ATL Bear said:
It's a myth that H1-B visa holders are cheaper than domestic hires. You can't offer below the prevailing wage in a region for a similar position. If cost savings were the driver they'd leave them in their country of origin where the labor delta is significant.
ChatGPT fwiw
It depends on how the employer is structuring the hire, but often H1B visa workers can be cheaper for companies than hiring U.S. engineers, even though the law requires they be paid at or above a "prevailing wage."
Here's why:
1. Prevailing Wage vs. Market Pay
The H1B program requires employers to pay at least the Department of Labor's "prevailing wage" for the job in that area.
However, these prevailing wages are often set lower than what top U.S. engineers might command, especially in tech hubs like Silicon Valley.
Many companies legally classify roles at lower "levels" (entry or mid-level) to use the lower wage tiers.
2. Market Dynamics
U.S. citizens and permanent residents can negotiate freely and switch jobs easily.
H1B workers are tied to their sponsoring employer; changing jobs is possible but cumbersome (requires transferring the visa), so they have less bargaining power.
This can mean lower raises, fewer competing offers, and reduced leveragesaving companies money over time.
3. Additional Company Advantages
Some companies view H1B workers as more stable because the visa process discourages quick job hopping.
Outsourcing firms (like Infosys, Tata, etc.) often bring in H1B workers at bulk rates significantly below typical Silicon Valley salaries, using the visa to fill roles for far less.
4. Costs to Employer
Sponsoring an H1B costs several thousand dollars in legal and filing fees, but this is small compared to the savings on salary.
Green card sponsorship (if offered) can also tie the worker to the company longer, reducing turnover costs.
So, are they cheaper overall?
In many cases, yesespecially for companies using the H1B system strategically (outsourcing firms, large tech companies filling lowerlevel slots).
For senior or specialized roles where wages are already high, the savings are less obvious, but the retention leverage still makes H1B hires attractive financially.
