Proposed H-1B Visa Changes: $130k Base Pay And A Master's Degree Mandate

The U.S. President Donald Trump’s relationship with Silicon Valley is currently turbulent. He wants to overhaul the H1-B visa by proposing doubling the minimum salary of foreign workers to $130,000 to make it difficult for firms to replace American employees with foreign staff. He also wants to reduce the duration of Optional Practical Training (OPT) for foreign students who want to gain work experience, after their education here.

 The draft (yet to be signed into a law) stated, the $130,000 salary requirement applies only to employers with over 15% H-1B employees on their workforce. This is directly aimed at reducing any H-1B discrepancies. The other proposal is to raise the salary level $100,000 with a compulsory master’s degree. Most IT outsourcing companies hire from India with starting salaries around $60,000 an annum. If employers have to pay 40% percent more and get candidates with a Master’s degrees, could result in a dramatic fall in filing for new H-1B visas. Current H-1B regulations require that those granted the visa have at least a bachelor’s degree and must be paid the prevailing wage.

Who Will It Impact?

Over 236,000 foreign applicants file for H-1B every year, according to the Department of Homeland Security (DHS). The U.S. Citizenship and Immigration Services (USCIS) grants 85,000 H-1B visas (20,000 of which are reserved for master’s degree holders), based on a lottery system every year. Nearly 75 percent of H-1B visa applicants are Indians, who either work for Indian IT firms or the local operations of U.S. firms. The CEOs of Microsoft, Apple, Netflix, Uber, Airbnb and Tesla Motors said the policy was affecting their own employees working here legally and would jeopardize their competitive quest for talent. Google said the order would impact nearly 200 employees. Tech stocks were down 1% since the H-1B news.

In America, 40% of Fortune 500 companies have at least one founder who is an immigrant or the child of immigrants. These companies have created approximately $5 trillion in revenue and employed 19 million people worldwide. Well-known tech firms like Google, Apple Intel, Yahoo, and Ebay are either founded by immigrants or the children.