H1B Change to salary are less of an impact than educational Qualifications for the visa

The US government announced dramatic changes to the H1B visa which is used by over 85K individuals each year to work in the US. By some estimates there are over 500K workers using the H1B visa in the US.

Now, the estimate is to cut these by a third with new rules that change how much employers pay H1B employees.

Below is the list of the top 20 H1B employers in 2020 (to date) and the average salaries they have paid H1B employees.

RankH1B Visa SponsorNumber of LCA *Average Salary
1Cognizant Technology Solutions28,526$86,456
3Tata Consultancy Services11,868$86,453
5Ernst & Young8,893$122,887
7Deloitte & Touche8,258$91,413
8Amazon.Com Services7,705$134,117
12Hcl America4,688$92,901
14Tech Mahindra (Americas)4,175$85,711
15Larsen & Toubro Infotech3,625$93,122
17Wal-Mart Associates2,277$121,993
18L&T Technology Services2,117$83,366
20Jpmorgan Chase1,796$122,750
Credit: MyVisaJobs

While the Indian outsourcing companies pay about $85K, the US multinationals pay about $115K on average.

Under the new rule, which is due to be published later this week and which will take effect immediately, H1B applicants will need to be earning a salary equivalent to the 45th percentile of their profession’s salary if they’re an entry-level worker, rising to 95th percentile for higher-skilled workers. 

In the past, the boundaries were set at the 17th and 67th percentiles respectively. 

So what will these employers have to pay?

Depending on where they are hired (city in the US) and their role, the average increase in salary to get an H1B approval for a outsourcing company goes to $115K and for a multinational to $130K.

While it is an increase, it won’t be that dramatic in terms of the pay.

The other changes are the qualifications for the H1B. As outlined by Quartz and the WSJ:

The Department of Homeland Security’s rule would narrow who qualifies for H-1B visas based on their specific education. Currently, foreigners with a college degree or the equivalent amount of experience can apply to work in what is known as a specialty occupation. Under the changes, an applicant must have a college degree in the specific field in which he or she is looking to work. A software developer, for example, wouldn’t be awarded an H-1B visa if that person has a degree in electrical engineering.

WSJ https://www.wsj.com/articles/trump-administration-announces-overhaul-of-h-1b-visa-program-11602017434

This is the major change. If you look at the filings of H1B visas at MyVisaJobs, then you will see that over 80% of the H1B visas awarded were for software developers who did not have educational background in computer science.