IT Employment

Effort to save companies money on H-1B may backfire

In an attempt to stem the tide of too many H-1B petitions and too much company spend, the USCIS is proposing some changes.

In 2009, the government received 163,000 petitions for H-1B slots. The problem was the cap was only 85,000. The overflow lay around, waiting to be filed. Businesses had to spend thousands of dollars in legal fees to file the petitions which, in this case, only meant they would survive a lottery held to make the final selection.

In order to keep this from happening again, the U.S. Citizen and Immigration Services is proposing a new process for filing H-1B visa petitions.  But some critics warn that the government proposal would also create a new way to game the H-1B visa system.

Here is the proposal, according to Computerworld:

Under the proposed rule, employers would initially register electronically by completing a relatively simple form in a process that should take about 30 minutes. The electronic registrations would be used by officials to create a first cut of full registrants. A waiting list would be created if the number of H-1B registrations exceeds the cap limit.

The USCIS says that the "main benefit that will result from this rule is that employers that want to hire an H-1B worker will be able to forgo the time, effort and expense associated with the preparation of a full H-1B petition" and completing U.S. Department of Labor paperwork, "until USCIS notifies the H-1B employer that space exists under the cap."

The problem is that a handful of U.S. employers are the ones who use the majority of H-1B visa numbers every year. The concern is, voiced by The American Immigration Lawyers Association, is that the new system will create a rush of registrations and flood the USCIS with unnecessary or unqualified registrations just so those employers can basically shut out other businesses from getting their valid petitions through.

There has been an attempt by Congress to slow the H-1B petitions coming in by applying a $2,000 fee to each one. However, U.S. Rep. Lamar Smith, (R-Texas), chairman of the House Judiciary Committee, said at a press briefing that he would support doubling the H-1B cap.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

39 comments
gbohrn
gbohrn

I'm a consultant. I've worked contract work at a lot of the big named companies (Intel, Microsoft, etc). I've worked with a lot of H1B visa holders over the years. Irregardless of what some folks here may say, here are the facts. H1B Visa holders get paid significantly less than an American worker for the same work. As others have mentioned, as an H1B Visa holder you are tied at the hip to the company who sponsored you for good or evil so your not complaining or your booted out. Its not hard to grasp that this is high tech slavery. Until folks get their Green card, they are screwed. Several of my best friends are Indian and took them 14+ years to get their citizenship and they all started the H1B visa route and will tell you exactly what I am (1 has a Master's and 1 has a PhD). There are cases where you are looking for very specialized skills and a foreign national may possess those (we hired a person from Africa for a very specialized position that he had his PhD in). Otherwise, for a general software engineer, we as American engineers are being undercut on the average of 30%+. Now does that mean there are no jobs out there. Absolutely not. IT/engineering has been the fastest growing field for 10+ years and will continue. Has outsourcing worked, no. I've worked with groups who wanted to outsource to save money. Most smaller companies run into disaster in this endeavor. Even larger companies have a hard time keeping talent in India. Would have a better time in SE Asia or Eastern block Europe or Russia. Just my 2 cents worth from a someone in the trenches for over 20 years

barrymaur
barrymaur

Currently, foreigners strive to get a degree stamped on their foreheads because any future they have in being paid by a US company is better than anything they can get in their own country. Its human nature. If lawyers are involved in setting up these training requirements and polls, then maybe American lawyers should have their jobs out sourced. If their jobs are already outsourced, then we are screwed and its all over.

jimd
jimd

Didn't the H-1B demand ramp up for the Year 2000 remediation needs?

