New reforms proposed for H-1B visas — will they harm Silicon Valley?

A Southern California congressman has introduced legislation aimed at reforming the H-1B visa for high-skilled foreign workers, but a Bay Area congresswoman warned on Thursday the bill could harm Silicon Valley’s job market.

Rep. Darrell Issa, of San Diego County, intends, through his bill, to reduce outsourcing of jobs based in the United States and replacement of American employees by foreign workers.

Issa is concerned about abuses of the existing visa program by companies such as Walt Disney and utility company Southern California Edison.

“We need to ensure we can retain the world’s best and brightest talent,” Rep. Issa said. “At the same time, we also need to make sure programs are not abused to allow companies to outsource and hire cheap foreign labor from abroad to replace American workers.”

The Issa bill, H.R. 170, is designed to close a loophole in the immigration system for high-skilled workers to bring in cheap foreign labor from abroad.

The legislation would raise the salary requirement for the positions to $100,000 a year, up from the current $60,000 annual wage. By raising the salary minimum to be more in line with average U.S. wages for these kinds of jobs, the legislation, Issa hopes, would reduce the chances that American workers lose their jobs to cheaper foreign labor.

“It will ensure that our valuable high-skilled immigration spots are used by companies when the positions cannot be filled by the existing workforce,” Issa said.

Rep. Zoe Lofgren of Santa Clara County, however, warned that the Issa bill is unlikely to remedy the issue of outsourcing of Bay Area high-skilled and tech jobs.

That’s because tech companies in a location such as Silicon Valley, where fledgling software engineers can command a starting wage of $140,000 a year, might still have incentives to outsource their work to cheaper labor they could bring in for $100,000, according to a top staffer with Rep Lofgren’s office.

Details of the Lofgren bill, which she’s been working on for more than a year but has not introduced, would prioritize allocation of H-1B visas and jettison the current lottery system that’s based on the $60,000 pay level for high skilled jobs.

“Preference would go first to employers that hire mainly U.S. workers and then to H-1B-dependent employers,” according to an older summary of Lofgren’s new approach that was released in June.

Generally speaking, employers who pay 200 percent to 150 percent — or put another way, as much as 2.5 times to three times  — the prevailing wage in their metro area would get first preference of hiring people through the H-1B visa program under the Lofgren legislation.

One of the over-arching policy goals of President-elect Donald Trump is to bolster hiring of American citizens and reduce the instances of U.S.-based jobs being outsourced to foreign countries or foreign workers.

“This bill is simple, bipartisan and is an important step to growing our economy and fixing one of the many aspects of our country’s broken immigration system,” Issa said.


Photo: Visa applications. (Courtesy U.S. Citizenship and Immigration Service)


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  • Enlighten

    The remedy for the h1b abuse, is to
    1. Make H-1b minimum salary of 110k US$ per year. This should not have any loopholes like saying bonus counts towards the 110k salary. Bonus is not guaranteed by law, so any company for example can give an offer letter saying 110k salary with 50K bonus, but they will not pay bonus. such loopholes should be avaoided and a base pay of 110k should be applied.
    2. H-1b applicants should not be allowed to work as consultants(contractors), they can only work as Full time employees to the company that applied for the h-1b visa, h-1b applicants cannot go and work as contractors at other customers or in any other location other than the company address.
    3. If the h-1b visa is oversubscribed, instead of using a lottery to pick h-1b applications, any company paying higher than the minimum 110k salary should be given the h-1b visa first. Any company paying less than 110k will be automatically disqualified.
    4. the above reforms should also be applied to foreign student F1 Visa EAD, OPT program as well
    5. Revoke the executive action by Obama which granted spouses of h-1b EAD to work in US. This is another sneaky move to import cheap labor. They claim only 85,000 H-1b are issued each year but with Obamas 2015 executive action, the total number of potential foreign workers allowed in through h-1b is 85,000 X 2 = 170,000.

    The above rules should not be a problem since the US corporations claim that they are highly skilled people coming on h-1b. If they are indeed highly skilled the above rules should be enthusiastically embraced by US corporations.

    • Raj

      The problem with spouse of h1b work permit and other h1b related issues are because employees are tied to the same employer for years due to wait time for green cards. Fix that first, automatically h1b issue would get fixed. Why is US having quota for green card based on birth country. A janitor from Bangladesh can get green card faster that a engineer in Microsoft from India because of this.

