At its heart, the H-1B visa program addresses a fundamental issue: the need for U.S. employers to fill specialized roles when no qualified domestic candidates are available. Established under the Immigration Act of 1990, the program allows companies to hire skilled workers from abroad temporarily, ensuring they are paid prevailing wages—salaries comparable to their American counterparts.
The original intent of the H-1B program is exemplified by scenarios like a manufacturing company in the Ohio Valley. The company, on the brink of launching a state-of-the-art production line, struggles to find local mechanical engineers with the requisite expertise. Hiring skilled engineers from abroad through the H-1B visa allows the company to keep the project on track, ultimately creating over 100 local jobs. During this time, the company continues its efforts to train or hire qualified Americans.
These success stories highlight the program's potential to serve the American economy, workers, and businesses. However, the reality today often diverges from this ideal.
Challenges and Abuses in the Current H-1B System
Over the years, the H-1B program has been exploited in ways that undermine its original purpose.
Widespread Corporate Abuse
A significant portion of H-1B visas is dominated by outsourcing firms headquartered outside the U.S., such as Infosys, TCS, HCL, and Wipro. These companies leverage the program to flood the application process, securing a large share of visas.
Rather than supplementing the U.S. workforce, many H-1B workers are placed at third-party client sites to support outsourcing projects. These projects often result in jobs being transferred offshore, benefiting the outsourcing companies while displacing American workers.
The infamous 2014-15 case of Disney exemplifies this abuse. Nearly 250 American IT workers were laid off and required to train their H-1B replacements—employed by outsourcing firms like HCL and Cognizant—in exchange for severance pay. Such practices erode trust in the system and harm American workers.
H-1B Workers: Far from the “Best and Brightest”
While the H-1B program is often associated with highly skilled professionals, the reality is more nuanced. The minimum requirement for an H-1B visa is a bachelor's degree, a baseline qualification that does not necessarily equate to specialized expertise.
Reports reveal that many H-1B workers are classified at entry- or junior-level wage tiers. According to the Economic Policy Institute, 60% of H-1B positions are paid below the median wage for their occupation, creating downward pressure on salaries for all workers.
The Green Card Bottleneck
The H-1B visa's dual-intent nature allows workers to pursue permanent residency while in the U.S. Unfortunately, outdated green card allocation rules create significant bottlenecks, particularly for applicants from high-demand countries like India.
A country cap limits each nation to 7% of the 140,000 employment-based green cards issued annually. Given that Indian nationals account for nearly 80% of H-1B visas, this cap creates wait times of decades for many applicants. Families are also counted toward the cap, further reducing the number of available green cards. This dynamic traps many H-1B workers in a state of uncertainty and dependence on their employers.
Collateral Damage
The current H-1B system creates challenges for multiple stakeholders:
- American Workers: The influx of lower-paid H-1B labor displaces domestic workers, particularly in the tech industry, and discourages young Americans from entering these fields.
- H-1B Workers: Many face limited job mobility and wage stagnation due to their dependence on employers for visa sponsorship.
- International Students: The Optional Practical Training (OPT) program, often a precursor to H-1B status, allows students to work at below-market wages, intensifying competition for jobs.
Time for a Reset
To realign the H-1B program with its original intent, comprehensive reforms are needed:
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Revamp the Lottery System
- Prioritize employers with genuine labor shortages and applicants with advanced skills.
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Strengthen Wage Protections
- Ensure all H-1B workers are paid prevailing wages to eliminate undercutting of domestic labor.
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Limit Third-Party Client Placements
- Restrict the use of H-1B workers for outsourcing projects that shift jobs offshore.
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Modernize Green Card Rules
- Remove country caps and increase the number of employment-based green cards to reduce backlogs and alleviate worker uncertainty.
A Balanced Approach
The H-1B program, when implemented as intended, benefits everyone—employers, American workers, and skilled professionals from abroad. However, its current form disproportionately favors corporations, often at the expense of workers and the broader economy.
At Saluja Law, we believe in policies that uphold fairness, equity, and economic growth. Reforming the H-1B system is not just a necessity—it's an opportunity to strengthen the American workforce, foster innovation, and restore trust in a vital program.
Contact us to learn more about our commitment to meaningful reform and how we can assist you with your immigration needs.