IT Employment

Signed bill means fee increases for H-1B and L Visas

President Obama signed a bill into law on August 13 that includes an increase in fees for companies that employ professionals on H-1B and L visas.

President Obama signed a bill into law on August 13 that includes an increase in fees for companies that employ professionals on H-1B and L visas.

There is an increase in fees by about $2,250 for L visas and by $2,000 for employees on H-1B visas, and applies to companies with 50 or more employees in the U.S. that have more than 50 percent of their U.S. workforce on H-1B or L visas.

The bill takes effect immediately and ends in September 2014.

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.

32 comments
bkn2000
bkn2000

I worked for a company that has about 4-7 employees on average. It's a DARPA operation funded by the DoD. The boss is a naturalized citizen, he got his citizenship in 2000 and was able to then own 51% of the company. There are 4 people on the BOD. Only one of them is a native US citizen. They get $40K apiece for getting together once a year over an expensive meal. Not bad for one day's work, eh? The boss only hires H1-B visas now. He has had a total of 4 US citizens there since 1996, averaging 3 months to 3 years employment. The main group of H1-Bs have been there for 14 years now without a break in employment, while all the Americans were let go. The boss pays himself the Govt rate of $85/ hr, and turns in 12 hours a day, 6 days a week, and he actually spends about 40 hours maximum. Nobody checks to see if he is in fact on the job. The H1-B workers make about 60% of what Americans would make, these are all PhDs.... avg about $22 / hr. There are no benefits, no vacations, no health care, but the boss gets vacations paid and health care. One of the workers was a spouse who worked for free for 2.5 years until I told her that this was unacceptable, and I may just contact my friends at the Pentagon and do something. One week later, she was being paid all of a sudden. The boss submits a proposal. If he does not spend the money, it goes into his pocket. He is now buying a $1.3 million condo in Daytona Beach. I would say the boss makes about $400,000 per year supervising 4-7 people. Now is that the America you all were thinking about?

Sterling chip Camden
Sterling chip Camden

Send them furreigners packin'! America is for the Americans, as my great, great, great, great, great, great, great, great, great, great, great grandfather said, before he was dissuaded by his daughter. At least, so goes the story.

jck
jck

We let the educated ones in legally, and the uneducated ones come in illegally. So when that programmer from India or China comes in and there's no burgers left for you to flip...how will you make a living? I don't believe in isolationism, but I do believe on only letting in what helps take care of the deficit [b]temporarily[/b]. H1Bs were never meant as a path to citizenship. They are a stop gap to help US business find capable workers while the education/training of legal residents here happens. But heck, who cares? What's a job important for?

AnsuGisalas
AnsuGisalas

It is perfectly possible that this is a way to redefine the wage expectancies of a certain job-role. Citizenship is then one of the key motivators to drive down those wages. And it works too.

jck
jck

If you look at who has been pushing for H1B Visa issuance increases: Wal-Mart Microsoft Intel Companies who would benefit by increasing the people that exist in the labor pool, because: They can say that people aren't as scarce, which lowers wages... H1B people tend to work for less than US natives... H1B people won't rock the boat as much, because they fear losing their H1B... So, I see your point. American business probably is using it as a tool to drive down cost and increase profits. Wish the US government wasn't so focused on being controlled by business.

gharlow
gharlow

This issue is ALL about companies cutting labor costs. Less wages, smaller middle class, smaller economy, less innovation. America is addicted to cheap labor AT ANY COST!

Tony Hopkinson
Tony Hopkinson

and it was n't ours.... Anyone who was surprised by this turn of events, I have a really nice bridge across some highly fertile land available for sale. Politicians, if their lips are moving they are lying, if they aren't moving then they are thinking about the next one.

AnsuGisalas
AnsuGisalas

It [b]was[/b] yours. Yours as you were. The then you is not the now you, but the obligations of the then you are not wiped away by the then you becoming the now you. Is that clear? :p J/K, I know it's not clear, and I do know what you mean. Probably you know what I mean too.

AnsuGisalas
AnsuGisalas

Not only that, but a sheriff of nottingham too? :O :D As for globalization - we'll see how it goes, us all living in interesting times, and all.

CharlieSpencer
CharlieSpencer

"...applies to companies with 50 or more employees in the U.S. that have more than 50 percent of their U.S. workforce on H-1B or L visas." I don't follow this issue much. Anybody know how many companies this applies to, or what percentage of companies with more than 50 employees will affected?

Professor8
Professor8

The fee SHOULD (but does not) apply to all firms with more than 5 employees on guest-work visas. I mean, how many "best and brightest" people are there in the world? 10? 100? Certainly not 1000. Of course, there should also be a $35K background investigation fee on every visa of every kind. Keep in mind that H-1B "prevailng wages" are well below US local market compensation (12% to 30% by different investigators). Tata VP Phiroz Vandrevala confessed in 2006 that "Our wage per employee is 20%-25% lesser than US wage for a similar employee... Typically, for a TCS employee with 5 years experience, the annual cost to the company is $60K-$70K, while a local American employee might cost $80K-$100K", for a $30K advantage. (He failed to mention the cheapness -- but not quality -- advantage of dumping employees with 20 or 30 years of experience.) And, of course, the Indian media were recently gleeful to announce the Socialist Insecurity totalization agreement, adding an average $10,500 tax advantage for firms paying guest-workers from India. $2K doesn't amount to anything in the scheme of things. Maybe it should be raised to $75K, or the numbers of visas reduced to 40 per month and let them be auctioned off to the highest bidders so as to introduce some free market element.

