Visa Crunch

The precise effects of new H-1B wage guidelines

The newly issued wage guidelines by the US Department of Labour (DOL) on the H-1B, H-1B1, E-3 and Green Card means a 30% raise in salaries individually in all job classifications. Though the DOL had issued a similar rule in October of 2020, it was stopped by federal courts only for the rule to be reissued by the Department of Labour by removing the procedural defects the courts pointed out earlier

Despite the rule coming into effect on March 15th, 2021 there won’t be any changes in the March 2021 H-1B lottery system if the LCA course is accomplished before July 1st, 2021 but after this date, there will be raise in the wages of about 15-20% for H-1B employees. If the new rule is not reversed as promised by Biden, it will have huge impacts on all new H-1B filings as the USCIS would choose only the higher paid workers.

The escalation in wages is planned to be done in phases of increments over 18-to-40-month intervals until July 1st, 2024 with the DOL moving the new required wages to a couple of percentiles higher than the current wages.

Level 1 or entry-level wageFrom 17th percentile to 35th
Level 2 or qualified level wageFrom 34th percentile to 53rd
Level 3 or experienced level wageFrom 50th percentile to 72nd
Level 4 or full competent wage level wageFrom 67th percentile to 90th

This translates to the requirement of US employers to pay a foreign Level 1 employee a similar or greater amount of salary paid to 35% of the US employees in contrast to the previous 17%, despite the majority of US workers of that class having more expertise than those entry-level workers. Similarly, the US employees with more expertise will be moved to the next pay grade than the entry-level worker.

With the rule from DOL being imposed, the USCIS also has come up with the latest regulations on secondary employers of the H-1B workers with the requirement of them to abide by the H-1B process that usually only the primary employers had to comply. Hopefully, Biden as promised may freeze this rule along with several others on his inaugural day similar to the federal courts reversing the rule put out in October of last year.

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