Uglyfishhead
Uglyfishhead

The US is right now spending your tax dollars to TRAIN people overseas in IT skills and has been doing so for many years. Many who come here work often--not always--like indentured servants because they can't move on and may want to bring their families here. There are websites out there and lawyers that help businesses write their so-called search for American workers so that no American can possibly quality, to meet their so-called legal requirement. Americans aren't greedy. They expect for the cost of living here to be able to have a decent life. I would not expect American wages in, say, India. But it is a different cost of living there. It always amazes me to see so-called third world "poor" people who live in huts but can clearly afford cell phones, clothing, and other items. At the cost of those items here, it would exceed their reported annual income. So, explain to me how that is. Maybe I missed somthing. If Americans are supposedly greed, aren't those people coming here more greedy compared to the average wage at home?

Peekalum
Peekalum

I hope this is not true. If it is, it should be stopped. Anyway, a degree just IMPLIES that the graduate may have the ability to succeed as an IT. It does not guarantee success. I have met people with degrees, foreign and American, that cannot think their way out of a paper bag much less design or implement something that meets specifications. Currently, foreigners strive to get a degree stamped on their foreheads because any future they have in being paid by a US company is better than anything they can get in their own country. Its human nature. If lawyers are involved in setting up these training requirements and polls, then maybe American lawyers should have their jobs out sourced. If their jobs are already outsourced, then we are screwed and its all over. All American businesses should realize that if they outsource their skilled jobs they will lose their technical edge. In addition, the American employees that were laid off cannot afford to buy the foreign made goods offered by these American companies since they are no longer working. It should be realized that the vast majority of foreign made goods are destined for the American market ... and if Americans are not working, then Americans are not buying those goods .... hence global recession. The way out of this is to have a market place and the market place is the USA since the foreign countries are not buying enough of the products destined for the USA. Having American businesses hire American workers in the USA will fix the overall recession problem even if the businesses run around screaming about reduced profits. Think of the American middle class as a Golden Goose that lays golden eggs (know as taxes). To make a profit, businesses are killing the goose by replacing them with foreign workers who do not lay the same kind of eggs as American workers, especially if the work is done off shore. So just bring back the IT and manufacturing jobs into the US and get Americans working again. Once this happens everything will turn for the better the world over.

Peekalum
Peekalum

Back around the turn of the century, businesses realized that, with the internet, it was possible to provide IT services from anywhere in the world for less pay, thus increasing their profit margin. Management and bean counters liked this since IT personnel could now be considered interchangeable cogs, where some cogs were cheaper than other cogs and thus it was possible to throw more cogs at a project, especially if it was in trouble. In the computer world, "cogs" are NOT interchangeable! ... even if they have Masters degrees stamped on their foreheads. Instead of re-hiring the skilled IT people that were laid off, it was decided to bring the troubled projects closer to USA head quarters to keep close track of these projects. Since the projects were now being done by foreign workers, H-1B visas were needed. In essence, entire departments were transferred into the US. Managers of these departments were foreigners and did what all managers do ... which is empire building. Empires are built by seeming to acquire enough work to justify hiring more people, and then splitting your dept and promoting two employees to manage each half and you become a 2nd line manager. By picking the "right" two new managers, they will grow their depts and push you up to 3rd level management. If you look at the departments that are clamoring for more H1-B visas, the majority in the department are foreigners as are their managers. Not surprising, it will be an Indian manager for a predominantly Indian dept and a Chinese manager for a predominantly Chinese dept. Each such manager will lobby for H-1B visas for people from their country. It is also these managers that push their employees into overtime on projects that they committed to. The phrase that is used is "You can get this done by Monday, can't you? You are smart aren't you?" and the poor sap(s) put their shoulders to the grindstone. Being a born here American with years of experience, I said "No way! I'm smart enough to know that it can't be done by Monday because X design is not completed, dept Q input is needed first, Mike is out sick, and 3rd line mgmt is slipping due dates anyway." Naturally, I was put on the manager's sh*t list. The only way that I can think of to fix the problem now is to replace foreign born managers, even if they are US citizens, with experienced American born managers. Or have foreign depts exchange managers. Or limit H-1B visas to Russians only, or English only, or Germans only, etc. Or state that a dept must have 50+% USA born workers. Or a mix of the suggestions. They all are cogs anyway, aren't they?

