H1B Cap Reduction Leads to Misinformation
Posted Nov 28, 2003
At The Law Office of Sheela Murthy, P.C., we have recently received inquiries as to whether it is necessary to pay the prevailing wage to H1B workers. We have also been asked quite a number of times whether it is still necessary to pay H1B workers $60,000 per year. The answer to the first question is, "yes." Namely, an H1B employer is required to pay an H1B professional employee the prevailing wage. The answer to the second question is, "no." There has never been a legal requirement to pay any H1B employee a specific salary of $60,000. In fact, this week one of our clients informed us that he had read an article in a major Indian publication that stated that the H1B salary "floor" had been eliminated. We wish to clarify misinformation that is, apparently, quite widespread.
Payment of Prevailing Wage Required for H1B Employees
H1B employees must be paid the higher of the prevailing or the actual wage. (The prevailing wage is determined by wage surveys; the actual wage is the wage that the employer pays to employees in the same position within the company). It has never been a requirement to pay all H1B workers at least $60,000 per year. If the prevailing or actual wage for a position is less, then the lower wage is acceptable. Many positions that clearly qualify as H1Bs do not pay $60,000 per year. Some typical H1B positions that generally receive compensation below this figure include teachers, accountants, occupational therapists, medical residents, and even many professional IT positions. Recent college graduates qualify for H1Bs in many instances, but few can command a $60,000 entry-level salary in today's economy.
Never a Requirement to Pay Fixed Salary to H1B Employees
There is a $60,000 wage figure that was previously associated with a technical aspect of H1B status that has nothing to do with payment of a fixed salary to any H1B employee. Until recently, employers who were H1B dependent, meaning that they had a high proportion of H1B employees as defined by law, had to make certain attestations (sworn statements) regarding their efforts to recruit U.S. workers. The same attestations were required of certain employers found to be "willful violators" of the H1B labor requirements. An employer, however, was not required to make these attestations if they were filing an H1B petition for a worker who was considered "exempt." An exempt worker is one with wages of at least $60,000 per year or who has a master's degree or higher level of education in a specialty field related to the occupation.
The exemption and the $60,000 per year salary requirement were limited to the attestation requirement. This did not have any affect on other aspects of the H1B law.
Possible Source of the Salary Confusion
As regular MurthyDotCom and MURTHYBULLETIN readers know, there have been some significant changes in the H1B program that became effective on October 1, 2003, including reduction in the H1B cap to 65,000 and the elimination of the $1,000 training fee. See our September 19, 2003 article, Memo on Elimination of Training Fee, as well as our October 10, 2003 article, H1B Cap Much Earlier than Anticipated, both available on MurthyDotCom.
The change in the law regarding the reduction in the H1B numbers may have generated the confusion. Previously, the H1B cap was substantially increased during fiscal years (FYs) 1999 through 2003. The need for H1B-dependent employer attestations was tied to that increase. When the cap was reduced to 65,000 per FY on October 1, 2003, the attestation requirement expired. It is likely that the misunderstanding stems from confusion between the attestations exemption given to H1B-dependent employers when paying an H1B employee at least $60,000 per year, and a supposed requirement to pay all H1B workers $60,000 per year. This logic may have incorrectly been extended to assume that this imaginary requirement of payment of a fixed salary had been eliminated, along with the attestation requirements.
It is possible certain H1B-dependent employers may have paid employees a salary of $60,000 per year to avoid the attestations otherwise required of them. If that is the case, then such employers will no longer need to pay the $60,000 to avoid the attestations because, since October 1, 2003, the H1B dependency rules no longer apply.
Conclusion
It is very difficult for individuals and employers to sort out the vast amounts of information available about immigration laws. We hope that this article assists those who may have read or heard information that is not correct. We will continue in our efforts to bring accurate, reliable, and timely information on U.S. immigration law to our readers.© The Law Office of Sheela Murthy, P.C.
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