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 US 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 earning in the USA. We’ll cover the major topics and the importance of ethical behavior as an H1B worker living and earning abroad.
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Wages and Ethics of an H1B Visa Worker: Explained
Be Assured Of Deserving Wages
While Donald Trump raised the slogan of ‘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 are a result of 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 US.
Photo by Alexander Mils on Unsplash
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 fact that the US 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 misuse and abuse of the visa laws. 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 remunerated fairly for their contributions in the US based corporations.
What You Need to Know About the Wage System Offered to H1B Workers
Let us take a look at the pattern of wages offered to the H1B workers and the factors governing the same.
The Hot Debate:
Photo by Dave Sherrill on Unsplash
While the advocates of H1B visas assert that the visa holders contribute significantly to the US economy while filling up the skill scarcity in the US companies. Many argue that the H1B visa is expedient for hiring cheap labor, leaving behind a large percentage of overlooked and neglected US 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 wages for non-tech workers spiked by 0.04 to 0.28 percent the H1B visas have harmed the wages of the US 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 lesser than their US-based counterparts include data scientist, financial analyst, programmer analyst, and software engineer.
The job profiles where the H1B workers 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 US 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 onsite 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 a 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 controlled over the means and manner of completion of 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 US and a gateway to a good life. The H1B visa program is the most popular immigration scheme amongst immigrants as it is open for 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 flout these regulations and end up exploiting 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 regulations by the USCIS. Instead, the workers were made to work on a sub-contractual basis and paid low wages as they feared for their deportation, considering they worked for a third party, which violates 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 US 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 US Congress with stricter regulations for the visa holders and sponsors, the Indian IT firms will no longer have a way with cheap labor and 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 IT 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 US and said that he would not let foreign workers replace US citizens’ jobs.
The H1B policy changes were proposed to raise the minimum wage of H1B visa holders from 60000 dollars to 100000 dollars. Still, this move may not have a considerable impact on IT firms. 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 experience with more than 100000 dollars.
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 earning that you are entitled to.. If you’d like to learn more about applying for an H1B Visa, click here.