example, in Silicon Valley the prevailing wage for a programmer is $93,891. However, an employer can legally pay an H-1B worker $57,179. An employer can save $36,000 a year by going H-1B. It is no wonder that H-1B workers are concentrated in high-wage locations of the country.

When a pettifogger tells you that employers do not use H-1B for cheap labor because the visa cost is so great, compare those costs to the $20,000-plus a year the employer can save on wages.

Also, when an employer tells you that they had to hire H-1B workers because they could not find Americans, try looking up their labor condition applications and compare the wage they claim to be paying to the actual prevailing wage.

The key point is that Congress has affirmatively acted to ensure that employers can pay H-1B workers ridiculously low wages.

Replacing Americans with H-1B workers has been going on at least since 1994.

In 1998, Congress responded explicitly by making it legal for employers to replace Americans with H-1B workers. Under the current law an employer may replace an American with an H-1B worker unless:

  1. The H-1B worker is paid less than $60,000; and
  2. The H-1B worker does not have a graduate degree; and
  3. The employer has more than 15 percent of its total employees on H-1B visas earning less than $60,000 and not having graduate degrees; and
  4. The replacement takes place within 90 days of making the visa petition.

You have to navigate through two levels of misdirection in the code to piece all this together. Congress went to a lot of effort to ensure employers can replace Americans and to hide that fact from the casual reader of the code.

Most visa petitions are filed in April for visas starting with the federal fiscal year in October, so these provisions protect no one. Congress has gone through a lot of effort to ensure that employers can replace Americans.

One of the most hilarious scenes at the Senate hearing on H-1B in March was when Sen. Orrin Hatch (R-Utah) proposed addressing this issue by increasing the $60,000 to $95,000. In other words, do nothing. Senators like Hatch are so subservient to their industry masters that they cannot bring themselves to ban replacing Americans with foreign workers.

The H-1B program is designed to give the shaft to both Americans and H-1B workers. The same bill authorized employers to include charges for “liquidated damages” in employment agreements, to be paid if an H-1B worker quits. An H-1B worker can end up having to pay his employer $10,000 or more if he wants to change jobs.

Read more at the link.  The way these employers abuse the system, and the way our elected representatives refuse to overhaul the thing, makes me sick.

Business as usual in D.C.

One response to this post.

  1. […] Source: The Real Facts Behind H-1b Workers […]

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