Relevant snippet from article: “H1B applicants will need to be earning a salary equivalent to the 45th percentile of their profession's salary if they're an entry-level worker, rising to 95th percentile for higher-skilled workers. “
Previously was 17th percentile and 67th percentile.
Effective immediately.
But salary isn’t necessarily correlated with rarity of talents right? Perhaps you’re in a rural area and trying to hire someone with specific cryptography experience and a PhD - they might not warrant a 95th percentile salary for a senior developer out of grad school yet you may need to hire internationally to find someone
> The employer/agent will pay the H-1B worker a wage which is no less than the wage paid to similarly qualified workers or, if greater, the prevailing wage for the position in the geographic area in which the H-1B worker will be working.
> But salary isn’t necessarily correlated with rarity of talents right?
No, but requiring a high salary is a disincentive for companies to seek or continue with H-1B without genuinely exhausting local alternatives.
Now, personally, I think H-1B is fundamentally a bad idea and the visa category should not exist at all and prefer a radically different approach, but if you accept the premise of the H-1B, high salary floors make perfect sense as a way to improve the alignment of incentives with the notional purpose of the program.
If no one in an entire country is willing to accept $X to do $Y (in any location), the business needs to increase $X. The whole point of hiring an employee is bc $Y represents more net business value than $X. If $X > net business value of $Y, the business shouldn't be hiring for that role.
Businesses love these H1B visas because overseas candidates are willing to accept less $X since the visa represents significant value to them, but barely costs the business anything (before the recent changes). This results in artificially holding down $X for U.S. citizens, so removing incentives for businesses to take advantage of this is a good thing.
> Perhaps you’re in a rural area and trying to hire someone with specific cryptography experience and a PhD - they might not warrant a 95th percentile salary for a senior developer out of grad school yet you may need to hire internationally to find someone.
If you can't find someone in the area at a lower price, then yes they warrant a higher salary until you do find someone nationally. That's how salaries are set. Why are you looking internationally before you look nationally?
'Couldn't find someone to do it at what we wanted to pay them' isn't the same as 'couldn't find someone to do it.'
> Why are you looking internationally before you look nationally?
You look at a larger pool of people who already want to move to anyware in the States, before a much smaller pool of people who want to move to your specific rural area.
> so in essence H1B is really about restricting mobility into the States then
No, if we wanted that we'd just not have it.
The H-1B is (like other employment-driven non-immigrant visas) about meeting the labor demands of capital in the US, with restrictions on it notionally about limiting/mitigating some of the adverse effects on domestically-resident labor.
So I’m actually already working remotely on around ~$100k in the U.K. my partner starts her postdoc at Stanford next summer and I can get a J2 to move across but I think I’ll need to quit this work until I get a work permit out there? If there’s any sort of workaround I’m really keen to know of it!
I think you can work normally on a J2. You need a 'Employment Authorization Document' but I think that's just a formality and is easy to do. I think there's some funny rule about not 'supporting' the J1 holder though, so I don't know if you can earn more than her which you probably would if she's a postdoc? I'm not a lawyer - you should instruct one.
But it’s recursive. If something is that scarce, all the comps will already be high. It doesn’t seem necessary that marginal labor should be required to come in at the 95th percentile.
Normally, those high comps would motivate people into earning the credentials for taking that career path. But you can't address local scarcity in this way when the law incentives you to instead import cheap labor from abroad.
It may just mean that tying immigration to employment invites abuse. If one wants to support immigration per se, it would be better to just bring in X number of people per year by whatever criteria you want (could even be skills or education based, who knows), and then give them total economic freedom within the US.
Discouraging H1B abuse, which has run rampant if you look at what larger corporations have been doing recently and for the past few decades. H1Bs should not be used to enable firing someone because someone from another country is willing to do the job for much less. https://www.computerworld.com/article/2490610/this-it-worker...
It means discouraging employers using an H1-B when they haven't actually looked at hiring locally, or using an H1-B to hire "cheap" labor because the employee has no leverage and can't really quit as easily as a US employee.
I'm not saying that I agree with "discouraging immigration", I'm stating the likely purpose of this change.
What is wrong with hiring cheap labour again? Could it be that company should fix their hiring practices and produce higher quality product, instead of the state making laws that equate "cheap" with "low quality"? So the gov should tell companies how to use their money now?
There is nothing wrong with hiring cheap labor and everyone is free to do it without applying for an H-1B visa. However, the H-1B law had passed specifically with assurances that it won't be used to hire foreign cheap labor and this is why the law specifies DOL certification ensuring that the H-1B workers are not hired at cut-rate. If you don't like it then nobody forces you to apply for H-1B.
I'm not applying to any visa thank you. I'm just pointing out the hypocrisy. The work visa was clearly created for America's economic interests, but now it's about not hiring cheap labor somehow? As if cheap labor is principally damaging to America? I'd like to see the evidence. Why would a law be passed with those oddly specific assurances if not that some people think cheap labor is bad?
Sorry, your argument does not make sense to me. If I understood correctly you assert that if importation of cheap labor via H-1B program is prohibited by law then it means all cheap labor is bad from the POV of the law authors. I believe if you thought more than 15 seconds you could have found some logical faults with this.
Why would foreign cheap labour be bad? And local cheap labour is OK? An foreign "not cheap" labour is also OK? It seems to imply foreign or cheap is bad, the combo doubly so, to the degree that it needs to be restricted.
