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Tech Startups Say New Pay Rules for H-1B Visas Are Unaffordable (wsj.com) 236

New rules from the Trump administration restricting skilled foreign workers are unnerving U.S. startup hubs, as founders and investors say the limitations will hamstring their ability to recruit top-tier talent to grow their businesses [Editor's note: the link may be paywalled; free syndicated source]. From a report: The changes to the H-1B visa program announced in October will make qualifying for the work visas much tougher and compel employers to pay foreign workers drastically higher wages. Those rules hit especially hard for technology startups, whose founders and rank-and-file are often immigrants and which usually pay employees a lower salary but compensate with stock options. Many salaries under the new rules start at $208,000, even for inexperienced workers. "It's already expensive, it was already a high bar, and we are making it prohibitive," Kate Mitchell, co-founder of venture-capital firm Scale, said of the H1-B program. The administration has said the rules are designed to ensure U.S. workers get priority for jobs. "For too long, foreign worker programs have been abused at the expense of American workers," a spokesperson for the Labor Department said. The new rules "will help put an end to these harms." The H1-B rules are the latest in a string of immigration restrictions dating back to the travel ban against citizens from predominantly Muslim countries that Mr. Trump issued a week after his inauguration.

The cumulative effect has left some tech startups weary of doing business here, founders say. Some founders say they are shifting hiring and growth plans away from the U.S., establishing engineering hubs in Eastern Europe and sending new recruits from American universities who would require a U.S. visa to work instead at satellite offices in Canada. Nearly a third of all venture-backed startups are founded by immigrants, according to a 2016 report from the National Bureau of Economic Research. More than half of startups valued at $1 billion or more have at least one immigrant founder, according to a 2018 paper from the National Foundation for American Policy, a nonpartisan think tank. Several of the highest-valued venture-backed companies today, including payments company Stripe and stock-trading app Robinhood, have at least one immigrant founder and collectively thousands of employees. Much of the high-tech industry has long wanted overhauls to the H-1B program so companies have an easier path to obtain visas in a competitive hiring environment. The administration says low-cost foreign workers are taking jobs from Americans.

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Tech Startups Say New Pay Rules for H-1B Visas Are Unaffordable

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  • by oldgraybeard ( 2939809 ) on Monday November 02, 2020 @05:08PM (#60677562)
    an American Bang! problem solved.
  • by magzteel ( 5013587 ) on Monday November 02, 2020 @05:09PM (#60677568)

    These are superstars, the cream of the crop. The possess superior skills that are unavailable locally.
    You have to pay top dollar for such talent.

    • by cayenne8 ( 626475 ) on Monday November 02, 2020 @05:18PM (#60677598) Homepage Journal

      These are superstars, the cream of the crop. The possess superior skills that are unavailable locally. You have to pay top dollar for such talent.

      LOL..you certainly haven't ever worked with the level of these employees I have had to suffer through....

      • by Immerman ( 2627577 ) on Monday November 02, 2020 @05:30PM (#60677678)

        Then you were working for an employer that was blatantly abusing the H1-B program to secure cheap labor and drive down salaries, rather than for its explicitly stated purpose of recruiting top talent unavailable in the US.

      • by sjames ( 1099 )

        To be fair to OP, they've always been supposed to be superstars, rare talents that can't be found domestically. That implies that they should be expected to cost $$$.

        Want a one of a kind amphibious SUV that can climb Pike's peak or cross the Atlantic? It's gonna cost more than an old Ford Pinto at Bob's very used cars.

        The fact that you've found the H1-Bs you work with to be closer to Pinto than super SUV means the H1-B program has been severely abused, just as many here have complained for years.

        • inexperienced workers should not be H1-B's.
          But they used to say we can't find an USC willing to put in 60-80 hours an week in the bay area for $70K/year so we need an H1-B

    • Re: (Score:3, Insightful)

      Normally, there is some equivalent talent in the USA. But you have to pay _more_ for it, especially in fields where US law and policy interfere with it. I'm particularly thinking of encryption, where Israel is a leader in the field and exporting talent. I'm also thinking of stem cell transplants, where US abortion law is so politically burdened that even transplantation of adult stem cells raises the specter of fetal stem cell harvesting and is hindered in funding and in the human experimentation reviews, a

    • by quonset ( 4839537 ) on Monday November 02, 2020 @05:47PM (#60677756)

      These are superstars, the cream of the crop. The possess superior skills that are unavailable locally.
      You have to pay top dollar for such talent.

