H-1B Reform

More important: the difference between salary and non-optional expenses, i.e. the disposable income.

Oh, come on. I simply magicked figures out of thin air with zero justification! Choose any other figures if you wish; the principle remains.

What deductions are you referring to? Or does the IRS actually determine that you are paying too much /taxed/ income for rent?

I don't think it is beyond the wit of accountants to figure that out. If the taxman is getting the "right" amount of tax, then do they /really/ care how citizens spend the rest?

I was in the US for while on an L1B, that can't have been cheap since the company paid my salary, car, apartment, per diem, gas allowance and planes tickets

This is how it is supposed to be. I assume that is a reputable company.

AFAIK L-visa rules do not care much about salary because they are for intra-company exchanges of a very temprary nature. H1B can run two concurrent phases for a total of six years unless they changed the rules (and they might now).

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Regards, Joerg 

http://www.analogconsultants.com/

It is still detectable. If there is a will, and that was usually the problem.

This is not the tax man, this is about visa abuse. Therefore, it is up to the Department of Labor to engage the IRS in a field check. They will likely have to reimburse the IRS for that. However, I am sure that even the IRS agent would raise an eyebrow if the net amount reported on an H1B employee's formal income statement does not match what arrived in his bank account. Same if that bank account is controlled by a 3rd party or large amounts of money would vanish from it every pay cycle. That is a hard red flag for fraud. It is usually a sign that the involved entities are also engaged in other "creative" methods.

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Regards, Joerg 

http://www.analogconsultants.com/

Indeed, but money was at the centre of the valid visa check.

The same amount would arrive in their account.

It wouldn't need to be.

It wouldn't "vanish" per se; it would be paid out as rent/whatever.

The ability to disguise the ultimate beneficiary of payments is a very well developed art :(

Is it fraud if someone pays over the odds for something?

Fundamentally I seriously dislike the abuse of visa systems to transfer jobs abroad. If anything can reduce that, I'm in favour of it. But I don't believe a simple "salary >$x" is a sufficient disincentive.

Hence the tax authority should be engaged here. Just like other agencies sometimes work together when something needs to be looked at on another agency's turf. Which is clearly the case here.

Do you have examples where that really happened? Where things hit the fan and it made it into the media?

That would hit the fan in a root canal audit where they are looking for major money inflows and outflows. The IRS has a vested interest in people not shoveling money into some offshore account without declaring that. Therefore, a high reported income combined with paltry asset build-up and no filed form 8938 creates an immediate red flag. "What, do you rent a mansion? Where is it? Can we see it?"

If the auditors were on their toes the company owners or executives would need a very seasoned mobster defense attorney to get out of that one.

If he is forced to and this happens to scores of other people, yes. It is only a matter of time until one of them will sing or until a tax audit happens. As long as there are people investigating and that's what didn't happen in the past. Prevailing wage was a toothless rule. Until now.

It is _if_ there is enforcement. Just like with any law. If the minimum salary level is set to $130k it would be a dangerous stretch to make an H1B holder pay $10k/month rent for some small 2BR apartment in a seedy part of town.

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Regards, Joerg 

http://www.analogconsultants.com/

Yes, the cause of every problem is somnambulist civil servants. Mostly likely the cause is lack of sufficient resources allocated by Congress. Trump and Congress can pass any law they want, but if they don't pony up the money to pay for enforcement....

My cousin was one of those people. He literally trained his replacement. But he wouldn't report them. In the end after six months or so they hired him back... then laid him off again later on. Then he came back as a contractor getting paid much more. You have to work the system to your benefit.

You mean disband the company and start again as an Indian start up?

"Marketing driven" is a term that means just what you want it to mean. A company needs marketing and if the engineering department fails to negotiate the requirements and/or fails to meet those requirements, then where are they? Customers will buy what they want and if you don't give it to them, you won't be designing anything in the future.

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Rick C

You forgot to say "YMMV". We do both but some jobs just can't be done overseas.

Of course it's not. Wages aren't the only cost of doing business.

The H1Bs at my CPoE aren't paid the same as employees, sure, but they don't have the same responsibilities, either. They're basically code jockeys.

Same here, there are always exceptions. This is why I had to find a local SW-engineer for one project. Pressure testing is hard to do via Internet. It also can't be shipped out because things can go seriously kablouie.

This has nothing to do with business, it has to do with work visa. Abuse of work visa rules can be completely stopped by enforcing the prevailing wage or some other wage limit. It is simple. The new administration seems to be the first one that understands this (and some other things).

Once they have to start paying them $130k/year each they will probably find Americans for that job, and fast. There are plenty of un- or under-employed coders around.

H1B was meant to obtain special talent that could not be found in the US or where we simply don't have enough engineers, not for hiring scores of cheap programmers. Now it will (hopefully) revert to that original intent.

--
Regards, Joerg 

http://www.analogconsultants.com/

A computer can monitor this. One method: Each H1B visa holder must agree that their tax return info _and_ monthly bank account balances are automatically sent over to the DOL. There, the computer crunches the numbers. Only when the computer goes BEEEEP does anyone look into the numbers and sends out an auditor. These people can be paid from a pot filled by the penalties that abusing companies are slapped with. No need to allocate anything. Simple.

