A Failed Program

The H-1B program provides work authorization for migrant workers in occupations that typically require a four-year college education, like accounting, teaching, and software development. It is the largest US temporary work visa program — also known as a guest-worker program — with nearly 600,000 workers currently in the United States. Approximately 140,000 new guest workers will receive visas for fiscal year 2023, with another 300,000 receiving renewals.

But due to a lack of interest from successive presidential administrations in enforcing basic labor protections, the H-1B program is leading to disastrous outcomes for H-1B and American workers alike.

Guest-worker programs operate outside of standard employment laws, allowing firms to employ a workforce that has few of the protections afforded to citizens and permanent residents. By their nature, all guest-worker programs, and guest workers themselves, are vulnerable to abuse — whether they are in the United States or United Arab Emirates, or for high– or low-wage occupations. To minimize abuse, every guest-worker program needs strong labor safeguards.

The labor safeguards for America’s largest guest-worker program are clearly deficient, and the safeguards that do exist are not enforced. As a result, the thirty-two-year-old H-1B program has drifted far from its purpose of filling US labor shortages with foreign workers who possess rare skills. The often disturbing outcomes have been exposed by the media (including 60 Minutes, Reveal, the New York Times, and the Los Angeles Times), during many congressional hearings, and even in presidential campaign debates.

The H-1B program’s failures are almost too many to list. Most H-1B workers are vastly underpaid, earning less than the market average for their occupation and location. Government inaction allows large-scale wage theft of H-1B workers. While some H-1B workers do possess rare skills that benefit the US economy, most who are admitted possess ordinary skills — skills that are abundantly available in the US — and end up filling entry-level jobs. H-1B workers are placed in working arrangements akin to indentured servitude. Program rules subsidize the outsourcing and offshoring of US jobs and fissure the workforce, and even incentivize firms to directly replace their US workers with H-1B workers, who can be legally underpaid.

Simply put, weak labor safeguards make it extraordinarily profitable for an employer to hire an H-1B worker instead of a US worker, not because the H-1B worker possesses skills that are hard to find in the US but because they reduce payroll costs and are virtually indentured to their employer.

The half-hearted labor safeguards are especially mismatched to today’s US employment model. Employer loyalty towards workers has been slowly but surely eroded by the financialization of corporations, whose executives are increasingly pressured to maximize shareholder value. In response to these pressures, firms have moved aggressively to lower labor costs, with little concern about serious blowback from a public and government that have become inured to such behavior. Highly profitable firms have reduced job security, shifted risk from employers to workers, cut pensions, hired contract workers rather than full-time employees, offshored both blue– and white-collar work, busted unions, and even forced workers to train their replacements. In sum, employment norms have radically transformed without much change in employment law. Much corporate behavior that is taken for granted today would have been unfathomable when the H-1B program’s core safeguards were formulated in 1990.

Instead of responding to the new employment norms by bolstering labor safeguards in H-1B, successive administrations enervated them. The rules setting minimum wage levels for H-1B workers are set absurdly low — so low that the Department of Labor estimated that keeping the rules in place leads to a transfer of $10 to $15 billion per year from H-1B workers to employers. Meanwhile, enforcement has been effectively nonexistent, and bizarre legal interpretations have made key safeguards disappear if an employer hires its H-1B worker through a staffing firm.

There’s no question: the program is broken, and vast numbers of workers will continue to suffer the consequences every year until it is fixed.

The Path to Reform

For more than fifteen years, proposals to strengthen labor safeguards have been made by senior members of Congress on both sides of the aisle to no avail.

The most recent version of the legislation, the H-1B and L-1 Visa Reform Act, was reintroduced in March, and is authored and cosponsored by some of the most progressive and conservative legislators in the Senate. On the Democratic side, these include Senators Richard Durbin (IL), Bernie Sanders (VT), Richard Blumenthal (CT), and Sherrod Brown (OH), along with Republicans Chuck Grassley (IA), Bill Hagerty (TN) and Tommy Tuberville (AL).

However, passing any law through Congress that is vigorously opposed by a well-financed business community — particularly the tech giants that benefit the most from H-1B — has become nearly impossible, especially when tens of billions are at stake and celebrity CEOs publicly advocate for the program to be expanded.

While legislative reform through a dysfunctional Congress is unlikely, fortunately it’s not the only path to fixing the H-1B program. As a presidential candidate, Biden promised he would reform work visa programs, and as president, he has authority to fundamentally fix H-1B by modernizing and enforcing labor safeguards.

The Biden administration can follow a clear path: close the loophole that incentivizes outsourcing; raise wage rates for H-1B workers so they match US standards; ensure US workers have a legitimate opportunity to apply for jobs open to H-1B workers; investigate rampant wage theft; and allocate H-1B visas by prioritizing the most highly skilled workers rather than through a random lottery.

Further, the Departments of Justice, Labor, and Homeland Security should join whistleblowers as plaintiffs in the H-1B abuse lawsuits filed under the False Claims Act. Congress can help by urging the administration to act, and recently did so: on March 17, the Congressional Progressive Caucus included reforming H-1B in its list of proposed executive actions it is urging the Biden administration to issue and implement.

The vested interests profiteering by exploiting the current H-1B program — tech companies, staffing firms, and even universities — will sue the government to overturn any new rules. But they’re worth fighting for. Because if the government cannot represent the American workers and the relatively powerless guest workers who work alongside them against powerful employers, then what use is government at all?