      Bullshit. Only in extreme niche situations can local people, or relatively local people, not be found.

      This is the same crap we hear about executives heading international companies being paid millions in salary and bonuses only to have the company run into the ground (HP as an example) or declare bankruptcy.

      It's an excuse. That's all.

    • That’s kind of the point, if H1B’s are superstars and cream of the crop, then paying top dollar won’t be a problem. The one’s who are going to howl are the people are looking for H1B indentured servitude at below market wages. Those low bid contract shops, they’re gonna be hurting.

      • I'm sure the H1-B visa workers won't be complaining about it when they're pulling down super-sweet salaries, eh? I know I wouldn't
  • Mossing something (Score:5, Insightful)

    by Compuser ( 14899 ) on Monday November 02, 2020 @05:20PM (#60677612)

    "Many salaries under the new rules start at $208,000, even for inexperienced workers. "
    I thought H1B visas were for high end jobs where employers could not find comparable skills in the USA. What am I missing?

    • Re:Mossing something (Score:5, Informative)

      by blackomegax ( 807080 ) on Monday November 02, 2020 @05:25PM (#60677632) Journal
      That was how H1B was supposed to be.

      But the reality of it for the last decade or two has been wildly abused by h1b farms stuffed full of the most useless, street shitting, rote learning, braindeads you'd ever have the misfortune to work with. They get paid peanuts, their VISA's used to basically enslave them into working 80 hours a week or being deported, and they don't know shit about what they do.

      This recent change is just bringing back the original intent of H1B to the actual function of H1B.
    • by Entrope ( 68843 ) on Monday November 02, 2020 @05:27PM (#60677644) Homepage

      Nothing. You are missing nothing.

      The companies' claim has always been that H-1B visas are used to bring workers here who have skill sets that are simply unavailable otherwise. The reality has always been that the vast majority of H-1B visas are used to fill positions that require only bog-standard skills, but where the employer did not want to pay a bog-standard US salary.

    • by Cyberax ( 705495 )
      $208000 is _way_ too much, and the salaries can actually go even higher. Adjusting the "prevailing wage" BS is a good idea, but in some cases this administration has increased it by 5x. And it's not based on any _market_ value.
      • Re:Mossing something (Score:5, Informative)

        by silas_moeckel ( 234313 ) <silas@ds[ ]c-corp.com ['min' in gap]> on Monday November 02, 2020 @06:12PM (#60677862) Homepage

        So? They do not need to pay that for local talent. The point is to get rid of paying rock bottom prices for general meh talent that a slightly more expensive canidate can be found locally.

        • by Cyberax ( 705495 )

          So? They do not need to pay that for local talent. The point is to get rid of paying rock bottom prices for general meh talent that a slightly more expensive canidate can be found locally.

          Have you been living under a rock? There is no "slightly more expensive" local talent. Heck, there is no "really more expensive" talent as well. The overall unemployment in IT is under 2% (it was an unheard of 2.2% in May during the height of the pandemic!), way less than the normal "full employment" rate of 4%.

          • I still see plenty of available talent in the burbs to rural (maybe big cities where people no longer want to live) but if you think they can not find local talent at 200k seems reasonable to require them to pay the H1B's that vs the cut rates they have for decades.

            • by Cyberax ( 705495 )

              I still see plenty of available talent in the burbs to rural

              Then switch to HR and get rich! Companies pay $10-20k for referrals.

    • The only part your missing is where the smartest kids in India or China or other places want to come to the US for college. We want to make sure those kids can stay here. But that should be the continuation of a college visa, not an H1-B.

      • No.
        IF they have been here and obtained a needed degree, then we should offer them a green card, not an H1B. After all, they have already been here for at least 2 years and had to learn enough English/Culture to make it through college.
    • They cannot find workers with comparable skill sets in the USA. This is done through the standard practice advertising job requirements including 10 years experience in 5 year old technology and 5 years hands on with 1 year old technology and some how no Americans apply or if they do they lied on there resume. But fresh graduates of Indian colleges have been working with this stuff since before they started school and you have to believe them, or the H1B factories that say it's so.

