Elon Musk calls for higher H-1B salaries and hefty annual program fees: A look at current wages and the cost of employing non-immigrant workers in the US – Times of India


Elon Musk calls for higher H-1B salaries and hefty annual program fees: A look at current wages and the cost of employing non-immigrant workers in the US

Just a day after Elon Musk took to X (formerly Twitter) to reflect on the H-1B visa for enabling him—and a slew of innovators who built SpaceX, Tesla, and other powerhouse companies—to come to America, the tech mogul shifted gears to voice his concerns about what he sees as a flawed system. On December 28, Musk waxed nostalgic, crediting the visa for fueling U.S. innovation but couldn’t resist his signature bombast, ending with an explosive, “Take a big step back and F*** YOURSELF in the face. I will go to war on this issue the likes of which you cannot possibly comprehend.”
Then, on December 29, building on his pointed observations, Musk rolled out his fix-it blueprint with clinical precision. His solutions are:

  • Hike the minimum salary for H-1B holders
  • Slap a hefty annual maintenance fee on the program, ensuring hiring foreign talent becomes pricier than recruiting domestically.

“Easily fixed,” he wrote, doubling down with, “I’ve been very clear that the program is broken and needs major reform.”

What is notable here is the fact that Musk, who benefited from the H-1B visa system, is now advocating for reforms to the very program that helped him establish his success.

Current Minimum Wage for H-1B Visa Holders

A critical component of H1B Visa program is the wage requirement, designed to protect both U.S. and foreign workers by ensuring fair compensation.
Prevailing Wage Determination
Employers must pay H-1B workers the higher of two wages: Prevailing wage for the specific occupation in the geographic area of employment, or the actual wage paid to similarly qualified employees. The prevailing wage reflects the average salary for a particular role in a specific location, accounting for factors like experience and education. This ensures that hiring foreign workers does not undercut local wage standards.
Wage Levels
The U.S. Department of Labor (DOL) categorizes prevailing wages into four levels, each corresponding to the complexity of duties and required experience:
Level I (Entry): For positions requiring basic understanding and performing routine tasks under supervision.
Level II (Qualified): For employees with some experience who perform moderately complex tasks.
Level III (Experienced): For roles necessitating considerable experience and judgment to perform complex tasks.
Level IV (Fully Competent): For experts leading and overseeing critical tasks and projects.
These levels help determine appropriate wages based on job requirements and worker qualifications.
Minimum Salary Threshold
While there is a general threshold for H-1B positions, such as an annual salary of $60,000, the actual prevailing wage for a specific job may be higher, depending on factors like occupation, location, and experience. Employers are required to meet the higher wage requirement to comply with H-1B regulations.
Geographic and Occupational Variations
Prevailing wages vary significantly across different regions and occupations. For instance, a software developer in San Francisco may have a higher prevailing wage compared to one in a smaller city due to cost of living differences and local market rates. Employers can obtain prevailing wage determinations through the DOL’s Foreign Labor Application Gateway (FLAG) system or other legitimate wage surveys.
Compliance and Enforcement
Employers must attest to paying the required wage when filing the Labor Condition Application (LCA) with the DOL. Non-compliance can lead to penalties, including fines and disqualification from the H-1B program. The DOL’s Wage and Hour Division enforces these provisions to ensure adherence to wage requirements.

H1B Visa: What’s the current cost for US employers?

On January 31, 2024, the U.S. Citizenship and Immigration Services (USCIS) has announced a sharp increase in government fees for visa petitions, significantly affecting employers hiring foreign talent. The fee hikes impact various visa categories, with costs for H-1B, L-1, and O-1 petitions rising substantially.
Under the new structure:

  • Employers are required to pay 70% more for H-1B petitions.
  • Fees for L-1 petitions: An increase by 201%.
  • Costs for O-1 petitions: An increase by 129%.

Additionally, USCIS has introduced a $600 Asylum Program Fee for certain petitions, including Form I-129 (Nonimmigrant Worker) and Form I-140 (Immigrant Worker). The H-1B Electronic Registration Fee will also see a dramatic increase of 2,050%.
According to an analysis by the National Foundation for American Policy (NFAP), the new fee structure could cost employers over $33,000 for filing an initial H-1B petition and its extension. Sponsoring an employee for permanent residence adds another $10,000 to $15,000 or more to the overall cost.
Here is a breakdown of the costs:

  • Filing a first-time H-1B petition: Around $9,400 (including attorney fees and premium processing).
  • Filing an H-1B extension: Approximately $18,000.
  • Additional costs for Requests for Evidence (RFEs): $2,000 to $4,500 in attorney fees.
  • Employers with over 50% of their workforce in H-1B and L-1 status must pay an extra $4,000 per petition.
  • Small employers, avoiding premium processing, may pay around $4,500 for an H-1B petition without an extension.
Cost Amount
H-1B Petition Fee $780
H-1B Registration Fee $215
Asylum Program Fee $600
Scholarship & Training Fee $1,500 ($750 for small employers)
Anti-Fraud Fee $500
50-50 Fee (for companies with >50% H-1B/L-1 employees) $4,000
Premium Processing Fee $2,805 (optional, but often necessary)
Legal Fees $1,500 to $4,000
Permanent Residence Sponsorship Fees $10,000 to $15,000+

Looking Ahead: The Impact of Musk’s Proposals

Musk’s suggestions for raising the minimum salary and introducing maintenance fees would likely have significant consequences for both employers and employees in the U.S. tech sector. On one hand, the higher salary levels could attract more highly skilled workers to the U.S., helping to maintain the country’s competitive edge in innovation. On the other hand, the rising costs might lead companies to reconsider their hiring strategies, possibly shifting their focus to domestic workers or even offshoring jobs to countries with more cost-effective labor.





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