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New H1B Wage Rule - How it works and effects

As per the reports, Donald Trump’s administration furthered his protectionist agenda by replacing the current randomized lottery system for selection with a newer system that will prioritize wages. These final rules ensure that the H-1B regime will give priority to higher wages and skills in issuing visas, as announced by the US department of labor (DOL).

In addition to that, they have also increased the mandated wages for those working in the US on H-1B visas or holding employment-based green cards.

The move is designed to protect American workers from cheaper, foreign labor.

Although, it has the potential to affect the Indian H-1B visa holders and aspirants, such as students as they are amongst the biggest beneficiaries of the visa.

New Wage-Based H-1B Work Visa Regime :-

Under these new wage rules, priority in the selection of visas will be given to applications of those employers where the “proffered wage equals or exceeds” the prevailing level in that area of employment.

Here, the referred wage is the amount that the employer intends to pay the beneficiary. 

This rule will be applicable to the 65,000 regular visas and the 20,000 advanced degree exemption visas.

How Does It Work?

Usually, the US department of labor uses ‘occupational employment statistics’ (OES) data to determine prevailing wages, or average wage paid to employees in a particular occupation and area, in a wide variety of occupations.

Further, this prevailing wage is subdivided into four tiers based on entry-level to experienced level.

Under this new rule, H-1B workers at the lowest wage level must receive at least the 35th percentile of the prevailing wage for their job type and location, an increase from the 17th percentile earlier. 

According to this, the workers at the highest wage level must receive the 90th percentile.

The US Department of Labor mentioned that the existing required wage levels had been in place for 20 years. 

While talking about the need, Labor Secretary Eugene Scalia said, “The US Department of Labor is taking these steps to strengthen wage protections, address abuses in visa programs, and protect American workers from being undercut by cheaper foreign labor,”.

How Does It Affect?

This new rule will mostly affect the foreign students, fresh graduates and those with a couple of years of experience and seems to be the biggest loser in this deal. 

Due to the wage-based selection, employees at senior executives that have higher salaries, have better chances of getting their petitions selected. 

So this will leave out freshers whose salaries will not make them eligible for petitions.

So far, Universities have expressed their concerns as these changes will have a detrimental effect on the attractiveness of a US education for foreign students.

This will also lead to uncertainty on whether they will be able to work in the US for at least some time after graduation.


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