Visa Crunch

H-1B visas and new wage-based rules

According to the new rule published by the Department of Homeland Security, on January 8th, 2021 in the federal register, the selection of candidates for H-1B visas has changed from the old lottery system to a new wage-based system where priority will be given to visa applications of employers whose offered wage matches the existing level in that particular area of employment.

H-1B visa

To hire employees to help the US to promote innovation in science, engineering, mathematics and technology fields at reasonable costs, the country introduced a way for achieving this through the H-1 work visa system. This visa type has several subdivisions based on qualifications and the area of employment, which are H-1B, H-2B, L1, O1 and E1 visas among which H-1B is the most sought after as it offers better wage opportunities.

Due to the low employment rates for graduates of STEM subjects which are computer science, engineering, technology and mathematics in developing countries like India, Pakistan and China and their readiness to work with low wages in the US created a mutually rewarding situation for employers as well as employees which made the H-1B work visa popular.

Based on the economic condition of the countries, several changes happened to the H-1B work visa system eligible categories of skilled workers in the US and lately, it received criticisms for allowing low-cost workers to the country by reducing opportunities for American laborers.

The old lottery system

At present, every year the US administration issues 85,000 H-1B work permits among which 65,000 are allotted to people with specialty occupations and the remaining to foreign workers who graduated from the US.

By filling out registration forms with details of the employee like the level of education and the nature of work and the wage they will be offered in the US, each employer can place applications for the H-1B visa. The US Citizenship and Immigration Services introduced a random lottery selection for eligible candidates as the numbers of applicants for H-1B visas exceeded the total of 85,000 and this system did not consider skills, wages or the need of the employer.

The new wage-based system

The newly updated system will give priority to employers whose wage offered to the employee matches the existing level in that particular area of employment when the visa applications are selected. It will also consider the skill set that will be contributed to the country by the employee and compare it with the same available among the US workers at the same cost. As it is not possible to judge the skill set of each applicant individually, salaries are the most appropriate indicators as employers choose the most deserving candidates because they will have to pay higher wages.

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