The most obvious reason I see is that foreign labor cannot vote while domestic can. Since both compete for the same jobs the politician supporting foreign labor is risking losing votes. The more expensive is the labor the less votes it represents and politicians can get away with supporting "highly specialized" foreign labor as the money they get from employers of that labor outweigh the votes they lose from the domestic highly specialized workers displaced by the foreigners.
That's the broader Trump Administration policy it's part of, yes, but this could potentially be one of the more lasting components should Trump be replaced, because it's eminently sensible if you accept that the basic overt purpose of the H-1B is good and the basic structure of the H-1B is a good way of serving that purpose.
Yeah 95 is high compared to today. Even FAANG aims for 80-90% of market compensation today. Even FAANG will have to shift stock vs cash compensation for all workers (including american) because of this.
For small to medium companies, I am guessing many will be forced to try remote work in other countries because of this.
> If you're applying for a junior role and you're earning above the median you'll be in the clear. If you're applying for a senior role you'll need to be above the 90th percentile
Couldn't a company just re-designate a senior role as a junior role, and pay a person with lots of experience coming from abroad a junior person's wage (which probably is still a lot more than what they made in their previous country of residence)?
With H1B you need to prove that you are unable to hire anyone from the US for the given position, including actually having to show that you have interviewed candidates and had a job listing up. Alongside having to pay a salary thats above the market average for the position.
> need to prove that you are unable to hire anyone from the US for the given position, including actually having to show that you have interviewed candidates and had a job listing up
This requirement is called “labor certification”, and it only applies to the EB-2 and EB-3 “immigrant visas” (ie green cards).
There is no labor certification requirement for the H-1B.
The prevailing wage requirement applies to both the H-1B as well as the EB-2 and EB-3.
Super easy to go around. Just make the posting tailored to your specific candidate: “a mechanical engineer, 15 years of experience with solidworks and fluent in English, Russian and Hebrew. Must be willing to relocate to Knoxville, TN”. I guarantee you’ll find zero people in eastern TN who fit that description.
Absolutely, and that could be a fig leaf that many companies will use as cover, that won't hold under any inspection, when you can expect big penalties.
If you are an immigrant that wants to escape a dictatorship there are many other and better ways. The H1B I don't believe is meant for political issues.
I am not a USA citizens, but this already set a lower ceiling to America companies that want to hire me. I don't see it as a bad thing. Maybe they simply won't hire me, or maybe they will just open branches somewhere else.
Arguably, winners are also folks trying to transition from an F1 to an H1B; culling mass applications from relatively low paying consultancies leaves more room in the lottery for new grads trying to stay in the country.
- Rules like these are designed to prevent wage deflation in-situ work in the US.
- SV engineers push for remote-first or remote-friendly workplaces.
- There is an enormous pool of talent overseas willing to relocate to the US for ~50% of an american worker, and obviously much less than that if they work remote.
Connect the dots and it's obvious that a few things will happen.
1. The H1-B jobs won't be replaced with American workers. They will be replaced with remote workers that earn even less.
2. This wage deflation will eventually percolate to us "low skilled" engineers. (Low-skilled ~meaning a RoR pipe fitter).
3. The remote work cat is out of the bag, so we'll finally see some traction in efforts to unionize software developers at Big Co. The unions will obviously restrict hiring foreign workers.
4. The effects of unionizing at BigCo on the startup ecosystem are REALLY hard to predict. It's a fun thought experiment.
Overall, this will be a net loss for humanity as a whole, but could maybe be short-term good for SV/american tech workers.
When you hire an H1B you have to do something called a Labor Condition Application where you mention the occupation, salary offered and compare it against the prevailing wage. The salary offered needs to be higher than the prevailing wage.
You can find the prevailing wage for each occupation code at flcdatacenter.com
How are roles/employees mapped to the seniority level which corresponds to the 45/95 percentile bounds? Is this a sliding scale or a binary distinction?
No one seems to be talking about the unintended consequence of this policy(or in this Administration's case a likely intended).
It's the same thing with minimum wage - politicians feel good raising it and for those that remain employed it is a good thing. But it ends up in fewer job opportunities, causing further unemployment.
This looks like a great policy at face value but in the end, it's going to mean many fewer H1B's. This is a win-win for the Trump administration because it looks like they're doing the right thing and perhaps they are, but it's also keeping foreign workers out and providing Americans with more jobs, which is exactly what they want.
This policy will encourage outright outsourcing of jobs and remote hiring, especially coming now as companies just got more comfortable with employees working 100% remote because of covid. The side effect will be the US economy losing on taxes, economic activity and hiring activity caused by extra people with high paying jobs.
I think it is actually the intended policy. It would probably be the same under any administration. Abuse of the current system essentially incentivises consulting companies to compete with each other based on salary structure. The ones willing to lay existing workers off fast enough, and repeat often enough, have a steady supply of low-cost workers and can undercut their competition. Other companies are forced to copy in a race to the bottom. This is obviously hurtful to the laid-off workers and their families, and to the unemployment insurance system's balance sheet. So there are obvious, purely functional and apolitical reasons to re-adjust the incentives.
efinancialcareers always publishes completely made up numbers and articles. I 100% advise to ignore everything you see there and wait for a real newspapers, especially for a subject as important as salary and visas.
Just a quick note for people unfamiliar with bank titles, a VP title is generally gained around 5 years of experience (or 3 with a graduate degree.)