How tech giants beat H-1B visa cap: They call 'em students

A program to bring science and tech grads to the U.S. for training has been abused by companies seeking low-cost labor

With tech companies like Facebook paying its interns more than most American workers earn and average IT salaries climbing to more than $87,000 a year, it's no surprise that the industry is looking for ways to cut labor costs. It's been obvious for some time that foreign workers coming to the United States on H-1B visas are sometimes paid less than the prevailing wage. Though often denied, this tactic has been used by tech companies to lower their labor costs. But there are only so many of those H-1B visas to go around: 85,000 each year, to be exact.

So the always-creative tech industry has quietly found a way to bypass the H-1B cap and import even cheaper labor. It's called the Optional Practical Training program (OPT). Last year, the United States approved 123,000 applications from companies to bring in students who were allowed to work here for as long as 29 months.

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That sneaky workaround was revealed in a report by the federal Government Accountability Office, which was prompted by Sen. Chuck Grassley (R-Iowa), who said the study "reveals extensive and alarming DHS [Dept. of Homeland Security, which manages visas] mismanagement of the OPT program." Talk about mismanagement -- in nearly 40 percent of the cases examined by the GAO, the government didn't even know the name of the student's employer.

As the report points out, students coming in under the OPT program are exempt from rules requiring they be paid a prevailing wage, and they don't need to get an H-1B visa to fill a tech job. In other words, they are an easy source of cheap labor that flies under the radar.

It's great to add foreign students to the mix in American universities, and it's certainly reasonable for them to gain real-world experience and training while they're here. But OPT is a fig leaf that covers the ongoing desire of the tech industry to keep the lid on the salaries of U.S. workers.

More applicants, less oversight
In 2008, the U.S. government changed the rules on student visas and allowed foreign science, technology, engineering, and math (STEM) students to work in the United States for up to 29 months without an H-1B visa. The program quickly grew in popularity, with applications multiplying from 28,500 that year to 90,900 the next. More than 560,000 OPT applications have been approved in the last six years, according to Grassley's office.

You'd think that a program that attracts so many students would be selective and some of the students would mess up and be told to leave. But that's not the case: 2.6 percent of those who applied in 2013 were rejected, and only 0.06 percent of those approved in the last six years have had their OPT revoked.

John Miano, founder of the Programmers Guild, which was among the parties that unsuccessfully challenged a 2008 expansion of the OPT in court, told our colleagues at Computerworld that the lack of H-1B-like rules "makes OPT workers much more valuable" for an employer. They can work for a long period, and they "are cheaper because the employer does not have to pay Social Security and Medicare taxes," he said.

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