H-1B employees earn less than US counterparts

Despite pay parity being a condition of taking on non-US citizen IT workers, a study claims they are being paid less. Patrick Thibodeau reports

IT workers admitted to the US under the H1-B visa scheme earn on average US$13,000 ($NZ19,200) less than their American counterparts, according to a study of US Department of Labour records released by the Centre for Immigration Studies, an independent research organisation in the US.

H-1B workers — who can work in the US without citizenship in industries where there are skills shorages, such as IT — are paid less, even though the law requires that they receive prevailing wages, according to the study.

The study was conducted by John Miano, a former chairman of the Programmers Guild, a group that has been critical of the H-1B programme.

Miano’s report compares wage data that employers file with the Labour Department against wage data collected by the US Bureau of Labour Statistics. While employers must declare on a form called the Labour Condition Appliction that they will pay prevailing wages, Miano says in the report that agency officials haven’t been required to verify that data.

Meanwhile, employers can use their own salary surveys for entry-level workers to justify paying lower wages, “rather than more relevant and objective data sources, to make prevailing wage claims when hiring H-1B workers,” Miano says.

One result is lower wages for H-1B workers. For instance, the study found a mean 2003 wage for H-1B programmers of US$49,258. Labour Department data pegged the mean 2003 wage salary for US programmers at US$65,000.

Recommendations for improving the wage disparity, which can put downward pressure on the rates paid to US workers, include limiting the number of H-1B visas that an employer can obtain each year based on the number of US employees at each company, as well as requiring companies to use a “standard wage source” produced by the federal government when making prevailing-wage claims.

The report also suggests that the ability of H-1B workers to seek better wages from other employers be limited. The H-1B visa has a six-year limit but allows the foreign worker to apply for permanent residency. While visa holders can change jobs, Miano says a worker who changes employers is unlikely to get permanent residency.

The 65,000 H-1B cap for the 2006 federal fiscal year that began in October was reached last year. A proposal to hike that cap this year by 30,000, which was included in the Deficit Reduction Omnibus Reconciliation Act of 2005, failed to win House approval last month.

Congress is allowing an additional 20,000 H-1B visas to foreign students graduating from US schools with advanced degrees, but that cap is very close to being reached, according to the US Citizenship and Immigration Service.

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