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  1. US H1B Visa holders not cheap labour in IT industry: US think tank

US H1B Visa holders not cheap labour in IT industry: US think tank

The $150-billion Indian IT industry is heavily dependent on H-1B visas to execute projects in the US.

By: | Bengaluru | Published: June 13, 2017 7:08 AM
tcs, h1b visa, H1B visa row, us, donald trump, us president donald trump, tata consultancy services, ratan tata The US government’s “Buy American, Hire American” policy also had the perception that 80% of H-1B employees are paid less than the median wage in their fields. (Reuters)

The perception in the IT industry that H-1B visa holders are paid lower salaries than the industry average has been disputed by a US-based think tank, National Foundation for American Policy (NFAP), which has stated that wages paid to them are as good or even higher than American IT workers. The think tank has said that the median annual salary for H-1B visa holders is around $64,000 against $60,000 for US workers. For H-1B visa holders with higher degrees in computer science, the median salary can go up to $70,000, which is on par with what is paid to their US counterparts. NFAP, a reputed US-based non-profit research organisation focusing on trade and immigration, said, “The Government Accountability Office has found H-1B professionals generally earn the same or more than their US counterparts after comparing the median reported salaries of US workers and H-1B professionals in the same fields and age groups.”

This evidence goes strongly against the view held by certain US lawmakers and administration officials who say that H-1B employees are paid less than median wages.

The $150-billion Indian IT industry is heavily dependent on H-1B visas to execute projects in the US. Large IT companies such as Tata Consultancy Services, Infosys and Cognizant have come under attack from certain US lawmakers with the view that they send cheaper cost H-1B visa holders from India to the US.

The US government’s “Buy American, Hire American” policy also had the perception that 80% of H-1B employees are paid less than the median wage in their fields. According to NFAP, this view has come about due to the data available with the US department of labour (DoL). It argued that the wages listed in the DoL database typically understates an individual H-1B visa holder’s actual salary.

“This statistic is misleading as it relies on a Department of Labor database that includes multiple applications for the same individuals, since a new filing is generally required when an H-1B professional moves to a new area. That means it double or triple counts anyone who works in more than one geographic location (primarily younger workers sent to multiple offices).”

Moreover, it may not reflect what employers actually pay individual workers, but only the minimum required to be listed for government filing purposes.

Elaborating on the issue, NFAP said an employer will likely file only one labour condition application (LCA) with the DoL for a senior engineer who will work in the company’s main office. But the employer would be required to file multiple applications for a younger worker who will be moved around to different offices throughout the year. In that way, the database would be skewed toward listing fewer higher-salaried senior workers compared to younger workers — those most likely to be moved around and who make less money because they have less experience. “That is why any statistic that relies on the DoL database, such as the 80% figure cited in the background briefing, can be misleading,” it said.

The top seven India-based IT companies have seen a 37% drop in H-1B visa applications between FY15 and FY16, according to NFAP. It said this drop was due to an industry trend towards digital services such as cloud computing and artificial intelligence, which require fewer workers, and a choice by companies to rely less on visas and build up their domestic workforces in the US.

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