How Do H-1B Salaries Compare to ‘Average’ Technology Salaries?

At the core of the debate over the H-1B is one question: Are companies really using the visa to pay for highly specialized talent from overseas? Or are companies relying on the visa to acquire technologists for (relatively) cheap?

That question ignited debate during a recent Congressional hearing over U.S. immigration policy. Figuring out the answer is somewhat complicated, since some companies do utilize the H-1B to secure hard-to-find talent at an insane price (for example, Facebook and Google are willing to pay millions to secure a single applicant). At the same time, it’s well-established that business-services and consulting firms apply for thousands of H-1B visas, then subcontract the visa-holders to other companies.

For a bit more insight, let’s look at the average salaries for H-1B holders in certain popular technology jobs. For the data, we’re going to utilize the H-1B Salary Database, which indexes the Labor Condition Application (LCA) disclosure data from the United States Department of Labor (DOL). Then we’re going to compare those results against the average salaries in the most recent Dice Salary Report, which we generated from survey data of many thousands of technologists:

As you can see, H-1B salaries were lower than the “general” counterparts—significantly so, in many cases. But is this the result of systemic abuse of the visa? That part might be harder to determine. Not every company with a legitimate use for an H-1B worker can pay significantly above-average salaries (startups, for example, are often more resource-strapped than the tech giants). 

In the meantime, though, it’s clear that the tech-industry habit of subcontracting H-1B workers is pretty far-reaching. A DOL dataset of H-1B visa applications tabulating FY2019, for example, showed that a large number of companies relied on H-1Bs as “secondary entities” or subcontractors; some of the biggest tech companies, including IBM, Google, and Microsoft, sourced hundreds of H-1B workers from business-consulting and subcontracting agencies.

During the Trump administration, a series of updated policies resulted in an increased H-1B denial rate for consulting and business-services companies, according to analyses by the National Foundation for American Policy (NFAP). While the Biden administration has shown some interest in prioritizing visa applications based on higher wages—an idea that also bounced around the Trump administration—it’s unclear whether the H-1B will undergo any legislative adjustments in the near term. 

9 Responses to “How Do H-1B Salaries Compare to ‘Average’ Technology Salaries?”

  1. Even if companies paid the real average wage for foreigners on H-1B the visa would still be about getting employees at lower cost. Consider what employers would have to do if the visa did not exist. They would have to bid up for existing domestic talent. That would cause the average wage to go up. The higher wage would entice more Americans to acquire the needed skills. Without the H-1B any shortage in talent would be fixed by market forces the same way a shortage of office space or anything else is fixed. By keeping wages down fewer American acquire needed skills making us depend on foreigners.

    The H-1B is the quintessential “what’s good for General Motors is good for the USA” program. It helps companies at the expense of the nation.

    • Jake_Leone

      Facebook HR employees told Federal investigators that for every openly advertised STEM/IT job ad they receive hundreds of resumes. Of those hundreds, they routinely find 30 or more that are fully qualified, and that Facebook would hire, if Facebook actually had the jobs.

      When you have 30 qualified STEM/IT candidates, that you would hire for the job (if you had more than 1 job opening). You are not worried about a salary bidding war. You have a very good chance of finding someone that will work for what-ever low salary you offer them.

      You start to worry about other things. Like for example, will that employee stick with the company. Turns out, foreign workers are stuck with the company that hires them. That one thing makes them more qualified than any American.

      That is why Facebook is facing a 2600+ count lawsuit, that is going to trial, over discrimination against people of U.S. nationality, for jobs on U.S. soil.

      Turns out Big Tech, which is in a position to bid up salaries, if it wanted to. Never really has to. Because people are more than willing to trade their unstable startup job, for any job at a Big Tech company.

      The indictment is at the U.S. DOJ website. If you or anyone has any information that runs counter to what is in this indictment, bring it to the attention of the U.S. DOJ. Facebook’s only challenge to this lawsuit is on jurisdiction, and that argument was dismissed, so the case can now go to trial.

      These statements, by Facebook’s own employees, are damning. And any lie could bring down a Federal Obstruction of Justice charge, the same charge that landed Martha Steward (a billionaire) in jail.

  2. Jake_Leone

    Thank you for posting this. And here are the reasons why H-1b salaries are lower (10-25% lower) than the average:

    – Most H-1b visas are taken up by Offshore Outsourcing companies that pay the lowest possible salary (~60k).

    – The level to which LCA certifications are scrutinized (that’s where the salary is set) is dependent on the monetary requirements of the party in power. Need more campaign money, less scrutiny. Trump, high scrutiny. Biden and Obama, low scrutiny.

    – If a wage level is required to be found, it is set at the very low 17th percentile, of the level of the applicant (which somehow is always the lowest level).

    – An H-1b worker will have a hard time leaving their employer, until and unless they can get a green card, and that long wait time (10 years to forever) means they won’t be asking for raises.

