Impact of Proposed Wage Increase Requirement for H-1B Professionals

A report entitled Analysis: A Minimum Wage of $128,000? The Impact of Immigration Legislation on Salaries and U.S. Competitiveness was released by the National Foundation for American Policy (NFAP).  It examines the provisions on pending bills (HR 2131 and S 744) that effectively inflates the H-1B minimum wage requirement for foreign skilled workers, under the premise that they are generally paid less compared to their native counterparts.

Here are some excerpts from the report:

What would companies do if a new minimum wage of $128,294 per year were established? If current House or Senate immigration legislation becomes law, then we may soon find out. Under a premise, not supported by research, that H-1B visa holders are generally paid less than their U.S. professional counterparts, bills in Congress would require skilled foreign nationals to be paid substantially more – sometimes $20,000 to $40,000  more per year–than U.S. professionals in similar positions.

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Forcing employers to pay artificially higher wages for foreign talent will encourage companies to place more engineers and other skilled foreign nationals abroad, where more investment dollars will flow. That will not benefit U.S.-born professionals in the technology field.

Mandating higher wage rates for skilled foreign nationals on H-1B visas than the market wages for U.S. professionals in the same roles (and experience levels) is likely to have numerous consequences, many of them unintended. Such a policy is likely to:

• Discourage the hiring of skilled foreign nationals in the United States. This would conflict with parts of H.R. 2131 and S. 744 to increase the number of H-1B visas and employment-based green cards.

• Harm startup companies needing key personnel but unable to afford the higher wage rates, including the potential impact on the wages of current staff.

• Interfere with company salary structures.

• Complicate and discourage sponsorship for green cards (permanent residence).

• Raise the possibility of legal liability for companies if they pay comparable U.S. professionals less than foreign nationals.

• Lead more employers to move work offshore to avoid the wage rules and the negative impact on their companies.

• Result in higher overall compensation costs, leading to less money available for company investment in the United States.