Wages and Ethics of an H1B Visa Worker: Explained

As a result of the recent developments in the H1B visa policy, many things have come to the fore. One of them is how corporations in the U.S. tend to hire foreign workers for cheaper labor, indulging in the unfair practice of paying them much lesser wages than their American counterparts. Companies like Tata Consultancy Services have previously been accused of partaking in this practice.

This post attempts to answer all your queries about an H1B worker’s wages, living, and earnings in the USA. We’ll cover the major topics and the importance of ethical behavior as an H1B worker living and earning abroad.

Wages and Ethics of an H1B Visa Worker: Explained

Be Assured Of Deserving Wages

While Donald Trump raised the slogan ‘Buy American Hire American’ while announcing the policy changes, most people thought of the move as unfavorable, considering his recent decision to introduce a travel ban targeting Muslim immigrants.

But the existing changes in the H1B visa policy result from careful monitoring of the working conditions of foreign workers and the exclusion of Americans from the workplace due to cheaper pay scales accorded to the foreign nationals applying for jobs in the U.S.

The H1B visa changes include raising the minimum wages of the visa holders from 60000 US dollars to 130000 US dollars, which means that the existing pay gaps and cheap workforce hiring, leading to worker exploitation, will end. The U.S. Government has mentioned its preference for skilled workers will further purify the job market, and only the best of the lot shall get a chance to work for US-based companies.

Moreover, Trump has initiated a crackdown on firms and sponsors indulging in visa fraud and any visa laws misuse and abuse. He has asked for stringent reforms in the existing policy so that no employer can flout the labor laws listed by the government. This signifies that no more delayed wages, low pay scales, or exploitation of foreign workers will be tolerated, and everyone will be reimbursed fairly for their contributions to the U.S.-based corporations.

What You Need to Know About the Wage System Offered to H1B Workers

Let us look at the pattern of wages offered to the H1B workers and the factors governing the same.

The Hot Debate:

While the advocates of H1B visas assert that the visa holders contribute significantly to the U.S. economy while filling up the skill scarcity in the U.S. companies. Many argue that the H1B visa is suitable for hiring cheap labor, leaving behind a large percentage of overlooked and neglected U.S. citizens.

According to a new study from the National Bureau of Economic Research, the H1B workers have since increased since the 1990s leading to reduced wages for U.S. computer scientists by 2.6 to 5.1 percent even though the study found that salaries for non-tech workers spiked by 0.04 to 0.28 percent the H1B visas have harmed the wages of the U.S. based employees.

The real figure: As per various sources, the average income of H1B workers ranges from around $60000 to $100000. But as per the new policy changes, the minimum wages of H1B workers will be raised to $130000.

Statistics and Data: According to a recent Glassdoor study, H1B workers are paid 2.8 percent more than their American counterparts. 

The salaries also differ according to the job profiles of the visa holders. The wages are higher for H1B workers in the case of project manager roles. The same is the case with academic professors on H1B visas.

The job profiles where H1B workers earn significantly less than their US-based counterparts include data scientists, financial analysts, programmer analysts, and software engineers.

The job profiles where the H1B and US-based workers have the same pay scale include business analyst, graphic designer, java developer, and web developer. These statistics vary from state to state according to the economic status and the company policy. It also depends on the skill set of workers.

Requirements of the “Employee-Employer” Relationship

The U.S. Consulate has formulated new regulations for H1B employees and sponsors under the Employee-Employer relationship rule. Merely giving a job designation to your employee and paying the monthly salary is not enough. The validity of the employee-employer relationship needs to be established. There are multiple factors by which the USCIS gauges the employee-employer relationship.

Whether there is direct supervision of the H1B employee and if this supervision is on-site or off-site matters. In the case of off-site job profiles, the nature and frequency of supervision are taken into account. Moreover, it is also determined whether the H1B employer is entitled to fix their employees’ daily duties and tasks and will be liable to review their work and provide incentives, allowances, and benefits to the H1B worker.

