A new EPI report sheds light on the H-1B visa program and the prevailing wage levels in the program, finding that nearly all H-1B employers—including major U.S. tech firms—are using the program to pay migrant workers well below market wages.
The report’s release comes after President Trump issued an executive order to suspend permanent immigration during the coronavirus crisis that could reduce green cards by nearly one-third, if it were extended for a full year. However, the issuance of nonimmigrant, temporary work visas like H-1B has not been suspended or restricted by the order, reportedly because of intense pressure from tech firms and business groups.
“The H-1B visa program is an important vehicle for attracting skilled workers to the United States, but it is in desperate need of reform,” said Daniel Costa, EPI director of immigration law and policy research and co-author of the report. “Its fundamental flaw is that it permits U.S. employers to legally underpay H-1B workers relative to U.S. workers in similar occupations in the same region.”
Key findings include:
- A total of 60% of all H-1B jobs are assigned wage levels that are well below the local median wage. This translates into salaries that are significantly lower than local median salaries—17% to 34% lower on average for computer occupations, which are among the most common H-1B occupations.
- A small number of employers dominate the program. While over 53,000 employers used the H-1B program in 2019, the top 30 H-1B employers accounted for more than one in four of all 389,000 new and continuing H-1B petitions approved by U.S. Citizenship and Immigration Services in 2019.
- Major U.S. firms use the H-1B program to pay low wages. Among the top 30 H-1B employers are major U.S. firms including Amazon, Microsoft, Walmart, Google, Apple, and IBM. All of them take advantage of program rules in order to legally pay many of their H-1B workers below the local median wage for the jobs they fill.
- Half of the top 30 H-1B employers use an outsourcing business model. These companies place their H-1B hires at third-party client sites, rather than employing H-1B workers directly. They rely on the H-1B program to build and expand their business, which sometimes includes sending U.S. jobs overseas.
The report’s authors recommend several policy reforms, including having the U.S. Department of Labor increase the H-1B’s minimum salary level and require that wage offers to H-1B workers never be lower than the national median wage for a given occupation. To ensure a more permanent solution that prevents future administrations from reducing wage levels through executive action, Congress should enact a statute setting reasonable minimums for H-1B wage levels. The H-1B and L-1 Visa Reform Act of 2017, introduced by Senators Chuck Grassley (R-Iowa) and Richard Durbin (D-Ill.), would vastly improve the H-1B program along these lines.
“Most H-1B employers are taking advantage of a flawed H-1B prevailing wage rule to pay their workers well below market wages,” said report co-author Ron Hira, an EPI research associate and associate professor of public policy at Howard University. “It is long past time for the Department of Labor and Congress to act to prevent H-1B migrant workers from being underpaid and exploited.”