    • You answered your own question. Do all positions where you cannot find the skills in the USA pay 200K ? I don't see why it would, especially outside of silicon valley.

      I, for one, have complained about Indian consulting companies flooding and abusing the H1B process, making it ineffective. And I'm the first to acknowledge that the Trump administration, contrary to the previous one, actually did something about it that probably had some real effects. Problem is they didn't go for the best solution, just went

    • What if the top of a given skill set, that the highest any American will get paid for, is under 200k? Meaning that no American would ever get paid 200k? What if the cream of the crop for a given position gets paid 150k, thus an H1 B would be legitimate at 175k?

      And the rules indicate it STARTS at that. Haven't we heard PLENTY of whining about how Silicon Valley salaries are off the chart nuts? And here we are demanding for H1B to be paid something NO ONE would pay outside of the valley.

      I do see it destroying

    • by pavon ( 30274 )

      According to the law the term “specialty occupation” requires

      (A) theoretical and practical application of a body of highly specialized knowledge, and
      (B) attainment of a bachelor’s or higher degree in the specific specialty

      What constitutes "highly specialized" is debatable. I think we can all agree that the low-skilled IT workers that some companies use H1B for aren't "highly specialized" workers. At the other extreme, I think "there isn't a single person in the country who could do this job" is too high of a bar.

      In the past, the H1B has often been used as a bridge between an education visa and a green card. These folks weren't always "without peer", but

    • by tiqui ( 1024021 ) on Monday November 02, 2020 @07:59PM (#60678220)

      big globalist companies, no matter if Republicans or Democrats are running the place, it's a policy aimed to help the businesses but it's sold as something else and will never live up to the billing, since it's never designed to.

      H1-B visas were never meant to be noticed by most people, and for those who asked, it was sold as a program that would import a steady stream of Werner Von Brauns, Elon Musks, Enrico Fermis, etc. High-profile, super-talented, smart people who would start new industries or boost existing ones and create a ton of new jobs for Americans. Musk is the sort that we're supposed to imagine: Starts PayPal, then SpaceX and Tesla, employs thousands of Americans with good pay and benefits while pushing technology forward. It's actual intention, however, is exactly what we all know it's doing: import thousands of cheap Indian IT folks to replace middle class IT workers at Microsoft, Disney, etc. and cheap foreign programmers to replace the Americans at Boeing...

      H1-Bs are hardly unique in this. A large part of the tax code is similarly tweaked like this, in fact the federal income tax IS one of these things: it was advertised to the public as something that would only ever affect the top 100 people in the USA, but it was actually designed to (and DID) shift the burden for the costs of the federal government away from tariffs (which hit big companies importing goods, and rich people importing luxuries) where our founders put it, and onto the average American worker (upon whom who our founders put ZERO federal income or property taxes).

      Question: What three things in US history have been most politically divisive?

      I would asset that it was:

      Slavery: businessmen using imported non-white labor which would work in appalling conditions and for no wages - The average American was not for it, and it lead to an actual shooting civil war.

      Vietnam: arguably businesses were making mountains of money on military equipment, ammunition, supplies, uniforms, etc in America's first never-ending war which the average American came to oppose as it became clear it was NOT about national security, had no planned victory, and was grinding-up the cheap labor of American lower- and middle-class kids who were drafted into service at miniscule wages while at risk of death (sort of like slaves).

      Trump: The man got elected making a loud argument to build a wall, attack H1-B visas, and end illegal immigration, all of which threatened the supply of cheap imported labor for big business. Corporate America and establishment Washington (both parties) went insane when the guy got elected, and they've been trying to undo it ever since. They told themselves he could never win, and then he won even in the face of unprecedented efforts to derail him using every lever of power available to the people in Washington DC and New York City. Not a single big media company or social media company has maintained any neutrality in this fight. None of big corporate America actually cares about stuff like social policy; they'll just use anything available to stir-up efforts to oppose anybody blocking access to cheap labor.

      Cheap labor, cheap labor, cheap labor... the never-ending demand of the typical businessman.

