Proposed wage levels for H-1Bs would discourage companies from hiring them.
The Donald Trump administration plans to raise the base pay for foreign workers who come to the United States on H-1B visas so that they are not easily hired instead of Americans. Bloomberg reported that an entry-level software engineer in San Francisco’s Silicon Valley would need to pay $162,000 annually to qualify for an H-1B visa, while the salary would be $113,000 in Dallas and $132,000 in New York.
Experts warn not to call this immediately good news for foreign workers, even though their salaries will rise, because that will make companies spend more on hiring them — and they may become discouraged. In addition, the $100,000 visa fee remains for hiring anyone into the H-1B visa program from outside the country.The report cited an analysis by immigration data companies Lawfully and Threshold, which said that this would cost the largest employers of foreign talent at least $18 billion in the first 12 months.
Within three years — when most existing H-1B visas will have to be renewed at the top level — the annual cost could reach $43 billion.The salary increase awaits final approval from the Ministry of Labor.There must be a way to “ensure that the labor market is not distorted,” said Ronil Hira, an assistant professor of political science at Howard University. “The simplest way to do this is to ensure that the people being brought in actually have specialist skills, and the way to signal that is through wages.”
The Department of Labor issued an NPRM (Notice of Proposed Rulemaking) proposing the new wage level in March. As part of the H-1B, H-1B1, and E-3 visa sponsorship processes, employers are required to obtain an approved Labor Condition Application (LCA) from the Department of Labor. The LCA must contain the employer’s certification that it will pay the foreign worker the highest “actual wage level paid to all other similarly situated employees,” or the prevailing wage level for the occupational classification in the intended field of work.
Likewise, an employer sponsoring a foreign worker in second- or third-preference employment-based green card (EB-2 or EB-3) operations through a PERM labor certification application must typically obtain a prevailing wage determination (PWD) for the employment opportunity from the OFLC’s National Prevailing Wage Center.
