H-1B visa holders get paid less than Americans: Report

WASHINGTON, DC: Brace yourself for a new reality – the US is no gold mine for software industry professionals with an H-1B visa.

A new report published on Thursday by the Institute of Electrical and Electronics Engineers, USA, a Washington-based public policy body, says that, "Immigrant engineers with H-1B visas may be earning up to 23 per cent less on average than American engineers with similar jobs." It adds, "On an average, applications for H-1B workers in computer occupations were for wages $13,000 less than Americans in the same occupation and state."

IEEE-USA President Ralph W Wyndrum feels that the current H1-B programme is "deeply flawed" because lower wages for immigrant H1-B and L1 workers have resulted in lower salaries for local American talent, too. He said: "Not paying market wages to H-1B holders is unfair to both foreign and domestic high-tech workers. H-1B employees are being taken advantage of, and some US workers' salaries are likely suppressed by the influx of thousands of additional job competitors. The wage problem is one symptom of how deeply flawed the H-1B program is."

The report also quotes Tata Consultancy Services Executive Vice-President and Head of Corporate Global Affairs Phiroz Vandrewala as saying: "Our wage per employee is 20-25 per cent lesser than US wage for a similar employee. Typically, for a TCS employee with five years experience, the annual cost to the company is $60,000-70,000, while a local American employee might cost $80,000-100,000." He also adds that this is also the reason that Indian companies are at an advantage in the US: "It's a fact that Indian IT companies have an advantage here and there's nothing wrong in that."

A Centre for Immigration Studies report published in December 2005 had also said something similar: "Applications for 47 per cent of H-1B computer programming workers were for wages below even the prevailing wage claimed by their employers."

Says Sanyogita Mukerjee (name changed on request), who works at a top-five Indian software company with a contract to develop complex software systems at International Monetary Fund in Washington, "I get an annual cost-to-company salary of $46,800 and a net salary of $36,300, despite being in the software industry for more than five years. An American with a similar experience gets around $80,000 a year."

Mukerjee is not alone. Her company has H1-B and L1 employees in New York, Chicago, Atlanta, Boston and San Francisco working with some of the best brands in the world, and almost everyone has a similar grouse. She said her company told her she is being paid at prevailing wages. 

However, IEEE vice-president Ron Hira said that the concept of "prevailing wages" is "worthless as a safeguard for U.S. and H-1B workers." He said: "Proponents of the H-1B program say that by law H-1B workers must receive prevailing wages, but this is a legal facade so full of loopholes that it is frequently gamed by employers to pay below-market wages. This is another myth of the H-1B program, that prevailing wages are the same as market wages." 

Hira says that employers routinely quote prevailing wages by selecting a survey source with the lowest salaries and by misclassifying an experience employee as an entry-level worker. "They also give the person a lower-paying job title than one reflective of the work to be performed, and cite wages for a low-cost area of the country, but send an employee to a higher-cost area."