Book Excerpt: A Discussion About the H1B Visa Program

The following is an excerpt from my book on immigration, “The Broken Welcome Mat.” Given all the recent interests and discussion on the H1B visa, I decided to share it here to help a more informed public debate about it. It is important to disclose that I was an H1B visa holder between 2000 and 2006.

The H-1B visa is one of over two dozen work visa categories and, unfortunately, has become a target of anti-immigration groups as a “job-stealing” program. Since I was once an H-1B visa holder, I’d like to share my experience to clarify some common misconceptions.

H1-B visa holders are not immigrants. The H-1B visa is a non-immigrant visa under the Immigration and Nationality Act, Section 101(a)(15)(H). This program allows U.S. employers to temporarily hire foreign workers, usually for up to three years. The federal government sets an annual cap of 65,000 H-1B visas, with an addi¬tional 20,000 visas for people with master’s degrees or higher. An H-1B visa holder can extend the visa once at the end of the three-year term for another three years. So, an H-1B visa holder can legally work and stay in the U.S. for six years. At the end of the sixth year, the visa hold¬er has to leave the U.S. unless he or she becomes an immigrant through other channels, i.e., marriage, employment, etc. I was an H-1B visa holder for six years and became a U.S. citizen through marriage.

H-1B visa holders have to meet very high qualification standards. Not everyone can apply for an H-1B visa because the bar is set very high. Analysis performed by the Heritage Foundation shows that all H-1B visa holders have at least a bachelor’s degree, 31% have master’s degrees, and 12% have doctorate degrees. When I was offered a job at Citibank through the H-1B program, I earned two master’s degrees from two accredited U.S. universities. Most H-1B holders have at least one master’s degree from an accredited U.S. university. In addition to a master’s degree, many H-1B visa holders, including me, have professional licenses or certifications in our fields of specialization.

However, more than a good education is required. The United States Customs and Immigration Services (USCIS) requires that an H-1B visa holder can only be hired to fill occupations where “the specific duties are so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor’s or higher degree.” USCIS requires both the employer and employee to give a very detailed description of the job duties entail and how the prospective employee’s field of study relates to the specific occupation he or she intends to perform. Here is an excerpt from the USCIS on what constitutes a detailed description:

• A detailed explanation of the specific duties of the position, the product or service your company provides, or the complex nature of the role you will perform, and how your degree relates to the role.

• Written opinions from experts in the field explaining how the degree is related to the role you will perform.

H-1B visa holders are not cheap laborers. Unlike the popular misap-prehension, an employer cannot pay a foreign worker as little as possible. The Immigration and Nationality Act (INA) requires that hiring foreign workers can’t harm American workers’ wages and working conditions. To comply with this statute, the Department of Labor (DOL) requires that “the wages offered to a foreign worker must be the prevailing wage rate for the occupational classification in the area of employment.” The DOL website defines the “prevailing wage rate” as “the average wage paid to similarly employed workers in a specific occupation in the area of intended employment.” An employer can’t just claim the salary it is going to pay the prevailing wage rate; it has to submit a request to the National Prevailing Wage Center (NPWC) to obtain the prevailing wage for the position or get it from an independent authoritative source.

Since most H-1B visa holders are well educated and highly skilled, it is a no-brainer that they are well compensated. In fact, H1-B visa holders are among the highest-paid workers in the United States, and their wages are in the top ten percent of what the U.S workforce typi¬cally earns in a year. The median salary for H1-B visa holders in 2021 was $108,000, which is twice the median wage earned by U.S workers ($45,000). Additionally, the wage growth for H1B visa holders “has surpassed all U.S workers’ average increase by 52% since 2003.”

H-1B visa holders are often a costly and risky option for employers. Hiring a foreign worker on an H-1B visa is not a cheap alternative.

First, hiring is much longer and more costly than hir¬ing an American worker. After a job is posted, every applicant, foreign or not, must undergo the same screening and interviewing process. I went through five interviews. When Citibank made me an offer, it was contingent upon approval from the Department of Labor. This approval process is commonly called “labor certification,” which is a complicated, time-consuming, and costly process. Part of the process was for Citibank to continue advertising the position it offered me for three additional months in national media. Citibank also had to disclose my salary in the advertisement. Any American could contact Citibank to object to my hiring and apply for the same position. Citibank had to go through the entire hiring process until it could prove I was more qualified.

