Viewing the H-1B Program from a Different Angle

Usually foreign worker programs are viewed from a distance by observers, as useful or destructive activities, or by employers as good ways to cut wage costs. Sometimes they are seen through the eyes of U.S. workers displaced by the program. Sometimes, when abuses are severe, one sees the program from the point of view of the exploited worker.

In the case of the H-1B program – which I think should be reduced drastically and reformed – I have had an opportunity to see the program through eyes of the willing participants, people who are either in the program or who are headed towards it.

What they see and say is a mildly useful addition to the dialogue.

I happen to run a volunteer program at this time of year to help graduate students with their income tax filings at a major D.C.-area university. Some of them are H-1Bs, many others want to be. Additionally, I am a brand-new grandfather-in-law of an H-1B, who recently married a granddaughter of mine; the best man was also an H-1B. It is from those vantage points that I have learned some things about the program – all anecdotal, of course.

The H-1B people I have met, I should hasten to add, are in the engineering and software part of the program, not the school-teacher part, and are thus favored; further, they tend to be well-educated, savvy, and perhaps lucky, as some other H-1Bs are not. My observations deal with the bright side of a troublesome program and can be viewed, both with a grain of salt, and as an addendum to a CIS report I wrote last year.

These are some of the things I have found:

Initially, there is something like an open labor market. At first blush, for many of these young people (virtually all of whom are from India), getting a high-tech H-1B job looks like a process in an open market. One of them, for example, who was about to get a master's degree in information technology, had three H-1B job offers in hand, and was trying to figure out which one he preferred; others had one or two offers. Some were still looking.

The university in question runs a placement operation that exposes its grad students to numerous job opportunities; there is also a lively and apparently pretty well-informed grad student network in which there are many exchanges of job-related information. Many students had a summer job that led to an H-1B offer.

It is only later, years later, that these people will run into the strong ties that their employer has on them, as discussed later.

The level of sophistication among the job seekers. My contacts (again a favored subset of H-1B people) seemed to be quite aware of the nuances of the H-1B program, and talked knowledgeably about the statutory ceilings, the timing of the application process, and classes of jobs that were available outside the ceilings.

One particularly skilled young man discussed with me the timing of his shift from F-1 status to that of H-1B; he was well aware of the advantages to him of remaining in a variation of F-1 status (called OPT for "optional practical training") for at least a year before moving to H-1B. I asked him why he wanted to do that, and he said "obviously, for financial reasons."

He knew that the government had extended the optional practical training (i.e., post-graduate) period for F-1 nonimmigrant high-tech workers from 12 to 29 months as a favor to industry a couple of years ago and that by working as an OPT, rather than H-1B, he could avoid paying FICA and Medicare taxes while he was in OPT status. This might save him as much as $5,000.

His employer, of course, would be happy with this arrangement because it would save the employer its part of the same taxes and it would be able to hire him outside the H-1B ceilings. For more on this raid on the Social Security system, see my earlier blog on the OPT extension.

Legal Fees for H-1B workers. A good friend of mine once worked in a non-managerial job for a software company in northern Virginia that subtly exploited its H-1B programmers in two different ways. The bosses had a lovely office in Fairfax County and the programmers were in much more modest quarters in Blacksburg, near Virginia Tech. Further, the foreign workers were told that the company would sign any immigration documents presented to them, but the workers – and this was illegal – had to pay their own legal fees.

Similarly, on Monday the U.S. Department of Labor fined the Prince George's County (Md.) school system for, among other things, forcing some of their many H-1B teachers to pay visa-related legal fees, as reported this week.

In none of my one-on-one conversations in the income tax sessions (and at the wedding) did I find any evidence that these H-1B workers would have to pay legal fees, with a single partial exception. One young woman said that she had signed an H-1B contract with an employer that called for her to pay $3,000 in legal fees if she left the employer within six months; I do not know if that's acceptable in the regulations but it does not, on its face, sound totally irrational.

The long-term velvet glove of indenture. Most of my recent conversations have been with people new to the H-1B program, but at the wedding I talked with a couple of young men who had been it for several years; in both cases they were working on their second three-year stage of the H-1B visa, and their employers had successfully applied for labor certificates for them, to turn them into green card holders in the future. They can stay in this status, for all practical purposes, indefinitely.

But the future, given the wait list for employment visas for people from India, is a long way away, and during these years the workers must feel a sense of indebtedness to the company that has sought a green card for them. Yes, they could switch to another employer as an H-1B, but why leave the employer that would set them on the path to citizenship? Would the new employer also ask for a green card? How many years longer would that process take if one changed jobs?

It must create a different mood, at that time of life, different from the cheerful mood one presumably has when entering the program.

The H-1B program is many-faceted and in many ways diabolical, but we should not look for any political or moral support for program reform from the young high-tech workers entering into it.