QAonCall
QAonCall

Boycott companies that outsource jobs? Try it, you will quickly find you can't! Adding these costs, will only drive the cost of goods and services higher. Business has bought into the outsourced business model. Until that mindset changes, you are pushing uphill.

LightVelocity
LightVelocity

>> Until that mindset changes, you are pushing uphill. Absolutely, just that a few dumb heads can't accept the reality and fool themselves in thinking that all the service crap is associated with this

QAonCall
QAonCall

This is a good deal of jobs in the US. Unfortunately, there will be companies that split off, and create multiple companies owned by a single parent entity and they will circumvent this. I don't necessarily have an issue with H1B, however, with unemployment at such high levels and EVERY single IT class I take for cisco, ms and such is filled by 'workforce' companies taking advantage of government funds to retrain people into IT jobs, that unfortunately are not going to be there? Expecting government to be ahead on IT I think is fruitless, and I fear the market will be flooded with folks that will depress further IT wages.

HypnoToad72
HypnoToad72

Especially the final sentence. America simply can not compete anymore -- or shortly wouldn't be able to, with the depressing of wages -- meanwhile, costs of college and even certifications for the x number of languages and other entities keep increasing.

QAonCall
QAonCall

Some factual errors though. example: 'Bush gave them amnesty' There has been no amnesty since 86, and before that Ike actually did a mass deportation. Additionally, laying all this on the Presidents is fairly shortsighted. Reagan acquiesced to demands in order to get stronger border security, the congress reneged. Not sure how this has anything to with the conversation, other than as an example of how other countries cheap labor is accessed by 'US' corporations? Keep in mind that the larger cost the US has born is the development of a good deal of the major technologies and then outsourcing the manufacturing. Think iPad. Currently selling 1m plus units a year, made in China, shipped directly from China. Add to that the other 'i' lines and you get 10% growth in China over the last 20 months. Remember, these are jobs Americans just won't do! (That is what we were told!) ;)

don.gulledge
don.gulledge

Back in the 70s, the AMA/Med Schools decided to tighten up the number of doctors in the US by restricting student populations on med school. Why, because they wanted to drive med cost higher so they could make a lot more money at it. Instead of dealing with the AMA's monopolization of Medical Education and forcing them to undo their restriction, the State Department decided to counter by allowing visa for foreign doctors to flood in and increase the number of doctors per capita. Who lost. The American citizen. We get poorer medicine from foreign trained doctors who have difficulty communicating, send many of the dollars back to their homelands, and our children can't get medical degrees because it's driven the cost skyhigh in the US to get them. America has a cross border problem of mexican immigration crossing the border and coming into the US to find work, make some money and go back home. I lived in California in 75 when California passed a new law that allowed mexican illegal immigrants to get on welfare and go to public school. The reason, "we can't allow these children to go without proper nurishment and proper educations despite their being in the country illegally." Now, the Mexicans all over the US can get welfare, driver licenses, etc. and be illegal. What did America do about it. Reagan gave them amnesty, Bush gave them amnesty and now Obama wants to do the same. Most the rights, free priviledges used by the mexican illegals were rights fought for and won by the slaves' descendents of America during the 50s 60s and 70s. Why should the mexicans get any of these rights. America never did anything to them. They come from a different country never governed by the US. They don't even celebrate the 4th. They celebrate cinco demio, the mexican independence day in the US. How's that for sticking it in your face. Now, we pay our tax money to foreign governments to train people to be IT so they can take our jobs and we just bitch and complain, but nothing changes. We pay out billions to foreign governments that take our money and snub their noses at us. Why, because we don't want another Hitler to happen. But, why should we. They're going to happen anyway like Bin Laden. When you really get into it, you see that the US tries to hurt itself over and over and over again. So, what if we outsource all the IT overseas. They won't have medical care because all their doctors are here. Besides, the US is going to part of Mexico in another 50 years.

HypnoToad72
HypnoToad72

I will certainly give that real thought. I'd still like to think there's a better way, that helps local economies along with the global economy, and improving peoples' lives in general... competition after a certain point is more destructive than constructive (and that requires a separate post, given the amount of detail I could type out). But there are times that 'frustration' is the only emotion one can feel... wage-depression certainly doesn't help the worker, especially given the costs of training, college, certification, being proficient on the latest tools and equipment, et cetera...