Second, once a foreign worker is identified, an employer usually bears all the filing and legal fees for the H-1B visa, which usually include the following (as of 2022):

• Standard H-1B filing fee. $460 per person.

• ACWIA (Training) H-1B Fee . Employer must pay $750 if fewer than 25 employees and $1,500 if more than 25 employees.

• Public Law 114-113 Fee . Employer pays $4,000.

• H-1B fraud fee. Employer is required to pay a $500 fraud-prevention fee per application.

• Premium processing fee. A normal H-1B application process takes 2-6 months. The premium processing can shorten the process to 15 business days if the employer is willing to pay an additional $2,500.

• Legal fee. Employers usually hire immigration lawyers to handle the entire process. The cost of the lawyer is usually several thousand dollars.

The total cost of hiring a foreign worker on an H-1B visa could be as much as $10,000. As mentioned earlier, employers must also pay H-1B visa holders the prevailing wage. Therefore, getting a skilled foreign worker is not exactly cheap for employers.

In addition to cost and time, employers who hire H-1B visa holders may encounter other risks because H-1B visa holders are not immigrants. For instance, when I was working for Citibank, our corporate lawyers and HR representative warned against my traveling internationally because I had to apply for a visa with the local U.S. consulate to return to the U.S. There was no guarantee that the local U.S. consulate would grant me a visa even if I provided evidence of employment in the U.S. Each of my overseas trips became a headache for my boss because he had to be ready for the possibility that I wouldn’t be able to return.

So why do employers go through so much trouble to hire H-1B visa holders? They don’t do it out of the kindness of their hearts, but out of necessity. The U.S. needs more skilled workers since about 11 million job openings still need to be filled. The National Federation of Independent Businesses’ latest survey reported 44% of companies could find “few or no qualified applicants for positions they were trying to fill.” Highly educated and highly skilled foreign workers, capped at 65,000 per year, are not the cause but rather a tiny remedy to fill this skill gap. “In economic terms, [skilled workers] represent a transfer of skills to the receiving country without cost to the recipient but at the expense of the immigrant’s country of origin, which devel¬oped the immigrant’s mind and muscle.” American businesses are willing to go through all the trouble to get this talent to help them compete in the global economy.

Critics of the H-1B program accuse it of hurting American workers by substituting them with cheap foreign workers. To support their argument, they focus on: which employers benefit most from the H-1B program and how much the H-1B workers are paid compared to their American counterparts in similar occupations, not to average Americans.

So which employers benefit most from the H-1B program? The New York Times reported that “the top 20 companies took about 40 percent of the visas available—about 32,000—while more than 10,000 other employers received far fewer visas each.” These top American companies include Apple, Amazon, and Google. The demand for H-1B visas far exceeds the annual quota of 85,000. For instance, the USCIS received more than 300,000 H-1B visa applications in fiscal year 2022.

Two Indian outsourcing firms, Tata Consultancy Services (TCS) and Infosys, topped the list of companies applying for H-1B visas on behalf of foreign workers (in this case, mainly from India). Thus, many critics of the H-1B program conclude that the visa gives outsourcing firms an unfair advantage. But the truth is that for each foreign work¬er, only one application can be submitted by the employer. Since a global outsourcing firm that relies mainly on foreign workers tends to submit more H-1B visa applications, the probability of its applications being selected is higher. But no official bias that favors global outsourcing firms over other businesses because U.S. immigration officials use a lottery system to randomly choose H-1B visa recipients.

The second criticism against the H-1B program is that top out-sourcing firms pay the H-1B visa holders much less than experienced technology workers. Visa Explorer, a database of tech workers, reported that “the two companies [Tata and Infosys] appear to be paying well below their Silicon Valley counterparts. Among the 9,300 jobs Tata has filed LCAs [Labor Certification Applications] for in 2015, the median salary is just over $66,000, while at Infosys, the median is $76,000.”

This criticism ignores two essential facts. First, it ignores the additional legal costs an employer has to bear for each H-1B application. As mentioned earlier, hiring a foreign worker on an H-1B visa can cost an employer as much as $10,000. In addition, all these costs will recur in three years if the employer wants to file an extension for the same for-eign worker. Second, the criticism neglects to mention that most H-1B visa holders are 35 years of age or younger. They may be well educated. Still, they are young and likely have less experience than older and more experienced American workers in similar occupations. Remember that a young American worker would be paid less than an older and more experienced American counterpart.

Want to know more about issues of the U.S. immigration and ideas for reform, please check out my book, “The Broken Welcome Mat.”