amendez52
amendez52

I have been working the in IT field for years on end. I don't believe that foreign workers are more or better skilled than US workers. All those companies that want to flood our country with "more or better skilled" IT workers should be made to pay a fee for the recruiting of "cheap" foreign labor. Let???s all work to stop the "invasion" of foreign workers that take US jobs. Let's promote better education in our schools.

bkn2000
bkn2000

"Let's promote better education in our schools" this is the crux of the problem, the US public school systems are breeding grounds for social engineering, sex ed, bullying, rewriting history to appease the political left, etc. The new idea is to "dumb down" the kids to raise the "self esteem" of people who come from families and cultural backgrounds that put little stock in education, but simultaneously these folks have an "entitlement" philosophy. People used to work hard and put in some sweat and tears before moving up economically, now they want it all, and they want it now.

CrispinChapman
CrispinChapman like.author.displayName 1 Like

I would like to throw some contrast into this conversation. I am a British national who has an H1B visa, and employed by a US company working in IT. I don't live in the US, but visit frequently to do work with my employeers customers. I get paid a similar salary to my colleagues, and am not a sweat-shop developer. I work on niche products, have specific technical skills that are necessary for this, and we have been finding it hard to employ more staff to keep up with the work. Where are all of the tech people out of work? None of them are applying for the positions we advertise. And I repeat, we are not advertising for sweat shop developers.

bcdugan
bcdugan like.author.displayName 1 Like

Businesses are using H1Bs to fill in jobs where the skills are not found in U.S. citizens. If that is truly the case, then the H1B cost to the employer should be set the cost to train someone for that job. If that means a Masters Degree in a certain field, the cost should be the full tuition and expenses for getting that degree and it should be paid to a U.S. citizen as a grant. That way, in a few years, the H1B will not be needed. (Or maybe they could train someone else in their organization to fitt the spot.)

Orodreth
Orodreth like.author.displayName like.author.displayName like.author.displayName 3 Like

There's a lot of IT and Tech either out of work or working jobs that they're over qualified. Aside from a few highly, specialized occupations there's someone out of work who could do that job. McDonalds had 20 applicants (1 million) to 1 position (50,000). I expect that educated H1Bs coming over are being trained by coworkers and then the weakest linked coworker is let go, rarely is the H1B let go. Many of the IT H1Bs are hired into consultant companies that contract with corporations.

GlitterznShinz
GlitterznShinz like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 5 Like

When businesses complain that they cannot find enough qualified workers in the US labor pool - they are really saying "There are not enough qualified US workers willing to work for the slave-labor wages we want to pay." If they paid a living US wage - they could have their pick of qualified US workers.

SAStarling
SAStarling like.author.displayName 1 Like

... a "living US wage," that is. Who decides how much that is? That's quite an arbitrary term that is thrown about willy nilly, without anyone asking what it really means.

richard_p_espino
richard_p_espino like.author.displayName like.author.displayName 2 Like

A "living US wage" should at least allow you to be a lower middle class family. And I know this may be considered greedy by many, maybe someone with a Masters or Doctorate might deserve to be a real "middle class" family. It appears many have put forth the opinion that it is greed for someone with 8 years of university education and years of dedicated work performance excellence and significant contibution to their employer's yearly profits to expect or hope to be "middle class" economically.

chalicemedia
chalicemedia like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 5 Like

Eliminate the cap all together, but make the filing fee enough to pay an American in the position for five years.

erica
erica

The reason american companies don't hire american workers is because us american workers are greedy and want too much money for our skills. Maybe if we considered working for less money and forgoing all of the toys, (You know the latest iPad or game console we jug bought), then our cost of living would be down and we wouldn't need quite the large salary we are always wanting. For my wife and I, we down sized to a 450 square foot house for our selves, our three boxers and cat and are doing just fine thank you very much!

richard_p_espino
richard_p_espino like.author.displayName like.author.displayName 2 Like