  • That's Excellent! (Score:5, Insightful)

    by rally2xs ( 1093023 ) on Monday November 02, 2020 @05:27PM (#60677642)

    Then maybe they'll have to start hiring Americans, and American kids will see the value of getting a software education, and then maybe they'll be "enough" Americans to fill those jobs.

    What would help would be to not tax the H out of American companies and thus "subsidize" them into having enough $$$ to pay Americans so that they don't "have" to take their SW development outside the country.

    • They might, but do realize that there just may not be any American to hire, regardless? Software engineering is defintely one of those professions where not only do you get what you pay for, you REALLY get punished for screwing up. Everyone here who's had to clean up after a substandard engineer knows this to be true, all the time you spend cleaning up may as well be lighting money on fire. How many tales have we heard of code bases so bad, you just have to scrap them entirely?

      At the end of the day, I do be

    • The better (though still kind of corporate welfare) plan would be to let them take a tax deduction of the "surplus" between a lower skilled US worker than the H1-B minimum salary *when used to provide training for that worker*.

      The real bullshit, beyond the abuse of H1-B, is the abuse of the education system as a "can I hire this person" credential mill for corporations. They started wanting a college degree for non-credentialed jobs as a way to filter out the wheat from the chaff. It didn't have anything

    • RTFS.

      "Some founders say they are shifting hiring and growth plans away from the U.S., establishing engineering hubs in Eastern Europe and sending new recruits from American universities who would require a U.S. visa to work instead at satellite offices in Canada."

  • by argStyopa ( 232550 ) on Monday November 02, 2020 @05:35PM (#60677700) Journal

    ....we might as well fucking hire AMERICANS, sheesh.

  • by arbiter1 ( 1204146 ) on Monday November 02, 2020 @05:36PM (#60677702)
    Its a program that from day 1 has been abused by big corp to keep the job here but bring workers here unlike how they used to do it by moving the job to the low wage worker. Even more diabolical in the matter they force the worker being laid off/fired to TRAIN the h-1b worker before they leave. Its pretty disgusting thing being allowed to let a big company replace american workers on american soil while making them train the person replacing them.
    • In fact, we SHOULD scrap it, but then add another 25K green cards that are targeted to what H1B did. In addition, require that these green cards can only work on internal projects OR projects for sale by that company. IOW, it can not be used to contract them out.
      Far too many worthless middle men that are simply skiming massive amounts of $ off.
  • by sdinfoserv ( 1793266 ) on Monday November 02, 2020 @05:36PM (#60677706)
    The H1B sham has been a corporate windfall to push pay lower while ownership pockets unfathomable riches. Another case of getting rich off the backs of workers. There’s plenty of US based workers – at the prevailing pay scale. Billionaires increased their wealth by $637 BILLION that’s more than ½ a TRILLION richer during covid.
    https://www.businessinsider.co... [businessinsider.com]
    Don’t even try and claim they can’t afford it, or raising wages will cost jobs, or some other neo-liberal capitalist nonsense. https://en.wikipedia.org/wiki/... [wikipedia.org]
    • I couldn't decide how to spend my mod points... +1 informative, or -1 Flamebait... the latter because it's not neo-liberal capitalists, it's neo-conservatives who believe in a "job creator" class.

  • by segin ( 883667 ) <segin2005@gmail.com> on Monday November 02, 2020 @05:37PM (#60677710) Homepage

    They're to find the best of the best outside our borders. If you want to hire cheaply, hire domestically. That's the intended purpose of H1B, and this change only brings the program back in line with its intended purpose.

    • That was the intent - along with "we can't find any citizen candidates" .. *wink* *wink* *nod* *nod*.. here's the facts - you corporate shill - H1B's make way below market for the purpose of driving down wages. https://www.epi.org/publicatio... [epi.org]
      I personally worked at a company where there were plenty of local talent, but ownership wanted to bring in H1B's because they were less than 1/2 citizen talent. I was part of the c-room discussion and was adamantly against it I left soon after.
    • The best misuse (from corporate America's point of view) is the one that most people do not notice. Consider:

