H-1Bs Create Jobs — for H-1Bs

Some years ago, NumbersUSA’s Roy Beck quipped, regarding H-1Bs, “Employers would rather go to India than Indiana to hire IT workers.” An article regarding a firm in the Indianapolis area, “Carmel IT Consultant Plans 246 Hires in Next 5 Years,” in today’s Indianapolis Star shows Roy’s words to be prophetic.

The text of the article notes that, although the firm is hiring,

The company is a heavy user of the federal H-1B visa program that allows U.S. employers to hire foreign tech workers. From 2011 to 2013, GyanSys filed for 86 H-1B visas, according to the website immihelp.com that tracks H-1B filings.

And H-1B visa cogniscenti will notice that that $60K figure is the legal wage floor for an employer to avoid being declared H-1B dependent. In other words, a large percentage of its workers are H-1Bs. And if you do the math on the various job counts cited, and factor in L-1 and OPT workers, it seems likely that most or all of those 246 hires will be foreign workers, not Hoosiers.

And another passage in the article is sure to spark outrage among some readers of this blog:

The Indiana Economic Development Corp. offered GyanSys up to $4.45 million in performance-based state tax credits and up to $250,000 in training grants based on the company’s job creation plans. So long as the workers pay Indiana income taxes, the company will qualify for the grants.

I’ve heard over the years that this is common, involving for example the Nielsen TV ratings company.

Note carefully, though, that H-1B dependency is misleading. Lots of non-dependent firms hire mainly foreign workers to fill engineering and programming positions, but technically don’t count as H-1B dependent because their nontech workers are in jobs for which H-1Bs normally don’t qualify — clerical staff, marketers, accountants and so on — and thus are mostly Americans. So those firms seem to be OK, when in fact they are abusing the program.

Some, such as Senator Hatch, have claimed that the heart of H-1B reform should be updating that $60K floor, perhaps indexing it to inflation. This is completely misleading; remember, even H-1B dependent employers still must adhere to the H-1B prevailing wage law, and the latter is the core problem.

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