    Some people and some companies pay H-1b workers, fairly well. But since most, more than half, go to Offshore Outsourcing companies, the average H-1b salary, is very low.

    The things that would raise the salary, such as raising the wage floor (from 60k to 100k). Or changing the LCA wage level from the 17th percentile to the true average or above. Or changing from a brain dead random chance lottery for H-1b visas to salary based allocation.

    Are all opposed by immigration lawyers and Offshore Outsourcing companies. And they have been funding massive legal campaigns to thwart these needed, and moral, changes.

    Even though:
    – Changing from a brain dead lottery, to a salary based allocation, would make it possible for all of Silicon Valley (especially Big Tech) to get H-1b visas for their vetted candidates.
    – Give workers here on an OPT, a chance to get an H-1b visa. Instead of the current 1-in-4 chance, the chances would go to even money after 2 years (as the Offshore Outsourcing companies drop out).
    – 500+ OPT workers have a lawsuit (opposed by immigration lawyers) to change from the idiotic lottery to something better (such as the wage based allocation or a multi-year queue).

    Immigration lawyers are working against the best interests of Big Tech in opposing these (mostly Trump changes). And they are dooming the prospects of many students here on an OPT visa from ever getting an H-1b visa.

    Look, I have no reason at all to want these changes to ever see the light of day. I benefit immensely from the fact that only freshers come in, and then on an OPT visa. Then after 4 years of frustration, they leave. And if a salary based allocation determined who received H-1b visas, I would face real competition in my job (because of domain knowledge). Instead what we have is most of the H-1b visas go to Offshore Outsourcing companies, and those Outsourcing companies are looking for well scripted jobs in accounting, DB admin, payroll, HR to remove to India. They don’t want to, and cannot really compete, with the design jobs, because that requires expensive talent (which you can find it abroad but for a higher price).

  3. So you tried to align two completely different and unmatching sources of information: an official DOL report with an online poll of your website.

    I’m laughing so hard right now that you wouldn’t imagine.

  4. Lack of ability to afford a fair market rate still breaks the laws related to h-1b use and goes against the fundamentals of the program. The numbers here vastly understate the problem, too. The h-1b program is designed to bring in the best of the best, which translates into correspondingly higher fair market rates. Instead of paying the senior software engineer $120,000, a number representing “average” (e.g. very mediocre) resources, the fair market rate rises to $150,000 to $200,000, or even higher in SF and similar. No senior software engineer truly intended for the program would ever receive a fair market salary as low as $120,000. On top of the salary, h-1b’s often work the bulk of the unpaid overtime, are frequently not allowed to take vacation, routinely receive their pay late (or not at all for the last one or two checks at a job), … Yes, the bulk and worst of the problems occur at the consulting firms. Two major actions would improve the situation substantially, but extreme corporate greed and corruption in the judicial system and highest levels of government prevent real action. 1. Switch to a pay, instead of a lottery, based system. Give the visas to the entities offering the highest pay. 2. Eliminate consulting firms completely from the visas. The majority and the worst of the issues occur with the consulting firms. They have shown themselves to be hopelessly problematic. … If someone thinks that the excuse of paying below market due to limited resources has any merit, how is that any different than a restaurant or other service business paying $3 to $4 an hour because they cannot afford minimum wage? Why even stop there?

  5. Seriously, the very high skill workers that every Democrat or Republican brag about make way less than every joe it American. They can tell us the truth, they can say : Look we need cheaper labor for our business, the cost of IT is too high, but not literally lie to us.
    The H1B is bad for the foreigners, makes them stake to the same company for next 15 years without a raise or extra-hours pay (if they request extra-hour pay they are fired and they have to move back there countries). Bad for US citizens lowering there wages. The best solution is Green Card for merit base on point system like Canada. The foreigner can leave the company and search for other job if they want. Instead 180k H1B visas per year, reduce to 20k Green Cards for merit base point system.
    Last thing, people from the outside IT don’t see that, because the average income for IT is still much higher that income of the regular joe.

    • Jake Leone

      Exactly, just say the truth we are advocating for unlimited H-1b visas, because engineers (which largely lack union assistance) are an easy constituency to throw under bus.

      It can take 6 years to earn a Masters Degree in computer science, and 100+k in college debt. A plumber, who probably didn’t even graduate high school, can earn 100+k a year. Any 2-year degree in say law enforcement can result in a 100+k/year job+pension+massive benefits.

      Get real about life in the U.S., it is expensive.

      The truth is though, companies like Facebook find 30x more qualified STEM/IT people than they can hire. And the fact about that means you have to have something really special, some really special talent, such as the ability to indenture yourself to an employer, to be competitive.

      That patently anti-capitalist tactic, which is basically the government destroying the Free Market, for the sake of giving high paying donors an indentured workforce, is a throwback to a Feudalistic era. It actually stifles innovation because most of the business innovation comes from people who can leave their employer and create a competing business.

      So much for libertarians who are whining for unlimited H-1b visas, they don’t even understand that what they are advocating for is modern-slavery.