H-1B Work Visa Myths and Misconceptions
The H-1B visa program receives a great deal of flak nowadays.
Proponents of this program often maintain that US companies desperately need it in order to draw the high-tech manpower that they need in order to succeed.
Critics argue that this program needlessly displaces US workers - or worse, that there is no manpower shortage, and that the entire program is merely a way for greedy capitalists to get cheap labor.
As often happens, a great many misconceptions have arisen from this controversy.
Let us examine a few of the more common claims regarding this program.
Myth: H-1B workers are a source of cheap labor.
Reality: This claim has some basis in reality, but only some.
As often happens when it comes to immigration issues, the truth has been eclipsed by hype and hysteria.
There are doubtlessly companies who choose to pay their H-1B workers exploitative wages.
Such situations are bound to occur, despite any system of checks and balances.
By all indications though, the real extent of this problem has been vastly overstated.
I'm sure that most of us have heard stories of companies that do hire H-1B workers and pay them exploitative wages.
I will not deny that such situations occur, especially since I've seen it happen myself.
However, we should recognize that this is anecdotal evidence at best, and that it does not necessarily reflect the H-1B situation in general.
Some critics point to the minimum salary requirements for H-1Bs, as given on the labor certifications that are filed with their visa applications.
We should note, however, that these are just the minimum salary requirements, and that the actual salary levels paid can be much greater.
For example, the National Foundation for American Policy asked a prominent law firm to examine the salary figures from 100 randomly selected H-1B cases in their client files.
These files contained both the prevailing wage level and the actual salary levels as reported to the USCIS.
On the average, the average wage was more than 22% higher than the prevailing wage.
Nor does this figure consider possible wage increases that may have been granted after the applicant had been hired.
Additionally, we should not that your average H-1B applicant will be fairly young-typically, a recent college graduate.
As a result, these applicants can be expected to earn much less than Americans who work in the same field.
This is yet another reason to believe that these claims of underpaid H-1Bs are grossly exaggerated.
In fact, the National Science Foundation reports that foreign-born professionals (H-1B or otherwise) actually earn more than their American counterparts when one compares individuals with the same ages and degree levels, and when one considers the year in which these degrees were granted.
Finally, we should also consider the onerous expenses involved in employing an H-1B applicant.
When hiring a US citizen, the costs generally stop with the job offer, but not so with H-1B visa applicants.
Typically, hiring on an H-1B basis requires nearly $6000 in additional legal and government fees - and that does not include the cost of the extra work required from in-house human resource personnel.
If the employee seeks green card sponsorship (as they often do), this can require an additional $10,000-maybe more.
On top of that, H-1B visa and green card sponsorship can be risky propositions with no guarantee of success.
Perhaps some companies do sponsor H-1B holders in order to save money, but if so, these savings would be tremendously offset by the additional expenses and legal headaches involved.
Myth: H-1B workers do not have to pay taxes.
Reality: This rumor is rooted in some inaccurate claims made through a popular anti-H1-B website-claims that became further distorted as they were disseminated via cyberspace.
Unfortunately, while the author of that site was probably sincere, that claim was simply inaccurate.
Calling it a wild exaggeration would be quite generous.
The site (titled "Zazona") alleged that H-1B workers can avoid paying income tax if they work for a so-called "body shop" - that is, a consulting firm that supplies foreign labor to US companies.
First, we should not that the vast majority of H-1B workers do NOT work for such outfits.
Second, there is no such exemption for employees of such body shops.
Quite simply, if you are an employee in the USA, then you are subject to US tax and labor laws.
This means that you must pay income tax, period.
Some consulting firms doubtlessly flout these laws, but that does not mean that H-1B workers are exempt from income taxation.
It's also worth noting that H-1B workers are obligated to pay social security taxes, even though they cannot claim unemployment benefits.
In this respect, they are actually paying additional taxes even though they cannot reap the full benefits of these expenses.
And of course, H-1B holders are also obligated to pay for Medicare, sales taxes, property taxes, and capital gains taxes, just like most US citizens.
Myth: H-1B visas are for highly qualified tech workers Reality: This claim shows that misconceptions abound on both sides of this issue.
In principle, one might expect that companies would use the H-1B program primarily to recruit tech workers with outstanding credentials.
In practice though, this isn't necessarily the case, nor are companies required to recruit only the best and brightest.
In fact, in most cases, applicants are only required to have a four-year degree or equivalent work expertise.
This does permit them to hire foreigners who are minimally qualified, if they so choose.
Given the legal hassles and expenses involved in recruiting H-1B applicants though, companies do have a vested interest in recruiting candidates with the best qualifications possible.
Finally, while the vast majority of H-1B workers are employed in science, engineering, or computer programming, the H-1B category is not limited to these fields.
Internationally acclaimed fashion models can use the H-1B category, for example.
In practice though, one should expect them to use the P category instead, which did not exist when the H-1B program was first implemented.
A great deal more can be said about the problems within the H-1B program.
At the same time though, much more can also be said about the exaggerated claims of damage that result from this program.
As with many other issues, one must take special care to examine the claims made by both sides, separating cold fact from politicall and emotionally inflamed hype.