      A cheaper foreign worker is imported and effectively held hostage over his/her visa. That worker (partly by being a pseudo-hostage over the visa, and partly because he/she is likely earning more than possible back home) has several important benefits to both the specific company and to the industry as a whole:

      1. He/she is more likely to be a "yes man" doing anything ordered no matter how ethical/lega

  • IMHO it should be $88k/yr. That's more than 90% of Americans make last I checked. It should be tied to percentile of US incomes.
  • He promised to do it in 2016. It is still undetermined whether it will cause wage growth or more offshoring.
  • by WindBourne ( 631190 ) on Monday November 02, 2020 @05:54PM (#60677800) Journal
    Seriously, it is LONG PAST TIME for CONgress to focus on rebuilding America's educated workforce esp. in Sciences, etc that we need.
  • Will social media companies have to cancel still more conservatives in retaliation, or will they just wait until Biden takes office?

  • Is there anyone who gains long term from a high cost of production? No. Goods and services will increase in price and become rarer .. meaning fewer people will enjoy them. How can that be good for anyone? We should find ways to reduce the cost of production as much as possible, while ensuring open competition.

  • If H1-Bs start at 200k, then they'll hire more US developers.

    If they really need an expert then that expert deserves that salary. This is not the salary for some new kid out of Mumbai, this is a salary for someone that mostly knows what they're doing.

  • For computer tech I would say the minimum should be 120K at least for hiring someone foreign. They need talented superstars right? So they should have no problem paying that. Oh you mean you only hire the foreign workers because they are cheaper than Americans?

    208K is high but I have not read the rules myself and I'm pretty sure the article is biased. I have no problem with jobs staying over seas. Companies that do that find they are ultimately training their own competition 10 years down the line. But I ha

  • Many salaries under the new rules start at $208,000, even for inexperienced workers. "It's already expensive, it was already a high bar, and we are making it prohibitive," Kate Mitchell, co-founder of venture-capital firm Scale, said of the H1-B program.

    Then stop abusing the program! Hiring an inexperienced foreign worker when there are plenty of inexperienced American workers to choose from is an abuse and SHOULD be prohibitively expensive.

    H1-B is supposed to be a way to bring in rare top-talents that can't be found domestically. Those will and should cost a good bit based on supply and demand. Rare + desired = expensive.

    • They're just gonna hire remote foreign workers. Especially during the current Covid problems. Win-win for tech and the anti-brown Trump administration.
  • The entire purpose of the H1-B visa is to allow for immigrants with unique skills in "Specialty Occupations". For years it has been used as a way to bring in people who do not have skills that cannot be found in the US market but those who are willing to work for less than the prevailing rate of pay for those skills here. This takes advantage of both the person who is being brought in as they are forced to live and work usually in an area with a high cost of living at a reduced rate and displacing a US wo
  • H1-B visas were always intended for the recruitment of overseas talent that was scarce or unavailable in the US. For years now, it has been used by tech moguls to hire educated overseas workers to fill ordinary jobs that could easily have been performed by Americans because the third-world laborers would work for much less money. Waves of American workers have been laid off and replaced by these less expensive foreign workers and we have complained bitterly about it. And now, President Trump has finally

  • How about just chuck the entire H-1B visa program? If someone is so valuable to the economy that they are needed here, they should get permanent residency (aka "Green Card") status? This way, someone fired from a job can't be deported, and people who are that valuable to the US ecosystem have options and not be subject to abuse.

    • I've been saying this all along. If we need them that badly, why bring them in as indentured servants? Give them a green card and let them compete for jobs and salaries along side Americans. Anyone who says they now can't afford to do whatever because of the revised rules is only admitting to having been breaking them before.
  • The H1-B rules make it's purpose pretty clear when they give the visa to the company doing the hiring rather than the employee being hired. That's what made the H1-B so open to abuse, the fact that once a person was hired they were basically indentured labor. Since the visa belongs to the company, if the employee accepts a higher-paying offer elsewhere they lose their visa as soon as they resign, meaning they can no longer legally work at the new job, and it takes longer to qualify for a new visa than they'

    • At the same time, why wouldn't the US want up and coming talent trying to establish themselves in the US? This administration has been falling over itself to try and encourage companies to have a greater presence here. I understand of course that the idea is that this will provide jobs to Americans, not migrants, but it can't be all or nothing. If the rule changes push aspiring startups out of the US entirely then this is surely not what any government wants for the country. I don't personally make any conc

