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How the Stimulus Bill Affects H1-B Workers

March 2009
How the Stimulus Bill Affects H1-B Workers

It has become a familiar scenario over the past few years: tens of thousands of foreign workers (and their employers and lawyers) eagerly awaiting April 1st, so they can snap up H1B Specialty Occupation Worker visas. Every year, there are more and more applications, for 65,000 visas. And every year, the chance of winning an opportunity to have your case processed (although not necessarily approved) through the H1 lottery becomes a little less.

Then we come to the current financial crisis, and the much-debated stimulus plan. As we hear more of CEOs who take bailout money and then proceed to go on lavish taxpayer-paid company vacations and give themselves large bonuses, the American public is much more wary of being taken for a ride by companies seeking money through Congress. In early February, it was revealed that as the economy was collapsing last year and lay-offs were beginning, the dozen U.S. banks now receiving the biggest rescue packages requested H1 visas for tens of thousands of foreign workers to fill high-paying jobs. The banks, which have received $150 billion in bailout funds, requested visas for more than 21,800 workers over the past six years for senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists. The average annual salary for those jobs was $90,721, nearly twice the median income for all American households. The numbers of visas sought by the dozen banks increased by nearly one-third, from 3,258 in the 2007 budget year to 4,163 in fiscal 2008. During the last three months of 2008, the largest banks that received taxpayer loans announced more than 100,000 layoffs. The number of foreign workers included among those laid off is unknown.

Foreigners are attractive hires partly because companies have found ways to pay them less than American workers. Companies are required to pay foreign workers a prevailing wage based on the job's description. But they can use the lower end of government wage scales even for highly skilled workers; hire younger foreigners with lower salary demands; and hire foreigners with higher levels of education or advanced degrees for jobs for which similarly educated American workers would be considered overqualified.

The use of visa workers by ailing banks angers Sen. Chuck Grassley of Iowa, the senior Republican on the Senate Finance Committee. "In this time of very, very high unemployment ... and considering the help these banks are getting from the taxpayers, they're playing the American taxpayer for a sucker," Grassley has said. Grassley, with Sen. Richard Durbin, an Illinois Democrat, pushed for legislation to make employers recruit American workers first, along with other changes to the visa program. On February 13th Congress barred firms receiving government bailout from hiring foreign workers through the H1-B program, if they are replacing American workers. Restricting hiring of H1-B visa holders forms part of the American Recovery and Reinvestment Act, widely known as the stimulus bill, which will go into law only if signed by President Obama.

On one hand, this will allow smaller companies (assuming they do not receive bailout money) a better opportunity to hire through the H1 program; on the other hand, it seems unlikely in the face of the current economic crisis, and this bill in particular, that the H1 quota will be increased anytime in the coming years. As of now there has been no indication that Congress will be changing the general H1 program in any way, and almost certainly not before the next quota opens up on April 1st of this year.


FAMILY India                      Pakistan/Bangladesh

1st 22Jul02             22Jul02

2A 01Jul04 01Jul04

2B 22Jun00 22Jun00

3rd 08Aug00 08Aug00

4th 01Mar98 01Mar98

EMPLOYMENT India           Pakistan/Bangladesh

1st Current Current

2nd 15Feb04 Current

3rd 15Oct01 01May05

Other 15Oct01 15Mar03

4th Current Current

5th Current Current

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