Proponents of this program often maintain that US companies desperately need it in order to draw the high-tech manpower that they need in order to succeed.
Critics argue that this program needlessly displaces US workers - or worse, that there is no manpower shortage, and that the entire program is merely a way for greedy capitalists to get cheap labor.
As often happens, a great many misconceptions have arisen from this controversy.
Let us examine a few of the more common claims regarding this program.
Myth: H-1B workers are a source of cheap labor.
Reality: This claim has some basis in reality, but only some.
As often happens when it comes to immigration issues, the truth has been eclipsed by hype and hysteria.
There are doubtlessly companies who choose to pay their H-1B workers exploitative wages.
Such situations are bound to occur, despite any system of checks and balances.
By all indications though, the real extent of this problem has been vastly overstated.
I'm sure that most of us have heard stories of companies that do hire H-1B workers and pay them exploitative wages.
I will not deny that such situations occur, especially since I've seen it happen myself.
However, we should recognize that this is anecdotal evidence at best, and that it does not necessarily reflect the H-1B situation in general.
Some critics point to the minimum salary requirements for H-1Bs, as given on the labor certifications that are filed with their visa applications.
We should note, however, that these are just the minimum salary requirements, and that the actual salary levels paid can be much greater.
For example, the National Foundation for American Policy asked a prominent law firm to examine the salary figures from 100 randomly selected H-1B cases in their client files.
These files contained both the prevailing wage level and the actual salary levels as reported to the USCIS.
On the average, the average wage was more than 22% higher than the prevailing wage.
Nor does this figure consider possible wage increases that may have been granted after the applicant had been hired.
Additionally, we should not that your average H-1B applicant will be fairly young-typically, a recent college graduate.
As a result, these applicants can be expected to earn much less than Americans who work in the same field.
This is yet another reason to believe that these claims of underpaid H-1Bs are grossly exaggerated.
In fact, the National Science Foundation reports that foreign-born professionals (H-1B or otherwise) actually earn more than their American counterparts when one compares individuals with the same ages and degree levels, and when one considers the year in which these degrees were granted.
Finally, we should also consider the onerous expenses involved in employing an H-1B applicant.
When hiring a US citizen, the costs generally stop with the job offer, but not so with H-1B visa applicants.
Typically, hiring on an H-1B basis requires nearly $6000 in additional legal and government fees - and that does not include the cost of the extra work required from in-house human resource personnel.
If the employee seeks green card sponsorship (as they often do), this can require an additional $10,000-maybe more.
On top of that, H-1B visa and green card sponsorship can be risky propositions with no guarantee of success.
Perhaps some companies do sponsor H-1B holders in order to save money, but if so, these savings would be tremendously offset by the additional expenses and legal headaches involved.
Myth: H-1B workers do not have to pay taxes.
Reality: This rumor is rooted in some inaccurate claims made through a popular anti-H1-B website-claims that became further distorted as they were disseminated via cyberspace.
Unfortunately, while the author of that site was probably sincere, that claim was simply inaccurate.
Calling it a wild exaggeration would be quite generous.
The site (titled "Zazona") alleged that H-1B workers can avoid paying income tax if they work for a so-called "body shop" - that is, a consulting firm that supplies foreign labor to US companies.
First, we should not that the vast majority of H-1B workers do NOT work for such outfits.
Second, there is no such exemption for employees of such body shops.
Quite simply, if you are an employee in the USA, then you are subject to US tax and labor laws.
This means that you must pay income tax, period.
Some consulting firms doubtlessly flout these laws, but that does not mean that H-1B workers are exempt from income taxation.
It's also worth noting that H-1B workers are obligated to pay social security taxes, even though they cannot claim unemployment benefits.
In this respect, they are actually paying additional taxes even though they cannot reap the full benefits of these expenses.
And of course, H-1B holders are also obligated to pay for Medicare, sales taxes, property taxes, and capital gains taxes, just like most US citizens.
Myth: H-1B visas are for highly qualified tech workers Reality: This claim shows that misconceptions abound on both sides of this issue.
In principle, one might expect that companies would use the H-1B program primarily to recruit tech workers with outstanding credentials.
In practice though, this isn't necessarily the case, nor are companies required to recruit only the best and brightest.
In fact, in most cases, applicants are only required to have a four-year degree or equivalent work expertise.
This does permit them to hire foreigners who are minimally qualified, if they so choose.
Given the legal hassles and expenses involved in recruiting H-1B applicants though, companies do have a vested interest in recruiting candidates with the best qualifications possible.
Finally, while the vast majority of H-1B workers are employed in science, engineering, or computer programming, the H-1B category is not limited to these fields.
Internationally acclaimed fashion models can use the H-1B category, for example.
In practice though, one should expect them to use the P category instead, which did not exist when the H-1B program was first implemented.
A great deal more can be said about the problems within the H-1B program.
At the same time though, much more can also be said about the exaggerated claims of damage that result from this program.
As with many other issues, one must take special care to examine the claims made by both sides, separating cold fact from politicall and emotionally inflamed hype.
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