ITServe Alliance Wins Court Ruling on H-1B Visa Prevailing Wages  

 ITServe Alliance Wins Court Ruling on H-1B Visa Prevailing Wages  

By AI Trends Staff 

In a dispute with the US Department of Labor over how much to pay H-1B visa holders, the ITServe Alliance prevailed in a Dec. 3 court ruling that had the effect of resetting the rules to what they had been before the new Trump Administration policy went into effect. 

The ITServe Alliance is an association of IT solutions and services organizations, representing over 1,400 member companies. Founded in 2010, the Alliance has 16 regional chapters in the US. The H-1B is a temporary visa category that allows employers to petition for highly educated foreign professionals to work in specialty occupations that require at least a bachelor’s degree or equivalent.  

The Department of Labor had issued a new rule on Oct. 6, resetting the prevailing wage required to hire H-1B employees, making them much higher. Before the new rule, for example, a software engineer in Los Angeles who had a prevailing wage of $85,550, would have to be paid $116,418, a 36% increase, according to an account in Forbes. This came with two days notice. 

The Department of Homeland Security at the same time issued new rules around H-1B visa renewals. This was four weeks before the US presidential election on Nov. 3. 

Immediately following the win by ITServe in court, the DOL rescinded the new rules as of Dec. 4, 2020.  

Amar Varada, President, ITServe Alliance

“Everybody won,” said ITServe Alliance President Amar Varada, in comments to AI Trends. The effect of the new rules would have been to drive the jobs offshore, where the tech talent could be hired for less. While the workers in the US would have made more money, they were uncomfortable that DHS was reviewing the terms of the visas. “They were nervous about the DHS regulations; they knew it would not be good for anyone,” Varada said. “They were stressed about whether they would have to leave the country.” 


IT Sector Has More Jobs Open than Qualified Workers to Fill Them 

IT unemployment before the onset of the pandemic was two to three percent, according to Kishore Khandavalli, advisory director for ITServe, noting that the pretense for the rule changes was to protect American jobs. “More than a million jobs are open in the IT sector,” he said. “We always have more jobs than people available to fill them.” 

With the new rules in place, the options for the service providers were to not comply or go elsewhere to hire the needed tech talent, namely from India, China, or Eastern Europe. “That’s why we had to take action,” he said, by filing for the injunction to halt the new rules from going into effect. 

Kishore Khandavalli, advisory director, ITServe Alliance

Skills in the IT sector need to be frequently renewed. “Unless you update your skills every three or four years, your skills get outdated,” Khandavalli said.


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