How to Underpay H-1B Workers

Date: Thursday, June 13, 2002 10:52 AM

*** H-1B NEWSLETTER ***

Get the Facts on H-1B at
www.ZaZona.com

We all know that companies pay H-1Bs less but they usually brush that
off
with the "prevailing salary" argument. Of course prevailing salaries are
a
farce riddled with loopholes. Companies get away with this by putting
generic titles on the LCAs like "programmer", "computer professional",
"engineer". I have LCAs from 1992 that were much more specific such as
"oracle database programmer", "digital hardware design engineer", "sap
programmer". Somewhere between 1992 and now companies figured they could
avoid lawyers by using generic titles. I don't know why they are allowed
to
get away with it now but perhaps it's because the entire LCA process is
automated.

This is a very good time to get to know who the Programmer's Guild is.
Go to
this page because the scanned LCA image is on that page. I am just
reproducing the text.

http://www.programmersguild.org/Guild/h1b/howtounderpay.htm

Next time a shill says that we only have anecdotal evidence that H-1Bs
reduce salaries tell them to choke on this page.

How to Underpay H-1B Workers

One of the canards H-1B supporters use is the claim that H-1B is

not

used to depress wages because the law requires employers to pay

the

prevailing wage. Yet, whenever the government releases salary

figures

for H-1B programmers they are significantly less then what

Americans

make. The following is a real example of how the system can

manipulated to pay H-1B workers significantly less than Americans.

Background

In 2001 Bank of America (BofA) in Charlotte, NC "outsourced" its

Human

Resources (HR) functions to a company called Exult. As part of

the

arrangement, the Bank of America employees supporting these

functions

were made Exult employees.
At the end of 2001, Exult announced it was "outsourcing" its

computer

programming work to two "H-1B bodyshops", HCL and Hexaware. Unlike

the previous "outsourcing", the existing employees were fired

and

replaced by foreign H-1B workers. The American BofA/Exult

employees

were forced to train their replacements in order to collect

severance package.

The affected employees had very specialized skills in that they

worked

with PeopleSoft and Oracle. The lowest advertise salary we found

the Charlotte for PeopleSoft programmers was $65,000 and the

highest

was $115,000. This range is consistent with the reported

salaries

($70,000-$90,000) of the BofA/Exult employees who lost their jobs.

The Method

Companies who wish to import H-1B workers are required to file a

Labor

Condition Application (LC) with the Department of Labor showing

that

they are, in fact, paying the H-1B workers according to the law.

Keep

in mind is that the law only allows the Department of Labor to

ensure

that the LCA form is filled out correctly. The Department of

Labor

does not validate the prevailing wage.

Attached below is an LCA filed by HCL for some of the

H-1B

replacements at BofA/Exult. The salary for the H-1B workers

$39,184, about half of what the people they replaced made. So how

can

HCL claim they are paying the prevailing wage?

The first step used here in the wage depression process is to call

the

H-1B workers generic "systems analysts". So instead of using the
higher-than-average wage for the specialized skills of Oracle

and

PeopleSoft, the employer uses the wage for systems analysts as

whole.

The LCA says that the employer used OES (The Bureau of

Labor

Statistics "Occupational Employment Survey") to get the

prevailing

wage. OES put the mean salary for "systems analysts" in Charlotte,

at $60,150, a figure significantly greater than what the H-1B

workers

were
paid.

The Department of Labor provides an additional service to

assist

employers to depress wages in their on-line LCA system.

There,

employers can get a prevailing wage for Level 1 ("Beginning

level

employees") workers and Level 2 ("Fully competent employees")

workers,

which in this example are $41,246 and $69,618 respectively. So now

the

employer claims the H-1B workers are "Beginning level employees"

and

uses the lower wage as the prevailing wage.
The law only requires H-1B workers to be paid within 95% of

the

prevailing wage. The employer takes 95% of $41,246 and comes up with

wage of $39,184. Thus, the company is paying the H-1B workers

about

half of what the workers they replaced made.

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