The math of bringing an employee onsite on an H1B just to depress wages does not work unless it is below the 25th percentile of wages (which is $90k).

Once you are breaking the $100k mark and want to only save costs, you are better off opening a GCC in Eastern Europe, Israel, or India, which is what most companies started doing once remote work became normalized in the early 2020s.

All this did is make a free "Thousand Talents" program for India, especially in chemical, petroleum, biopharma, and biochemical engineering - industries where the delta between US and India salaries aren't significant but the talent gap in the US is real.

There are much smarter ways to crack down on H1B abuse by consultancies - this ain't it.

Edit: can't reply, but here's why this is dumb

Assuming I am in Dallas (a fairly prominent domestic IT services hub) and hiring an H1B employee.

In Dallas, a wage around $95k base is fairly standard based on JPMC, DXC, and C1's salaries in the area.

That $95k an employee is has an additional 18% in employer required taxes and withholdings. Add to that an additional 5-10% for retirement account and insurance plans. That $95k employee became around $115k-125k.

Once salaries start breaking into the 6 figure mark, that 23-35% in overhead starts adding up very fast. On top of that visa processing before this rule costed around $15-20k in additional legal fees on the employer's side.

If I'm at the point where I'm paying a low six figure salary, I'm better off opening an office in Warsaw or Praha or Hyderabad where I can safely pay $50k-60k in base to get top 10% talent while getting a $10k-20k per head tax credit over a 3-5 year period depending on the amount I invest building a GCC because my after tax cost at that point becomes $50-60k per employee. These credits tend to require a $1M investment, and with the proposed H1B fee, this made that kind of FDI much easier to justify than it was before.

At least with the current status quo, if I was hiring an ML Engineer at MS or an SRE at Google (a large number of whom are H1Bs as well), I could justify hiring within the US, but adding an additional $100K filing fee just gives me no incentive at all to expand headcount domestically.

You don't use the stick if you also don't have the carrot.

> You are not taking into account section 174, It takes you 15 years to depreciate foreign salary vs first year

That's a rounding error now that it costs $100K to renew or apply for an H1B visa. And for larger organizations breaking the mid-8 figures in revenue mark, section 174 changes never had an impact one way or the other - it was mostly local dev shops and MSPs that faced the brunt of the section 174 onslaught.

> Honestly, even Germany is probably better bang-for-the-buck than Hyderabad

Germany needs to severely reduce employer contributions and taxes to become cost competitive against Warsaw, Praha, or Hyd for software and chip design jobs.

That said, this is a net positive for Germany's biotech, mechanical, biopharma, and other engineering industries that aren't software or chip design related.

> Praha

This is a pet peeve of mine, but there is an english name for that city and it's Prague.

There is no point in using the local spelling because it adds no clarity, is less obvious to pronounce for any reader and the locals are not really gonna thank you for doing this either. Just seems like a form of light cultural white-knighting to me.

You are not even consistent because Warsaw is not how locals spell that.

If the local market for American DBAs is $180k, then hiring H1B DBAs at $110k does depress wages.

I don't know much about the other cities you mentioned, but there's no way you could get top developers from Warsaw for $50-60k in 2025. You may be hard pressed to find them even if you 2x that. As a point of reference, a nice family apartment costs around $1M here now. Times they are a-changin.

You are not taking into account section 174, It takes you 15 years to depreciate foreign salary vs first year (post the BBB).

Hyderabad is not that cheap for the top 10%, probably closer 90-100k base.

Honestly, even Germany is probably better bang-for-the-buck than Hyderabad, but Hyderabad has the volume and the offices.

I guess all those management meetings where we brought on teams staffed by H1Bs in order to cut costs, when our only costs were wages, didn't make sense.

Funny things is the agencies/consultancies/outsource companies all solds us on it would cut costs when the only thing changed was labor. But apparently they could cut costs without cutting labor costs? How does that work?

Care to provide a google sheets outlining why it doesn’t work?

I’m sorry but I don’t follow. What bearing does the 25th percentile H1B wage have on suppressing wages in a particular role or specialty?