He was lucky. Others weren't so lucky. Anyhow, with the new rules that will hopefully end soon.

Some outsource whole projects offshore and it doesn't matter much whether they start something knew there or use an existing contracting house. It can work but with intricate projects it can seriously backfire. I know some examples where it did.

What I meant by that is what I saw a lot over my career: Sales and marketing folks are very much in an "instant gratification" mode, they do not think very long term. Engineers usually do. What this resulted in is that good engineering ideas withered because marketing demanded that

100% of the available manpower was spent on existing product design improvements. I know quite well how marketing folks think because I married my very first contact with a marketing department :-)

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Regards, Joerg 

http://www.analogconsultants.com/

Use abuse

There is no way we could hire the number of "short-term" people we need without the H1Bs. Regular employees are used as the architects and team leads (and to keep the corporate memory). Programming and jobs like verification are done mostly by H1Bs, under the direction of employees. It's a volitile market and the idea is to use contractors as short-term relief, keeping the employees over slumps, hopefully.

Again, it's a "non-US multi-national". They could move all the jobs out if the government made it even more difficult (which governments are really good at doing). Democrats would love more unemployed.

No, they'd just move *all* jobs overseas.

"Special" has lots of meanings. The restriction is that the job is unfillable with resident labor.

Sure, that can happen. Then we need to find out why we cannot perform these design tasks here and do something about it.

Why are they unfillable?

For certain high-skill or niche jobs it is certainly true. WRT programmers what I hear is more like the first part of this article, they are heaving trouble finding enough gigs or employment:

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Regards, Joerg 

http://www.analogconsultants.com/

Your sales resistance is obviously low. ;)

Cheers

Phil Hobbs

--
Dr Philip C D Hobbs 
Principal Consultant 
ElectroOptical Innovations LLC 
Optics, Electro-optics, Photonics, Analog Electronics 

160 North State Road #203 
Briarcliff Manor NY 10510 

hobbs at electrooptical dot net 
http://electrooptical.net

We can (do), if the government would let it alone. My job has been "off-shored" from somewhere else. Do you want to stop that, too? Getting rid of H1Bs is a good way to do it.

Because not enough people want a three or six month programming job with no chance of direct hire.

But they don't want to move for short term employment, either.

Can we hire H-1B visa holders to program the computers?

I don't recall the details, but when I dug into the H-1B thing the vast majority of visa holders worked for huge temp companies essentially and they were not doing high level engineering work. It was more like IT or similar level work. Ask a company to pay them $130k a year will simply kill the entire H-1B program.

I believe you are addressing a problem that isn't really very big.

I believe most companies have learned their lesson about that.

I don't know what companies you have worked for, but "gratification" comes from management. They make the rules and if they reward marketing for doing lousy work, that's not marketing's fault. We *all* respond to the stimulus and rewards we receive. Engineering as well.

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Rick C

Of course not. Moving design tasks to where the talent is has always been a smart idea. Same if you can obtain sufficiently good results at a lower cost. In a world economy every region has to compete against another. Competiton is a good thing. What each region should, therefore, do is level the playing field.

They would still use your design team if they can't get the results locally.

I have met lots of people who do. Also, that still beats being unable to make a good living or being stuck in some cheap apartment.

For me, having shorter term stints (until a project is complete) is fun. It provides a smorgasbord of tasks for me which are all different. Just as I want it. There are not many hardware engineers who feel that way but many programmers do.

There are more people than you think who abhor office politics and prefer freelancing just because of that.

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Regards, Joerg 

http://www.analogconsultants.com/

Sure you can. But starting this year you have to pay big bucks for that. As it should be with H1B.

It will not. H1B allows us to hire that specialist from overseas elsewhere that brings fresh ideas into a project. It allows us to hire the brightest minds to keep America at the top of high-tech. That is what H1B was designed for.

It is big to all those people like your cousin because it messes with their making a living.

H1B is a wonderful program and abolishing it like some short-sighted pundits are advocating would be flat wrong. It needs to simply be brought back to its original intent. All the protection measures are already in the law, always have been. We as a country simply need to adhere to them and that unfortunately means enforcement of rules.

[...]

Marketing is usually under the VP or Sales. Sales is traditionally driven by commissions. Hence ...

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Regards, Joerg 

http://www.analogconsultants.com/

OK, so you want to leave the *foreign* US jobs here but don't want to import *any* foreign workers to fill short-term positions, even if they're paid similarly to (unavailable) locals, for the same skills. You want to export *all* of those salaries. You want your cake and eat it too. Got it.

They were doing it at home but it makes sense to do it closer to the customer. If the job is made more difficult to do here, it won't be. That's the bottom line (for all business decisions).

But they *will* be stuck in a cheap apartment. That's the nature of short-term contract work. BTDT.

They simply don't want to move for short-term work. You don't have to because they come to you. Different kettle.

It's *NOT* freelancing. It's contract work. You're still working for an employer. Two, in fact.