Proposal to hike minimum wages of H-1B

If implemented, it will become very difficult for organisations to fulfil the minimum wage limit, discouraging hiring of H-1B visa holders altogether


The US Department of Labour has suggested increasing the minimum wages of H-1B visa holders. A proposal to this effect was submitted by the US Department of Labour, to the White House Office of Management and Budget last week. If implemented, it will have a serious impact on the H-1B visa scheme, as it will become challenging for companies to fulfil the minimum wage limit, especially the startups and the small and mid-size organisations.

The wage levels are decided by the Labour Department on the basis of the prevailing rates for a given role across various regions in the US. A majority of the companies who bring in workers on H-1B visas pay 20 per cent higher wages to them as compared to the average salaries in the market.

The proposal seeks a restructuring in wage levels of H-1B, H-1B1, E-3 and PERM (Employer Sponsored Green Cards)

Most Indian technology companies have already stepped up local hiring owing to the restrictions and uncertainty surrounding the H-1B visa programme. H-1B visa holders are employed at four levels. In the past, the practice was to hire employees at Level 1. However, after 2017, following criticism and protests, several businesses shifted to hiring at Level 2, although it was quite challenging, given that the wages could differ from one level to another, in the range of $10,000 to $ 15,000. The proposed changes may require companies to hire at Level 2 or Level 3, which will actually discourage them from employing H-1B holders altogether.

While the proposal details have yet to be made public, it is expected to receive approval before the November elections, and will, in all probability be implemented immediately.

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