Article in Francisco Chronicle on Monday, April 10, 2017

H-1B workers paid top dollar Tech firms offer foreign employees salaries higher than standard wages

An H-1B visa holder from Argentina who works at CSpence Group video production company in San Francisco says the visa program has major shortcomings, like the lottery process.

When Angie Gontaruk suddenly had to go back to Argentina because she couldn't secure an H-1B visa, her boss found herself in a bind. "It was kind of devastating," said Courtney Spence, the CEO of creative film agency CSpence Group, a San Francisco firm whose clients include Hyundai. "As an employer, you know who is the best fit for an organization and who can provide the talent, and it was really frustrating not being able to fill that out."

The H-1B visa, which allows foreign workers to live and work in the U.S. for up to six years, was created more than two decades ago to help companies like Spence's hire people like Gontaruk - foreigners with specialized skills that employers say they cannot find in an American citizen.

But as federal officials began sifting through a mountain of petitions last week, the U.S. Department of Justice sent a statement with a stark warning to employers to not discriminate against U.S. workers. This warning echoed a common criticism of the coveted visas - that they are used by companies to squeeze out Americans in favor of cheaper foreign workers.

The loudest critic may be President Trump, who promised during his campaign to end the H-1B as a "cheap labor program."

An analysis by The Chronicle shows that for the most recent government fiscal year, a number of Bay Area companies offered to pay H-1B recipients amounts similar to - or, in some cases, significantly more than - the prevailing wage. That wage is calculated by the Department of Labor based on conditions such as skill level and location. The analysis relied on a sample of applications filed by six Bay Area companies that were among the top 10 H-1B visa sponsors in the region during the 12-month period that ended on Sept. 30. Many employers, including Spence, say they are not using the visa for cheap labor but as a way to hire the best person for a certain position. It was worth the extra effort and $2,000 it cost to file Gontaruk's H-1B application, Spence said, because she is trilingual and her Argentine background brought a unique perspective to the agency. "You can't group all of the (companies) in one basket and say that they are bad because they hire foreign workers," said Ann Cun, an immigration attorney at Accel Visa. Labor and wage conditions vary across the country. But experts worry that characterizing all H-1B recipients as underpaid foreign workers is dangerous for a program that Silicon Valley has come to rely on to staff many engineering positions - often at six-figure salaries.

In the period studied, a technical program manager at Google on an H-1B visa was on average offered about $33,000 more than the prevailing wage for the position in Santa Clara County. And H-1B software engineers at Facebook and Apple were offered about $20,000 more than the prevailing wage.

The salaries included in The Chronicle's analysis do not include bonuses or equity, which often account for hefty pay packages at tech companies.

Chad Graham, a San Jose immigration attorney, said many of his clients do not file for an H-1B unless they really need the specific person. "Most Silicon Valley companies are using it in the spirit that it was meant for, which is to provide the labor that they need," Graham said. "A lot of these companies are growing quickly, and they are just not able to find the staff they need to fill those positions quickly."

But, he noted, the system is not perfect: "One of the complaints is that (certain) companies try to game the system, and are driving the salary to the lowest level every time."

According to the analysis, Indian consulting firms Wipro, Infosys and Tata Consultancy Services paid Bay Area employees salaries close to the prevailing wage. The pay was also significantly lower than that offered by the large tech companies sampled. These consulting firms, which often account for the majority of H-1B applications, draw criticism for flooding the H-1B system with applications every year. Each year, all applications from for-profit companies go through a lottery process. Only 85,000 visas are given out. The lottery system, some critics say, encourages companies to play the odds. While the number of applications has nearly doubled since 2014, the number of visas granted hasn't changed. The uncertainty over the fate of the program under the Trump administration, along with a strong economy, drove a surge in applications this year, immigration attorneys said. John Miano, a fellow at the Center for Immigration Studies, a conservative think tank, said that while a "tiny fraction" of companies may pay H-1B employees higher wages, he believes firms take advantage of the program by classifying foreigners - regardless of skill level - into less senior positions so they can exploit their skills at lower wages.

The "program is just an entire mess," he said. "It is a simple thing. You shouldn't be able to replace an American with an H-1B worker under any circumstances." But on a national scale, a recent report by jobs site Glassdoor, which solicits pay data from users, shows that in most cases, H-1B employees are paid more than the average U.S. worker. Wipro and Tata did not respond to requests for comment, and Infosys declined to answer questions. While the Trump administration has not proposed an overhaul of the H-1B program yet, federal officials shifted some ground rules this month. United States Citizenship and Immigration Services, which oversees the program, said the agency will take a "more targeted approach" in choosing employers whose workers receive visas, particularly companies that have a higher ratio of H-1B employees than others. CSpence Group, where Gontaruk is the sole H-1B visa holder, is unlikely to face such scrutiny. After losing out in the lottery and returning to Argentina in 2013, Gontaruk came back to the U.S. to study business at UC Berkeley five months later. CSpence sponsored her for an H-1B again in 2015 - and Gontaruk learned she was one of the lucky 85,000 recipients. Even as someone who ultimately benefited from the program, Gontaruk says it has some major shortcomings, like the lottery process. She points out that she was educated here and sought to contribute to the country, but still struggled to get a visa. "I'm disheartened by blanket statements (that) dismiss the value of what immigrants have brought to this country," Gontaruk said.