CEO, Boards of Directors, and other management have a right to continual seek greater and greater compensation, live in continually greater luxury, even when the "stockholders" lose their shirts, but Americans who devote themselves to excellence in education and work performance must not seek the greatest compensation the free market will allow. They must resign themselves to less, and continually find ways to have less, and receive lesser rewards? I don't see anyone in Congress, or State Government leadership doing so. As an American I have an obligation to make as much money as I can. Those who came before shed their blood and gave their lives so that EVERYONE should have the right to live in prosperity if they choose to. Not just the supposed elite who declare themselves to be the sole inheritors to the right to be prosperous. I do not have to live the life of a serf if I choose not to.

Organic53
Organic53 like.author.displayName like.author.displayName like.author.displayName 3 Like

Here's an idea -- hire American workers. Unemployment is high in this country, but because some corporate boor wants to save money, they hire H1-B workers. Most of the H1-B workers are good people, but there countries are crunching out degrees like the US did in the 80s and now they are too cheap for the greedy slobs to turn down.

Organic53
Organic53 like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 5 Like

Here's an idea -- hire American workers. Unemployment is high in this country, but because some corporate boor wants to save money, they hire H1-B workers. Most of the H1-B workers are good people, but there countries are crunching out degrees like the US did in the 80s and now they are too cheap for the greedy slobs to turn down.

kurt
kurt like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 6 Like

The guy posting above has never worked with any H1-B visa holders. They are usually paid less money, and they are trapped by the company sponsoring them. Because of this they are blackmailed into working longer hours and for less money than their American counterparts. The democrats and republicans at the federal level are both complicit in allowing this CRIME to be ongoing in a horrible economy for the benefit of receiving large corporate donations to their reelection compaigns.

SAStarling
SAStarling

I work in an international company and have many H1-B visa-holding co-workers. Their pay is just as much as mine, and they get OT if they work it (while right now OT is not allowed for any of us in this economy). They are not treated any different, either, than any of the Americans here.

www.indigotea.com
www.indigotea.com like.author.displayName like.author.displayName like.author.displayName 3 Like

I have worked with H1-B individuals who didn't receive pay for weeks at a time, and even then weren't paid a 1/3 of what I was, for the same assignment. They can't leave, because H1-B isn't transferrable, and so they're basically sweatshop developers, with very little understanding of the social/business ramifications impacting the projects they work on. Without that understanding, the design and implementation is usually sub-standard, because of the disconnect between the developer experience and the user experience, as well as the cultural disconnect.

mbrychuk
mbrychuk like.author.displayName like.author.displayName like.author.displayName 3 Like

Let me demistify some of the H1-B assumptions made here. 1. H1B do not get paid less the US workers. Labour certification requires US employer to proove that compensation is at the same level as US workers for the same occupation. 2. Most of H1B petitions are filed for US educated foreign nationals. Most in IT sector, again, with Masters degree. 3. H1B workers are better from employer's perspective for several reasons. Note: no employer will publically confirm these reasons. Reason 1: The concept of marginal personality, when the person adapted and has the same level of knowledge as US employee PLUS 50% of knowledge and life skills from their own country. This marginal personality is very valuable to international business environment. Reason 2: H1B workers locked-in to their employer and cannot easily change employers. Thus higher employee-loyalty. Reason 3: H1B renewal is at employer discretion. Thus higher performance levels compare to US employees.

bkn2000
bkn2000

1. My company, as many others including Microsoft and Dell, hire H1-Bs at well below average cost. My company pays 40% less. I have friends at MS that trained Indian H1bs to take their jobs at less pay. 200 were fired at one whack and replaced by H1bs from India. Families left out to dry. Gates $60 billion? 2. None of the h1bs at my company have a US degree 3. loyalty is based on how well you are treated, therefore, the h1b program allows the worst of employers to keep their company running due to the "slave" nature of h1b employment. Pay? 40% less Healthcare? Who ya kiddin? Retirement account? be serious..... 30 million US workers out of jobs, 6-10 million green card workers still here. The system is broke. BTW, they can also bring in a couple, and pay one spouse, the other works for free. That's two for one at 40% discount so boss pays 30% on the dollar effectively. This is completely legal. There are no laws stating that a person cannot offer to work for nothing.

