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The Myths And Facts Driving The H-1B Debate

The debate's not easing up. All the more reason to be armed with data to consider the topic.

The emotion around the H-1B debate is as intense as ever. The facts and concerns about the U.S. guest worker program are changing, however, as demand for foreign-born talent soars, the IT job market improves, and worries about abuse or unintended uses of the H-1B grow. Offshore outsourcers have helped reshape the debate, as a handful of the largest ones scarf up more than a quarter of all unrestricted H-1B visas for their U.S. offices. Congressional reformers are questioning how companies use these visas, and new research is providing better insight into who gets them. The comprehensive immigration reform championed by President Bush died in June, taking with it several proposals for revamping H-1B visas. But there's still a chance the H-1B program will look markedly different next April, when the government again accepts applications. Here are the myths--and facts--that will go a long way toward driving the H-1B debate.

MYTH: H-1B visa abuse is obviously rampant.

Sen. Chuck Grassley, R-Iowa, one of the main agitators for H-1B reforms this year, says the potential for widespread abuse exists but acknowledges lawmakers don't have a clear picture. "We're looking into these programs because we just don't know the extent of the abuse," he says in an e-mail. "I don't know if companies have gone too far, but it's evident that some are trying their best to find the loopholes." Stephen Yale-Loehr, a Cornell University law professor and lawyer who specializes in immigration issues, says he doesn't think there's a "huge fraud problem" with H-1Bs.

FACT: H-1B abuse is happening.

There are plenty of ways to abuse the system. One is to advertise for H-1B applicants only. Another is to seek H-1B visas for jobs that don't yet exist--as do "body shop" companies, which then hire out people, sometimes through employment agencies, for contract work.

But the most likely source of H-1B abuse pertains to the rule that employers pay the "prevailing wage" for skills in a certain geographic area. That's a standard rife with loopholes, says John Miano, founder of the Programmers Guild, which acts as an advocate for the software programming community. Depending on available data, an employer can use the median wage for all U.S. employees working in an occupation and location, the average of an employer's current workers, or the Department of Labor's skills-based prevailing wage system. Classifying workers in the lowest of those levels can mean paying them in the 15th to 20th percentile. "Between all these measures, you usually have enough leeway to take $20,000 to $30,000 off the market wage without breaking the law in any detectable manner," contends Miano. Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology who's on leave as a research associate at the Economic Policy Institute, points to the U.S. Citizenship and Immigration Service's most recent report to Congress, which shows that the median wage in 2005 for new H-1B computing professionals was $50,000. That year, InformationWeek's Salary Survey found a median staff base salary of $69,000 and total cash compensation of $71,000.

MYTH: The chance to change the H-1B law died with comprehensive immigration reform.

"There's no question that a comprehensive bill would make it easier to get our reforms passed," says Grassley, who promises to keep working for ways to end the fraud and abuse he suspects. A number of standalone bills have been introduced over the last year or so, including the SKIL bill, which aims to raise the cap to 115,000, as well as the bill by Grassley and Sen. Richard Durbin, D-Ill., that would have put many more restrictions on H-1B employers, like requiring them to post the jobs they want to fill on a government job board. Any of these bills could resurface, and new ones could be introduced.

FACT: The H-1B cap has changed repeatedly in the past decade without comprehensive reform.

The H-1B cap has seesawed. In 1998, Congress lifted it from 65,000 to 115,000. The American Competitiveness in the 21st Century Act, signed by President Clinton in late 2000, raised the cap to 195,000, then lowered it in fiscal 2003 to 65,000. Employers are pushing for a cap increase, with some of the biggest names in the tech industry, including Microsoft and Google, testifying for it before congressional committees. That public profile could keep a cap increase on the political agenda and bring reforms along with it. Newer and more radical proposed immigration changes, such as creating a merit-point system on which to award green cards, don't have much of a shot. The demand for more H-1B visas will make it harder to push aside.

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