US proposes to hike H-1B visa salary threshold to $140,000: Here's what Indian workers need to know

US has proposed raising the salary threshold for certain H-1B workers to qualify for an exemption from added rules for H-1B-dependent employers.

Republicans have introduced legislation designed to increase a critical compensation threshold within the H-1B visa program, raising it from $60,000 to approximately $140,000. This modification could have substantial implications for organizations that depend significantly on international talent acquisition.

The new bill introduced by Republicans would raise the salary level required for some H-1B workers to qualify for an exemption from rules applying to H-1B-dependent employers. (AFP)

Republican Representative Glenn Grothman from Wisconsin has put forward the Protecting American Workers Through H-1B Modernization Act, which would modify regulations affecting H-1B-dependent employers—organizations that maintain a considerable proportion of their workforce through this visa classification.

Republican Senator Jon Husted from Ohio has introduced a similar bill in the Senate.

This proposal emerges as the Trump administration and some congressional Republicans advance efforts to reform the H-1B program through increased fees, more rigorous evaluations, and enhanced limitations on companies employing international talent.

Here's what you need to know about H-1B salary exemption

Present regulations impose supplementary obligations on H-1B-dependent employers designed to safeguard domestic workers. However, specific H-1B employees are excluded from these obligations provided they receive a minimum annual compensation of $60,000 or possess a master's degree or advanced qualification.

The proposed legislation would not mandate that all H-1B workers receive $140,000 annually. Rather, it would increase the compensation level required for workers to qualify for the exemption.

The $60,000 threshold, which has remained unchanged since 1998, would be replaced under Grothman's proposed legislation with a dynamic threshold calculated at twice the Social Security Administration's National Average Wage Index. According to Grothman's office, this adjustment would establish the new figure at approximately $140,000.

Unlike the current fixed threshold, this revised threshold would fluctuate in response to changes in average wages, as it would be directly indexed to the wage index rather than remaining static.

Why are lawmakers seeking this modification?

Grothman contends that this modification is essential because the longstanding threshold has failed to keep pace with wage growth.

"American workers should come first in their own country," the congressman said in a news release on Tuesday. "Employers should not be able to use a salary threshold established nearly three decades ago to bypass protections for qualified Americans. There is no excuse for leaving this threshold unchanged when it should have been raised years ago."

The House bill has been assigned to the House Judiciary Committee, representing an initial phase in the legislative workflow. The measure would require approval from both the House and Senate chambers, followed by presidential signature, before it could become effective.

What does this new proposal mean for Indian H-1B workers?

Indian professionals constitute a significant portion of H-1B visa holders employed in the US, with particularly strong representation in technology-related industries.

Modifications to the program's employer standards could affect how organizations approach talent acquisition and determine whether specific employees are eligible for relief from heightened compliance measures.

If this proposal be implemented, the salary-based exemption would become more restrictive, especially for employees whose compensation falls below the new threshold and who lack the advanced qualifications necessary for alternative exemption pathways.

Organizations would be required to evaluate whether heightened recruitment procedures and regulatory obligations become applicable when hiring such personnel.

The ultimate consequences would be contingent upon the employer's organizational status, the employee's compensation level and educational background, and the specific circumstances surrounding the proposed employment arrangement.

For Indian professionals exploring employment opportunities in the United States or currently employed there, the key difference lies in the fact that the suggested threshold would not mandate all H-1B workers to receive salary approaching $140,000 annually. Instead, it would modify the regulations pertaining to a particular exemption applicable to workers at organizations classified as H-1B-dependent.

Since the legislation has not yet been enacted into law, both employees and organizations should not regard the suggested compensation level as an established salary requirement at the present time.