Ed.Pilling
Ed.Pilling like.author.displayName like.author.displayName 2 Like

They have shown the consulting companies submitted that they were paying the H1B less then min wage and the app was rubber stamped. Nobody is at the wheel watching.

John_LI_IT_Guy
John_LI_IT_Guy like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 8 Like

I can't believe US companies (Micro$oft you listening) cannot find skilled US IT workers!!!

gharlow
gharlow like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 7 Like

Americans have mortgages etc and those bought over from India etc are willing to work cheaply (at least until they can petition to become US Citizens), so companies get 5 years of cheap labor and at the same time depress wages and rates for the rest of us. I for one cannot find work right now, at least close to a living rate for where I live.

suzan.reagan
suzan.reagan like.author.displayName like.author.displayName 2 Like

The rules of H-1b visa applications change so fast it's hard for anyone but the immigration lawyers to keep up and even then only the good ones. If anyone thinks the immigration process is easy they should try helping someone file all that paperwork. Many people trying to complete the process legally get scammed by unscrupulous lawyers. No part in this system is really good.

santeewelding
santeewelding like.author.displayName like.author.displayName 2 Like

With U.S. population about 300 million, somewhat less than half working to support the rest, the numbers cited amount to, what? Tantamount to members of a Medieval guild? Give it up, Toni.

AnsuGisalas
AnsuGisalas like.author.displayName 1 Like

With orders of Odd American Fellows and Lodges of Free Americans... walking the globe when work grows scarce.

SKDTech
SKDTech like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 7 Like

I personally know plenty of people who would jump at the chance to fill some of those positions on a moments notice. Why are some companies so deadset on hiring someone from another country when the position could likely be filled with domestic talent. Are foreign knowledge workers better employees? Willing to work much cheaper? More likely to stay with the company that hired them? What?

Dzmitry Z
Dzmitry Z

There are plenty of great American candidates out there that will be an exception to this rule. However, in general, in addition to lower pay, foreign workers: Don't call out as much if at all Don't take as many vacations Don't file lawsuits unless it's something really bad. So, as a business, it makes sense to hire a foreigner vs an American with similar qualifications. Sad, but true.

gipit33
gipit33 like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName like.author.displayName 6 Like

Foreign workers get paid less than American Workers. They don't want things like oh OVERTIME for working over 40 hours and that pesky Sick time and Heath Care. God I hate the GOP

SAStarling
SAStarling like.author.displayName like.author.displayName 2 Like

Seriously. What is wrong with you?

AnsuGisalas
AnsuGisalas like.author.displayName 1 Like

Don't vote republican! :p I think the sign-up system sounds great... a couple of hundred mom-and-pop stores can keep the big boys from filing H-1b's indefinitely, or near-indefinitely. File the electronic petition, wait till the officials call, then say "sorry, we had to fill the spot with a local, you guys took so long". Then the officials call the next name in the list, also a no-go... etc. etc. On the down side, this new system will also make companies hire H1b's they don't need yet, just to avoid the risk of not being able to get one if needed later.

fhrivers
fhrivers like.author.displayName like.author.displayName like.author.displayName 3 Like

Both parties are hell bent on shipping jobs overseas. Hell, Obama gave stimulus money to a "green" company that shipped half of it's jobs to China! Both political parties are big on Corporatism. How do you think they get into office?

brian.minerly1
brian.minerly1 like.author.displayName like.author.displayName like.author.displayName like.author.displayName 4 Like

I'm highly skeptical that Americans can't be found to do the work. Or is it just that the law of supply and demand can't be allowed to work on labor?

Editor's Picks