AnsuGisalas
AnsuGisalas

After all, wage depression helps exports. The powers that be are anxiously eyeing the rise of China and India, hoping to short-cut out of what they think is a wage-trap.

robo_dev
robo_dev

And you're on a H-1B Visa along with 25 others... I'd start revising the old resume right now, as you're costing your boss an extra $50,000 a year. :) :)

gharlow
gharlow

Article from InformationWeek.... Aug 3, 2010 http://www.informationweek.com/news/software/integration/showArticle.jhtml?articleID=226500202 Meet the new boss same as the old boss

Chilidog67
Chilidog67

The simple fact of the matter is the H1B visa is being abused. The original idea was to import talent, but now it's mainly used to drive down wages. For example, a friend of mine who is a very experienced and certified Exchange Administrator, was a Notes admin prior to that, and who is currently managing an offshore Exchange team for a Fortune 500 company, recently saw an ad in the paper for an experienced Exchange Admin position with a company 2 miles from her home. After submitting her resume she called a hiring representative at the company (an old college roommate) who told her (off the record) that the position was actually already filled with an H1B visa position before it was advertised and that it was posted for "leagal reasons". She was told (again, off the record) that they wouldn't hire her because she would cost twice as much as an H1B worker. The H1B visa was created at a time when the talent pool in the US was much smaller. Now with offshoring, more schools teaching IT, the retiring of the baby boomers, etc. the game has changed and the entire process needs to be reviewed.

plevin
plevin

I'm also an IT guy; BA plus Sr. Tech Writer. My BA career ended when my consulting company offshored most of their BA work and hired H-1s for the rest. As a Sr. Tech Writer, my English and MS Office skills are hard for foreign nationals to match, so that's what I'm doing now - at about 2/3 my previous pay. I agree that we need to organize, but our tactics need to somehow address the international nature of 21st C. IT technology. One example: Like many IT people, I used to be a classical musician and orchestra manager when film recording jobs were a mainstay in the music industry. In the 90's, when the AFM raised rates beyond a certain point, all the film recording work moved to London - and has stayed there. The result: the US classical music industry shrank by more than half. How can organizing be used to address global competition? My only thought is that legislation should not be encouraging it!

four49
four49

This kind of thing shows why IT workers are sorely in need of trade associations and lobbyist groups. Traditional labor unions will never work for IT (and should not) but every other industry of professionals has some sort of trade associations. We need to do the same before all domestic IT is handled by 3rd world migrants making 3rd world wages.

pbowes55
pbowes55

Definitely need to keep the highly skilled folks away - we don't want them innovating on our turf!

HypnoToad72
HypnoToad72

The H1B system was originally devised, in good faith, to bring in people legitimately. These days, with 5 people vying for 1 job... Why not do some research? Most people know it's about the driving down of wages, which isn't helping our economy. (Plus, would *real* globalization have cost even one American their job? Nope. It's about driving down wages and extending greed. Nothing more.) I'll help you out, a little, with some news items: http://www.mydd.com/story/2007/2/7/184312/5388 http://programmersguild.blogspot.com/2007/04/programmers-guild-supports.html http://techrepublic.com.com/5208-6230-0.html?forumID=6&threadID=179848&start=0 http://timesofindia.indiatimes.com/World/US/Indians-involved-in-major-US-H-1B-visa-racket/articleshow/4124465.cms You might find other issues like countries manipulating currencies, politicians who help give taxpayer-funded subsidies or tax cuts to corporations THAT offshore, and a number of other issues. I'm sorry you want to call your fellow countrymen dumb, which is what your post effectively states.

Tony Hopkinson
Tony Hopkinson

If you want a global ecomony then you need a global foundation to build it on. Tax, Legislation, government etc. Don't even try to tell me these muppets are going down this route for the the greater good of the world. ffs, a village idiot's dog could see through that argument.

LightVelocity
LightVelocity

stop thinking just US and UK economy; think global economy

Tony Hopkinson
Tony Hopkinson

Cost Per Item $50 Price per Item $70 Profit $20 (you seem to have difficulties with arithmetic) Outsource / H1B / Hit some other greed button Cost Per Item $30 Price per Item $50 Profit $20 (just in case you forgot) Of course that ignores the fact that a good portion of your custoners are out of work and can't afford $50 for your substandard short lived deliberately obscolesced crap anyway.... H1Bs aren't founding companies, they are purchasing manumission. Stop thinking company balance sheet, think economy, ffs

pbowes55
pbowes55

As it is there aren't enough H1B's around for all of the qualified people who want to work. Its shortsighted to want to keep them out because they could be taking a job away from an "American". Regardless of the fact that the company will be getting better productivity which will help it compete on prices and service in the future, thus ensuring jobs do stay in the states. That aside many of these H1B's go on to form their own companies. The question I would ask is how many of you guys are working for company's founded by immigrants? My guess is its a fair amount

HypnoToad72
HypnoToad72

And then companies will say "the US lacks talent", "the US lacks qualified staff", et cetera. Take a guess why - people usually chase after something that will benefit them. If I wanted to spend $30,000~$75,000 on training to get up-to-date on relevant skills, for a job paying $10/hr, I would not be the first American to say "Thanks but look at the big issue and really wonder why there's no purported talent or interest here." People can not live on $10/hr, especially given the cost of further education (via college, certifications and their training (which are costly), and other factors.) Amongst other factors. It's a spiral downward. :(