The most remarkable aspect of the recent Senate Oversight Hearing was the lack of any acknowledgement by the American Immigration Lawyers Association (AILA) backed American Immigration Council to even acknowledge well known abuses by Body Shops such as Wipro and Infosys. Given AILA represents business lawyers and law firms the question arises, why would Big Tech need Insourcers like Wipro Tata & Cognizant.
The answer lies in a counter-intuitive provision in the law that states the H-1B non-immigrant must be paid the higher of the two:
- the Department of Labor “prevailing wage” (minimum salary for a particular position in a specific geographic area) OR
- the actual wage paid for that position to an American worker by that employer.
Using Apple & Wipro in a hypothetical based on the above–
If Apple hires an H-1B Architect 2 directly, Apple must pay what they pay their own employees for that position as it is higher than the “prevailing wage” as declared by the Department of Labor. Here, Glassdoor reports a full compensation package of $188k/year.
But, if Apple contracts with Wipro to simple place a Wipro H-1B employee at Apple to do the job of Architect 2, Wipro will pay, according to this LCA, $78k—a difference of over $100k.
If Wipro charges Apple $100k to place the Wipro employee at Apple, Wipro will gross $22k for placing this employee with Apple and Apple will save $88k a year.
American Tech Workers Lose.