      • noh1bvisas

        that would make it better for h1bs and h4s. the object is to make it WORSE. America first!

        • Raj

          If you want to make it worse for h1bs and h4s and hope for America to be must be kidding. See the developments happening in other countries buddy..US is lagging in all’s still sleeping on the fortune built by your forefathers..come to reality mate..

          • noh1bvisas

            WRONG! I don’t see millions of people clamoring to get INTO india and other 3rd world countries.

          • Raj

            When you compare India with other 3rd world countries it shows how ignorant you are of the developments in India. No wonder all the jobs are moving to India from US.

  • Enlighten

    an aspect of h-1b abuse that is not being highlighted is the role played by small fake body shops that have been setup in US by by people who came to US on h1b. with the abundance of h-1b applicants, US corporations do not want to hire full time employees but imstead want to hire temporary contract workers. To cater to this need, there have been a lot of small body shop companies that have been setup as LLC companies by h-1b people from India. These body shops have no respect for law and abuse the system. Unless these small body shops are shut down, the h1b abuse will not end. unfortunately everytime the discussion of h-1b comes up, it is only the big outsourcing companies that are being mentioned regarding the h-1b abuse, but nobody is talking about these small body shops who are filing thousands of h-1b visas each year. these body shops are escaping scrutiny and there is no metion about them. each body shop holds 20 to 100 h1b visas each. there are over 5000 such body shops!!! holding hundreds of thousands of h-1b visas and filing more h1b visas each year. To abuse the system these small body shops set up by Indians hire only Indians on h1b and pay them 60K per year. The same job is done by Americans for 100k+. Furthermore these body shops only pay salary if the h1b consultant is working on a project, if he is on bench (no work) he is not paid the salary. This is illegal, to prevent scrutiny these body shops and h1b consultants indulge is what is referred to as running the payroll, basically they run payroll to pay taxes without paying the salary to the h1b consultant. The taxes on 60k are not much because after exemptions for spouse and kids, you pay very little taxes and the h1b consultant gets to stay in US instead of leaving US when he loses job. Another abuse by these Indian owned body shops is getting h1b candidate to pay for the h1b application fees. People are desperate to come to US so they pay these body shops to file for h1b. United States citizenship and immigration services (USCIS), department of labor (DOL) are not taking any action on these small body shops and others companies that abuse h1b and student visa f1 EAD. Americans are being replaced by Indians using h1b visas. Another abuse is student visa f1 visa, EAD and OPT. an average body shop files for 50 to 100 h1b visas and earn millions of dollars per year. The h1b applicants, F1 visa, OPT applicants don’t have any skills, so these body shops create fake resumes and get proxies (other experts) to attend phone interviews on behalf of h1b candidates. It is typical for these body shops to offer 500$ to 1000$ for proxies to take interview calls on behalf of h1b candidates. Here are examples

  • Reha Yenkovich

    Zoe Lofgren is one of the biggest anti American worker aholes in congress. She gets her money from business and backs their position. Vote this B out she sucks.

  • Reha Yenkovich

    All these foreign worker visa programs are about hiring cheaper labor and under cutting US workers wages and Demorats go along with this garbage when they claim they are trying to help the middle class. Bull Tick!

  • noh1bvisas

    Depends on the wording – last time he wanted to include bonuses (optional) in the $100k test. It needs to be $100k minimum required salary. And NO INCREASE in the number of h1bs. period. no extensions or other funny business!

  • Lucky SF

    what does that has to do with anything. Indians can poop where ever they want in their country. The discussion here is simply about H1B abuse and remedy. Raj is correct, the moment you take away employee dependency on employer for green card, fraud and abuse will stop. No one will bring in cheap workers and US gets the best labor.

    Also to ur point, u r ignorant to the fact that India has 30 million migrants from other countries. Far more then US. India has borders with 6 countries and people come in from all over to get jobs. In fact, india also get migrants from Eastern Europe, US, Russia and Europe. Get educated and get rid of ur ignorance. Soon china and India will become major innovation hubs as us has decided it wants to be “white” again, foolish and self destructive!

    • noh1bvisas

      back to my original point. America needs to put America first. The people have spoken. Making it better for h1bs is not in the national interests of America.

      As for my statement of FACT that india is indeed a 3rd world country, it was in response to raj’s “little man syndrome” that india is the greatest country on the planet. it is nothing but a source of cheap labor.