Sen. Ted Cruz wants minimum H-1B wage of $110,000

Cruz's H-1B reform bill proposes raising wages and ending OPT

ted cruz outsourcing
Kevin Lamarque/Reuters

U.S. Sen. Ted Cruz (R-Texas), who is seeking the Republican presidential nomination, has morphed from a vocal supporter of the H-1B program to a leading critic of it. He has done so in a new H-1B reform bill designed to raise the cost of hiring temporary visa workers.

This bill, released late Thursday, sets a minimum wage of $110,000 for H-1B workers, who currently can be paid well less than half that amount in some U.S. regions under prevailing wage rules. This base salary will adjust annually for inflation.

The legislative intent is to do more "to prevent employers from using the program to replace hard-working American men and woman with cheaper foreign labor," said Cruz, in a statement. The bill is co-sponsored by U.S. Sen. Jeff Sessions (R-Ala.), the chair of the Senate immigration subcommittee.

The bill also eliminates the Optional Practical Training Program (OPT), which provides a means to work via a student visa in the U.S. for at least 12 months. It prohibits employment authorization to anyone on student visa or F-1 status (who is no longer engaged in full time study) under the OPT program or a successor program, "without an express Act of Congress authorizing such a program."

Session called the OPT program "a backdoor method for replacing American workers," in a statement.

Eliminating OPT puts this bill at odds with the administration of President Barack Obama. Administration officials are now working to finalize regulations to give science, technology, engineering and math (STEM) students the ability to work in the U.S. under their student visas from the current 29 months to 36 months.

What makes Cruz's bill, titled "The American Jobs First Act of 2015," particularly important is its timing. This proposal by a major candidate seeking his party's presidential nomination may help raise the visibility of the H-1B issue.

This bill also sets Cruz clearly apart from fellow senator and presidential rival Marco Rubio (R-Fla.). Rubio has talked about the need to end "abuses" in the H-1B visa program, but remains a co-sponsor of I-Square bill, which seeks a major visa cap increase.

With this bill, Cruz joins program critics who say the H-1B visa is being used displace U.S. workers. Sessions' involvement gives the Cruz effort credibility as a serious visa reform proposal.

"The mass layoff of American workers at Disney, Southern California Edison, and many other companies -- who were then forced to train their foreign replacements -- underscores that our political system has failed in its duty to protect our own people," said Sen. Sessions, in a statement.

Sessions took a swipe at the I-Squared bill, which he says represents industry interests, and "would further drive down wages for American workers."

Rubio has not explained what constitutes abuse in the H-1B program. Some say the replacement of U.S. workers with temporary visa workers is not an abuse, but a feature of the program that's allowed by law. Cruz joins Donald Trump, who is also seeking the Republican nomination, in campaigning on a specific H-1B reform plan.

The Cruz and Sessions bill joins two other H-1B reform bills, one from Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.), and another from Sen. Bill Nelson.

Cruz's and Sessions' bill requires an employer to commit to paying the foreign workers either what an American worker who did identical or similar work made two years prior to the recruiting effort or $110,000 -- whichever is higher.

During the debate on comprehensive immigration reform in the Senate in 2013, Cruz had sought a 500% increase in the base H-1B cap, from 65,000 to 325,000. This new bill doesn't address the visa cap, with either an increase or decrease, but neither does the bill by Grassley and Durbin.

For its part, the Nelson bill does seek a reduction in the visa cap, and an increase in wages as well. It distributes the visas to employers based on how much they are willing to pay these workers.

"This bill is a bold step to fix the very broken H-1B program," said Ron Hira, an associate professor of public policy at Howard University, of the Cruz bill. Hira has testified in Congress on the H-1B visa.

The Cruz and Session bill "eliminates the temptation for employers to replace American workers with H-1Bs. It does this by setting a realistic wage floor, one that is equivalent to the wages earned by the replaced Southern California Edison and Disney workers," said Hira.

Daniel Costa, director of immigration law and policy research at the Economic Policy Institute (EPI), said the wage rule is a "marked improvement over the status quo."

But Costa thought the wage rule "could have been slightly more artfully crafted to protect the higher-earning H-1B workers."

For instance, "a software developer in the Silicon Valley earning the average wage would earn $142,376 -- and the entry level wage is close to $100,000. So if a Silicon Valley tech firm hires an experienced software programmer at $110,00 they'd be getting a bargain," said Costa.

Costa said Cruz and Sessions "deserve a lot of credit for the subsections of the bill that would go a long way to protect foreign workers from being exploited, underpaid and in some cases victims of labor trafficking."

In particular, the bill prohibits H-1B workers from paying penalties to their employers for leaving a job before the date agreed to. It also prohibits employers from requiring an H-1B worker to pay fees for housing, vehicle use and other things.

Hira said the bill also "fills a critical void in the legislative policy discussion by closing President Obama's disastrous" OPT program, which Hira, referring to the administration's new program to extend the program, calls "a three year zero-wage guest worker visa that serves no purpose except to undercut American workers and students."

The OPT program does not include the prevailing wage requirements of the H-1B visa.

The Cruz and Session bill also provides a "layoff cool-off" period of two years, preventing an employer from bringing in an H-1B worker within two years of a strike, layoff, furlough or other involuntary employee terminations.

It includes transparency requirements, with "real-time online updating" of H-1B applications and usage.

The OPT program has been under legal attack, and the STEM extension is now under threat of being eliminated, thanks a lawsuit filed by the Washington Alliance of Technology Workers, or WashTech.

The only previous statutory authorization for aliens to work in the U.S. while on an F-1 student visa was a three-year trial program that's since expired. Since 1994, all authorizations for aliens to work on student visas have been done solely by regulation, according to a history of the OPT program provided in the WashTech lawsuit.

John Miano, the attorney representing WashTech, said, "Such an expressed ban on non-students working on student visas should not be necessary." In 1981, 'Congress expressly limited F-1 visas to academic students," said Miano.

The OPT program was originally 12 months, but in 2008 the U.S. extended it to 29 months for STEM students and recently proposed making it 36 months. WashTech challenged the extension in court, but last August a federal court said the U.S. Dept. of Homeland Security erred by not seeking comment in 2008 about the STEM extension. The U.S. has since sought comment on a new rule, and is preparing a final rule to avoid a court-ordered disruption of the OPT STEM extension.

Sessions is a co-sponsor of the Grassley and Durbin bill, and Nelson's bill as well as Cruz's. In total, the three bills give the Senate Judiciary Committee, chaired by Grassley, a menu of approaches and ideas for reforming the H-1B program.

Copyright © 2015 IDG Communications, Inc.

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