H-1B Visa Bill Introduced In US, Minimum Pay More Than Doubled

Posted by Jeff Pelliccio on Mar 13, 2017 9:00:00 AM

In ICS insights

After years of controversy and debate, a bill has finally been introduced to the House of Representatives that aims to change the H-1B visa program.  This program has been the center of controversy for years.  Proponents claim that it is the best way to bring highly skilled workers into the United States, while opponents of the bill believe it has been abused to displace American workers and replace them with cheaper foreign labor, primarily from India. 

To address these concerns, Congressman Zoe Lofgren of California has introduced the High-Skilled Integrity and Fairness Act of 2017.  The bill seeks to make mainly three changes to the current H-1B visa program: 

  • Prioritizes the allocation of H-1B visas to companies willing to pay 200% of the average wage for a position, as calculated by a survey. 
  • Eliminates the lowest pay category. 
  • Raises the “exempt” salary to $130,000. 

According to supporters of the bill, these changes will update the H-1B visa program and return it to its original purpose- to attract high-skill and high-wage workers who will contribute to the economy and job creation.  In fact, the new exempt wage of $130,000 will more than double the old exempt wage of $60,000.   

The bill also seeks to change several smaller aspects of H-1B visas.  Small and start-up employers will have access to 20% of the visas, ensuring that they will be able to compete for the best foreign workers.  There are also a number of statutes in the bill addressing the issue of reducing benefits for existing workers. 


How Do The H-1B Changes Impact Employers

One of the most significant changes that this bill would bring to employers, if it becomes a law, is that they would no longer be able to find cheaper labor for high-skilled jobs in foreign markets.  Many companies have become reliant upon hiring their engineers and computer programmers.  The overall effect of these changes, however, would be far-reaching. 

Immediately, many companies will likely discover that it no longer makes budget-sense to hire workers with the H-1B visa system.  The increase of the base exempt salary, along with the increase of the overall salary for priority of visas, means that many firms would do better to simply keep their existing labor force than look to outside the United States for replacements.  This, of course, is the intention of the bill, which seeks to correct what many see as an abuse of the H-1B visa program. 

Raising the minimum required salary and giving priority to high wage earners would also likely cause an upward push for wage growth.  As the ability to get foreign workers becomes more restricted, many companies will be forced to improve working conditions and wages for their domestic workforce.  Other economists have theorized that companies will choose to combine several positions together and restructure their organizations so that the workers they have will be able to become more productive.  They acknowledge, however, that there may be some limits to how well this works in occupations that rely on creativity and critical thinking, rather than mass production.

Ultimately. this law will result in an increase in demand for top talent that is native to the United States.  However, employers will find that native talent is hard to find in some industries due to lack of experience or education.  As demand for domestic workers increases, many schools will consider adding programs that prepare their graduates for these jobs.  As the level of qualified candidates increase, companies will also see increased competition for the best candidates, making it necessary to consider the needs and wants of their workers.  The days of cheap foreign labor and the logic behind hiring them over native talent are going extinct, while the fruitful days of the natives are evolving. 

When it no longer gives companies an economic advantage to hire workers from outside the United States, it will become necessary for them to reevaluate their hiring procedures.  While it can be hard to predict the exact changes this law will bring, nearly everyone agrees that it will be a dramatic shift in the way many companies treat their workforce.  If you think your company will be affected by this bill, call the recruiting professionals at ICS.  They have years of experience helping companies find the best candidates for their workforce.