Most US H-1B employers pay migrant workers well below market wages, says report

A majority of the US H-1B employers, including tech giants like Facebook, Google, Apple and Microsoft, use the temporary work visa programme to pay the migrant workers well below market wages, a new report has claimed.

The H-1B is a non-immigrant visa that allows US companies to employ foreign workers from countries like India and China in specialty occupations that require theoretical or technical expertise.

Nearly 500,000 migrant workers are employed in the US in the H-1B status.

"Among the top 30 H-1B employers are major US firms including Amazon, Microsoft, Walmart, Google, Apple and Facebook. 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," said the report released by the Economic Policy Institute.

Authored by Daniel Costa and Ron Hira, the report titled "H-1B visas and prevailing wage levels" says 60 per cent of H-1B positions certified by the US Department of Labor (DOL) are assigned wage levels well below the local median wage for the occupation.

While the H-1B programme rules allow this, the DOL has the authority to change it, but has not, it said.

While over 53,000 employers used the H-1B programme in 2019, the top 30 H-1B employers accounted for more than one in four of all 389,000 H-1B petitions approved by the US Citizenship and Immigration Services in 2019, it said.

Half of the top 30 H-1B employers use an outsourcing business model to provide staff for third-party clients, rather than employing H-1B workers directly to fill a special need at the company that applies for the visa, the report said.

The report alleged that major US-based technology firms that hire H-1B workers directly, rather than contract them out to third-party employers, had significant shares of their certified H-1B positions assigned as Level 1 or Level 2, the two lowest wage levels in fiscal 2019, both of which are below the local median wage.

"Until now, much of the public discourse and proposals for reforming H-1B have focused on rules that would constrain the practices of these outsourcing companies," the report said.

But researches reveal that many firms that employ H-1B workers directly, including some of the biggest names in the technology industry such as Amazon, Google, Microsoft, Apple, Qualcomm, Salesforce and Uber, pay a large share of their H-1B workers at one of the two lowest wage levels, Level 1 or Level 2.

In addition, these direct-hire firms also hire many H-1B workers on a contract basis through outsourcing firms, it added.

Microsoft, the seventh-largest H-1B employer in 2019, assigned one-third (35 per cent) of its positions on Labor Condition Applications (LCAs) as Level 1 and two-fifths (42 per cent) as Level 2. In total, Microsoft assigned more than three-quarters (77 per cent) of its H-1B positions as Level 1 or Level 2, a wage level below the local median wage.

Microsoft assigned only 18 per cent of its positions as Level 3 (the median) wage, and a mere three per cent as Level 4, the only above-median wage level.

Amazon, which appears twice in the H-1B top 30, as "Amazon.com Services" (no. 4 among the biggest H-1B employers) and "Amazon Web Services" (no. 27), also assigned the vast majority of its H-1B positions at one of the two lowest wage levels.

According to the report, Amazon.com Services assigned 34 per cent of its H-1B positions as Level 1 and 51 per cent as Level 2, for a total of 86 per cent of all positions certified.

Amazon Web Services assigned 47 per cent of its H-1B workers as Level 1 and 36 per cent as Level 2. Combined, Amazon.com Services and Amazon Web Services had 12,428 positions certified at Level 1 or 2, for a total of 85 per cent certified at a wage level below the median. Only one in eight (1,684) were certified at or above the 50th percentile (Level 3 or Level 4), it said.

Apple, eleventh on the list, assigned 558 of its H-1B positions (two per cent) as Level 1 and one-third (32 per cent) as Level 2, for a combined total of 34 per cent at Levels 1 and 2. Apple assigned 32 per cent as Level 3 and 34 per cent as Level 4.

Google, ranked the fifth-largest H-1B employer, had 9,085 H-1B positions certified by the DOL in fiscal 2019. It assigned less than half of one per cent of its certified H-1B jobs as Level 1 and 54 per cent as Level 2. Only 37 per cent of Google's jobs were certified at or above the median wage, the report said.

Facebook assigned only one position as Level 1 and 10 per cent of its 6,118 total H-1B positions as Level 2. Twenty-five per cent were certified at Level 3 and 16 per cent at Level 4. Nearly half (49 per cent) of Facebook's H-1B positions were certified at a wage established by an alternative wage survey, making it difficult to assess its H-1B wage distribution, it said.

Uber, the 29th-ranked H-1B employer in 2019, had 5,708 H-1B positions certified by the DOL. Less than one per cent was assigned as Level 1 and just over half (53 per cent) as Level 2. Just over one-third were assigned as Level 3 and 13 per cent as Level 4.

While Uber had 5,708 H-1B positions certified by DOL and hired 1,160 H-1B workers in 2019, in the same year, it made headlines by laying off 400 employees.

The report claims that the top 30 H-1B employers are in fact hiring H-1B workers to fill a very large number of routine (Levels 1 and 2) positions that require relatively little experience and ordinary skills.