US plans higher minimum wages for H1B
The US has proposed to increase the minimum wages paid to hire an employee under the H1B visa programme by 30 per cent over the previously fixed limits, a move the administration claims will help prevent foreigners from undercutting the salaries of US nationals.
The new rule, proposed by the US Department of Labour on March 27, seeks to increase the minimum wages for four categories from the entry-level to the most-experienced, contending that the existing wage levels were fixed 20 years ago and fail to adequately protect US workers. According to the proposed rule ‘Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States’, the prevailing wage for entry-level foreign workers was $73,279 per annum, $98,987 (Level II), $121,979 (Level III) and $144,202 (Level IV).
The new rule, which is now open to public comments till May 26, seeks to increase the prevailing wages for entry-level workers to $97,746, a hike of 33.39 per cent over the old rates, $123,212 (Level II, 24.47 per cent), $147,333 (Level III, 20.79 per cent), and $175,464 (Level IV, 21.68 per cent). The prevailing wages differ from city to city. According to the Department of Labour, the current methodology allows employers to hire foreigners at wage levels significantly below those paid to similarly employed US citizens.
The proposed changes will dramatically increase the prevailing wage levels used in the H1B, H1B1, E-3, and PERM labour certification programmes. The proposed rules have received mixed responses, ranging from overwhelming support to opposition, contending that smaller companies may no longer be able to hire freshers for entry-level jobs, given the higher prevailing wages.
The window for public comments closes on May 26, following which the Department of Labour will examine the responses and notify the final rule.
The Trump administration, in its first term, had initiated changes to the prevailing wages in 2020 without prior notice or comments, and the move had to be shelved after it ran into legal challenges.