      • The US certainly would. But think about it. Why would real talent want to shackle themselves to an H1-B visa? Even if they weren't being underpaid, any talented engineer knows they'll eventually get an offer they like better than their current job so why would they knowingly put themselves on terms where they couldn't accept it even if they wanted to? They wouldn't. And from what I've seen, the companies that use the H1-B heavily don't want to hire talented engineers. All the talented engineers I've met fro

  • If the issue is not money but talent - as you have repeatedly claimed - then PAY THEM WHAT THEY ARE WORTH.

  • "compel employers to pay foreign workers drastically higher wages. "

    H1B visas are supposed to admit skilled workers, and ONLY when no Americans are available who have suitable skills.It's NOT SUPPOSED to be a way for tech companies to import hordes of programmers and pay them low wages.

    Instead, Intel and the rest of the tech firms are hiring Indian and Chinese programmers and paying them Indian and Chinese salaries, because they can't hire American workers for Chinese wages. That's not how it's supposed to

  • by chiguy ( 522222 ) on Monday November 02, 2020 @09:08PM (#60678376) Homepage

    Every time H1-B's come up, people start bitching and moaning how the program is abused and should be changed or scrapped. Why don't you CC your reps tomorrow and let them know how you feel about it. Deepfake some letters.

    Look, if Biden wins, Kamala Harris, who is an Indian American from California will become VP. That means there will be much more abuse of the H1-B program and more Americans will be replaced with cheap Indian labor. And if you think I'm unfairly picking on Indians, Indians get 74.5% of H1-Bs, followed by Chinese 11.8%, then Canadians 1.0%. So apparently, 74.5% of global geniuses/tech craftsmen are Indian and 11.8% are Chinese. What are the odds that that's true?

    So instead of JUST complaining in a tiny corner of the Internet, write your Reps and let them know your reasoning and how passionate you are about it

    • by chiguy ( 522222 )

      To be clear, I'm still voting for Biden, because Trump is a racist dumpster fire. But I still think the H1-B program is abused by tech companies, as you can tell by the unbalanced source country numbers.

  • He earned my vote again.

  • I'm okay with that (Score:5, Interesting)

    by onyxruby ( 118189 ) <onyxruby&comcast,net> on Monday November 02, 2020 @11:50PM (#60678664)

    I've actually been on the other side of this. I have been brought in overseas for my expertise when no one in the country could do what I did a few times. I went in and did my work as someone with a skill that truly did not exist in that country. I even did some training of some locals while I was there. I then left when my work was done and went back home.

    That's exactly what the H1B was supposed to be, bringing in outside expertise when the expertise do what you needed simply does not exist. It was never supposed to be a cheaper means of getting labor. In fact checks and balances were put in try to prevent the very abuse that happened from occurring.

    Those checks and balances failed because they were rarely enforced. When they were it was cheaper to pay the fines than to stop the behavior. Companies were allowed to wholesale lay off entire departments and replace them with H1B's. I've seen countless colleagues lose out to H1B's over the years. I've even seen people who emigrated from India years ago, become citizens and then turn around and get laid off after getting replaced with H1B's.

    H1B's should include costs that make each one a company has more expensive than the last. They should also be tied to the average age of the worker (not employee) at employee. This way companies that want to only hire young and cheap workers (Silicon Valley which has had an average worker age in the 20's for decades) are the most limited in the number that they can hire. Their use should also be directly tied to the ratio of permanent workers at an employer. These simple steps would dramatically reduce discrimination against Americans by American companies as well as age discrimination.

    The H1B and similar programs need to include costs that go directly towards training for Americans that have been laid off by outsourcing. Whistleblower bounties need to be added and enforced like you see with the SEC that offer rewards for turning in abuse. Companies that are H1B dependant need to break their H1B addiction and start hiring Americans. There is, and never has been a shortage of tech workers in America.

    Put the H1B and similar programs back to their intended use and start auditing companies for the widespread fraud that has already been committed. I've seen good people come through H1B, however very few of the people I have seen come through were ever qualified to come in to begin with.

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