U.S. President Donald Trump will sign an executive order later today directing four government agencies to review the H-1B visa process. Part of today’s order dubbed “Buy American and Hire American” also directs the agencies to suggest reforms to the H-1B visa process.
At a press briefing yesterday, representatives of the Departments of Labor, Justice, Homeland Security, and State spoke to reporters about the executive order, on background (meaning we don’t know the names of the representatives who spoke). They said the executive order calls on those four departments to see to it that H-1B visas are rewarded to the most skilled or highest-paid applicants.
The H-1B visa program paves the way for the majority of highly-skilled workers from other countries to work in the U.S. The visas are doled out through a lottery system, and there are usually about three times as many applicants as there are visas.
The tech industry is particularly sensitive to the visa program. A group of Goldman Sachs analysts have estimated that 900,000 to 1 million H-1B visa holders currently reside in the U.S. And while H-1B visa holders comprise only 0.6-0.7 percent of total U.S. jobs, the analysts estimate they comprise about 12-13 percent of tech related jobs.
The H-1B program is supposed to provide the flexibility for companies to hire highly skilled foreign employees who possess unique technical expertise. Unfortunately, some outsourcing companies have abused the program. They’ve brought foreign workers to the U.S. to learn jobs, such as IT support. They then send those workers back to their own countries to work remotely, and fire the U.S. workers who trained them.
Research from Computerworld (and cited in the Goldman Sachs report) found that in 2014, the top users of H-1B visas were all consulting and outsourcing companies, including Tata Consultancy (7,149 visas), Cognizant (5,228 visas), Infosys (4,022 visas), and Wipro (3,246 visas).
In yesterday’s White House briefing, one of the unnamed agency executives called out three of these firms, saying, “The top recipients of the H-1B visa are companies like Tata, Infosys, Cognizant. They will apply for a very large number of visas by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas. Which is very different than I think how most people think of the H-1B program. They would think of it as being for skilled domestic work, rather than contract work.”
Based on those comments, the agencies will likely try to close any loopholes that allow outsourcing firms to engage in these practices. In addition, the review of the H-1B visa process might also affect how well foreign workers are paid.
Another unnamed agency executive yesterday said, “I think maybe you’d be shocked to know that a full-on eight out of 10 H-1B workers are paid less than the median wage in their fields.”
And of the three outsourcing firms called out above, a senior government official said, “Those three companies are companies that have an average wage for H-1B visas between $60,000 and $65,000. By contrast, the median Silicon Valley software engineer’s wage is probably around $150,000.”