The House Judiciary Committe Reviews the H-1B Visa Program

The House of Representatives Judiciary Committee reviewed the current H-1B visa program on March 31, 2011, titled “H-1B Visas: Designing a Program to Meet the Needs of the U.S. Economy and U.S. Workers.”  In his opening statement, Committee Chairman and Representative Lamar Smith declared a need to either increase the number of H-1B visas available annually or “examine what sort of workers qualify for H-1B visas.”  The committee also reviewed the governments programs to prevent and investigate fraud and misuse of the H-1B visa program.

In addition to Rep. Smith’s statements, the committee also heard testimony from Donald Neufeld, Associate Director of Service Center Operations with the United States Citizenship and Immigration Services (USCIS).  Director Neufeld outlined the H-1B process from the Department of Labor (DOL) to the Department of Homeland Security (DHS).  He also provided oversight on DHS’s efforts to prevent and investigate fraud in the program.  Other individuals testifying before the committee included:  Bo Cooper, a partner with Berry Appleman & Leiden LLP, Dr. Ron Hira, Associate Professor of Public Policy at Rochester Institute of Technology in Rochester, New York, and former representative Bruce Morrison, Chairman of Morrison Public Affairs Group.

Based on Rep. Smith’s opening statement to the committee, “qualifying workers” may include doctorate graduates and foreign nationals earning bachelor’s or masters in science, technology, engineering, and math fields (STEM), as well as “computer-related fields.”  Former representative Bruce Morrison added in his testimony, that STEM graduates “will enhance our productivity and prosperity, growing American jobs and the American standard of living.”  However, Rep. Smith questioned the sufficiency of the safeguards in the H-1B visa program.  According to the Government Accountability Office (GAO), “H-1B employers categorize over half of their H-1B workers as entry level,” for purposes of wage determination.  Rep. Smith thenquestioned if “entry level workers really [are] the ‘best and brightest’?”

Whether an entry level wage or higher level wage applies when an employer is hiring a foreign national is relative to the occupation and the offered position.  The H-1B visa program, as Rep. Smith highlighted in the opening paragraph of his statement, “allows American employers to hire talented foreign students graduating from U.S. universities with degrees in science, technology, engineering, and math fields.” (emphasis added).  A doctorate graduate may apply for a job with a minimum requirement of a doctorate degree.  If the employer requires no additional professional experience, and the doctorate graduate has not gained any additional experience beyond the world of academia, then that individual, regardless of whether she is the “best and brightest” in her graduating class or a United States or foreign national worker, is an “entry level” worker in that category.

Rep. Smith extolled the achievements of foreign national doctorate graduates who make up 16 percent of “doctorates . . . named as inventors on a patent application,” and “have the ability to found a company that can provide jobs to tens of thousands of American workers.”  However, the Committee Chairman pointed out that a computer systems engineer working in New York earns an entry level wage of $68,370, while a “fully competent worker,” earns a wage of $120,037.  The committee needs to examine the entire H-1B process in the light of the labor market as a whole which includes the process an employer undergoes to determine the proper wage.  H-1B sponsoring employers attest to the Department of Labor that they will “[p]rovide working conditions for nonimmigrants [H-1B workers] which will not adversely affect the working conditions of workers similarly employed.”  Ergo, an employer must not depress the labor market by paying a foreign national less than a U.S. worker.  A foreign national must be paid the “required wage” which is either the higher of the prevailing wage or the actual wage paid by the employer.  20 C.F.R. § 655.731(a)(3).  The “prevailing wage” is the mean wage for workers in a certain occupation within a particular geographic area.  See 69 Fed. Reg. 77,326, 77,368 (Dec. 27, 2004).   According to the Department of Labor regulations, “The actual wage is the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question.”  20 C.F.R. § 655.731(a)(1).  If the employer is paying entry level computer systems engineers $120,037, the employer’s actual wage, which is higher than the entry level prevailing wage of $68,370, then the employer must pay the entry level foreign national $120,037, regardless of the prevailing wage.  However, if the employer is paying the prevailing wage of $68,370, the mean wage paid by the employer’s neighbors for the same offered position, then the employer must pay the entry level foreign national at least $68,370.

Dr. Hira testified on the flaws, in his opinion, of the H-1B visa program.  He stated, “Employers have told the [GAO] that they hire H-1Bs because they can legally pay below-market wages.”  (emphasis added)  Dr. Hira also fretted over the misuse of “entry level” wages for H-1B workers.  He stated that “the Department of Labor has certified wages as low as $12.25 per hour for H-1B computer professionals, an occupation where the typical median wage is more than $70,000.”  Dr. Hira did not support what the “median wage” for H-1B computer professionals is based upon, nor does he define “market wages.”  Further, Dr. Hira stated that “the Department of Labor” certified the wage in question.  The Department of Labor generally relies on the Occupational Employment Statistics Survey (OES) published by the Bureau of Labor Statistics for most professional positions.  The OES surveys wages offered in a particular occupation without discriminating based on the size of the employer or the type of employer hiring for the position in question.  Often this nondiscriminatory survey method results in a wage that is much higher than the typical employer’s actual wage.  As explained above, the wage determinations are based on the mean or average wage within a geographic area, not a median wage.  Further, the weighted average wage is calculated by each of four levels of wages based on requirements of education, professional experience, training, licensing, management responsibilities, and any special requirements for the offered position.  Mr. Cooper agreed that “Certainly there are H-1B employers who break the rules and misuse the program,” such as an employer hiring a foreign national in a “less expensive market,” but employing the same worker in a “more expensive market where the prevailing wages would be higher.”  The American people, including Dr. Hira, hear about the bad apples, but we do not hear about the majority of “employers [who] comply fully, pay well in excess of the prevailing wage, and use H-1Bs as only a tiny percentage of their overall workforce,” per Mr. Cooper’s testimony.

During his testimony, Mr. Cooper quoted one of the President’s goals in his recent State of the Union was “to out-innovate, out-educate, and out-build the rest of the world . . . to make America the best place on Earth to do business.”  To accomplish this goal, Mr. Cooper reminded the committee that President Obama emphasized the need to stop sending foreign nationals back to their “home to compete against us” as soon as they obtain an advance degree in the United States.  Former representative Morrison was a co-sponsor of the Immigration Act of 1990, which included expansion and reform of the H-1B visa program.  In his testimony Thursday, Mr. Morrison advocated not for reform in the H-1B visa program, but reform in the employment-based immigrant visa category.  However, he echoed the President’s address, “[W]e need these highly skilled [STEM] graduates as part of our economy because their presence will expand jobs for Americans.”

If Congress wants the H-1B visa program to remain open to the “best and brightest” foreign national students graduating with doctorates or in the science in technologies then employers should not be required to pay a foreign national graduate twice the wages of a U.S. graduate.  Such a requirement would chill the benefits of the H-1B visa program because U.S. employers would refuse to hire and pay foreign national graduates such outstanding wages.  The United States’ economic success, per Mr. Morrison, depends on employers being able to “draw from the full pool of U.S.-educated graduates, not just the minority that are already Americans.”  Mr. Cooper highlighted in his testimony that “as Congress evaluates the H-1B program, it does so with clear eyes and without overacting to exaggerated arguments against the program.”  The judiciary committee needs to review the H-1B visa program, both benefits and flaws, as a whole, including both the Department of Labor and Homeland Security safeguards for prevention of fraud and misuse, without drawing general conclusions from the outliers and bad apples which will exist regardless.