Tax claims are also evaluated, and the relationship of the company’s revenue with the products or services created by the employee will also be taken into consideration.

The valid employee-employer relationship is based on traditional on-site employment with the H1B petitioner’s direct supervision. A non-valid employee-employer relationship, on the other hand, includes off-site, contractual, and sub-contractual job descriptions with the mere objective to fill up vacant spots.

If the work assignments are allotted to the H1B worker through a third party and not the sponsoring company, it comes under an invalid employer-employee relationship. If the sponsoring employer doesn’t have direct control over the candidate’s tasks and duties and no proprietary information is provided, this doesn’t qualify as a valid employer-employee relationship.

To qualify for a valid employee-employer relationship, there has to be control over the means and manner of completing the worker’s work assignments by the sponsoring employer. Also, the petitioner has to have the right to fire, remunerate, and recruit the employee and provide them with the necessary resources to accomplish a particular task.

Being Aware of H1B Visa Scams

H1B visas are your ticket to the U.S. and a gateway to a good life. The H1B visa program is the most popular immigration scheme amongst immigrants as it is open to people of all countries. And with such a surge of employers working with H1B visa holders, the prospects seem pretty bright- but it also exposes you to the risk of being taken for a ride.

With a rise in online visa sponsors, scamming people has become so much easier. Despite the strict regulations for employers of H1B visa holders, many sponsors tend to disregard these regulations and exploit the skilled workers.

There have been so many incidents where skilled workers were sponsored for the H1B visa and promised a full-time job with the pay package as per the USCIS. Instead, the workers were made to work on a sub-contractual basis and paid low wages as they feared their deportation, considering they worked for a third party, violating the employer-employee relationship rule.

You need to be very careful about visa scams because if you comply, you will be the one to get deported. This will also affect your prospects of getting another shot at the H1B visa. It is important to work with sponsors who are not scamming or misusing laws, and you can’t trust anyone without written agreements.

Huge companies like Infosys have settled a visa fraud case for 34 million U.S. dollars in the recent past. If you notice any irregularity, you need to contact the Consulate at the earliest. This helps you get the upper hand in the situation, and you may be qualified to file for a change of status while your efforts at whistle-blowing would be rewarded too.

Also, your visa processing fee is paid by your employer. So if any sponsor asks you to pay for the visa petition, inform the authorities at the earliest.

Wages of H1B Immigrants Might Increase in the Future

With the new developments in the H1B visa policy proposed by the U.S. Congress with stricter regulations for the visa holders and sponsors, the Indian I.T. firms will no longer have a way with cheap labor. They may have to look for more expensive local recruitment options here.

The new regulations will make it mandatory for firms to pay a minimum of 100000 dollars per annum from the earlier limit of 60000 dollars. Also, the Master’s degree exemption will be lifted from the H1B visa policy.

According to industry analysts, despite the increased costs and margin discrepancies, the Indian I.T. firms will have to shift their focus on the recruitment of locals. In his election campaign, Trump had promised to bring back jobs to the U.S. and said that he would not let foreign workers replace U.S. citizens’ jobs.

The H1B policy changes were proposed to raise the minimum wage of H1B visa holders from 60000 dollars to 100000 dollars. They already compensate managerial level positions to workers holding 0 to 2 years of experience, ranging from 75 to 80 thousand dollars. In comparison, those holding more than 5 years of experience with more than 100000 dollars. Still, this move may not have a considerable impact on I.T. firms.

So now, the fear of being cheated of the rightful income might become a fear of the past for H1B immigrants. The government itself will ensure that you get your due for the services you provide. Any company that has taken advantage of immigrants by paying them lesser will have to buck up.

As an H1B immigrant, it is important to be aware of your rights and duties and the earnings you are entitled to. If you’d like to learn more about applying for an H1B Visa, click here.