H-1B Prevailing Wage Claims vs. Reality:
What They Say, Versus What They Pay

By Robert Hill, CUNY, Murphy Institute for Worker Education

Introduction

The H-1B visa program allows U.S. employers to hire temporary, foreign "guest workers" to fill certain kinds of jobs when they can't find enough properly trained U.S. citizens. The program attempts to strike a balance between employer and employee concerns. Employers can fill the jobs and get their work done in the U.S. rather than ship the jobs overseas, and employees are protected from exploitation by a set of rules and procedures. For example, employers are required to formally declare that they have been unable to find and hire qualified U.S. citizens. Further, they must declare that they will pay these guest workers "at or above prevailing wages for the same jobs in the same work locations." Many other qualifications and protections are also applicable.

Millions of H-1B guest workers have been processed since the program started in 1990, and the government has long provided data and statistics about their job titles, "prevailing wages," and "actual wages." Research attempts have been made to compare the claimed prevailing wages to actual prevailing wages, but problems have been identified with the accuracy and relevancy of the data. For instance, an employer may have reported that they hired a H-1B "Computer Consultant" at a claimed prevailing wage of $45,000 per year, but there was no way to compare this job title to official statistics from the Bureau of Labor Statistics because the job title "Computer Consultant" does not exist. Further, the employer was allowed to claim the prevailing wage from a variety of sources, some of which were quite questionable. Neither job titles nor prevailing wage claims were standardized, so accurate analysis was difficult, if not impossible. Apples were being compared to oranges.

A recent change was made in the way that employers file their claims. The new, web-based iCert system solves many of the previously identified problems by requiring that job titles be drawn from the Standard Occupational Classification (SOC) codes used by the Department of Labor (DOL), and it also draws prevailing wage data directly from the DOL’s Occupational Employment Statistics (OES) wage estimate library. By requiring that H-1B jobs be reported using standard SOC and OES codes, it is now possible to directly compare the claimed H-1B "prevailing" and "actual" wages to those of the same U.S. citizen workers in the same locations. With the new system, it is possible to compare apples to apples.

H-1B job and wage data is reported by the Foreign Labor Certification Data Center, and fiscal year 2010 is the first year that this report contains ONLY data collected by the new iCert system.

This study isolates the claimed prevailing and actual wages that employers reported for the sub-set of computer technology worker Labor Condition Applications (LCAs), some 89,585 approved LCAs, representing 232,487 requests for workers, granted for fiscal year 2010. It groups these LCAs by the set of 10 SOC codes associated with computer technology workers, e.g. programmers, analysts, and customer support workers. It then compares the LCA wages to OES wage data for the same SOC codes, as reported for domestic workers. Results indicate that LCA wages for H-1B workers are typically much lower than those for domestic workers, but that these wages are still within the legal requirements because the prevailing wage estimates, although relatively low, are provided by the Department of Labor.

These results validate and are consistent with previously conducted research on the subject, strengthening their conclusions by using updated data collection techniques.