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Overseas students may be shut out of H1B visas to become analysts in investment banks.

H1B salary restrictions may impact juniors in investment banks

Now that new H1B visas have salary restrictions attached, will Wall Street investment banks be compelled to hire U.S. citizens for analyst and associate roles?

Maybe.

The new rules which were implemented on October 8, state that H1B applicants now need to be earning a salary equivalent to the 45th percentile of their profession's salary if they're an entry-level worker.

Salary guidelines are drawn from the U.S. government's Foreign Labor Certification Data Center (FLCDC). They indicate that the median wage for a financial analyst in New York City was $107k in 2019.

Standard salaries for first year analysts at leading investment banks in New York are currently $85k, rising to $95k in boutique firms.   

In the six months to June, data from 2020's H1B Visa applications predating the salary rule show that Goldman Sachs hired over 15 analysts on salaries of $120k. JPMorgan hired 29 analysts on salaries averaging $89k over the same period. And Morgan Stanley hired 75 analysts on salaries averaging $94k.

Nonteheless, recruiters in New York City claim that salaries for junior bankers in front office jobs (eg. M&A and sales and trading) typically exceed the new H1B limits. 

"Given the compensation levels of investment professionals, the way these restrictions have been defined is not necessarily bad news," says Anthony Keizner at search firm Odyssey Search Partners.  "There may be a lot of technology firms and smaller corporates currently using the H1B system who won’t be able to participate under the new rules, potentially leaving even more spots available for the most highly paid folk, including those in finance."

Although banks do hire first year analysts on H1B visas, they don't make up a large percentage of entry-level recruits. Odyssey Search Partners tracks the U.S. investment banking analyst population. Of the 2020 college graduates going into investment banks, it found that just 10% are not U.S. citizens and that just 2% are joining on H1B visas. The remaining 8% typically work under OPT visas granted to graduates of U.S. colleges for one year, or OPT STEM extensions, which give overseas students the right to remain in the country for two years after graduation. H1B visas are inconsequential by comparison.

Changes to the system are therefore unlikely to benefit American citizens hoping to become bankers. Wall Street jobs are still just as difficult to get. 

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

Photo by Chris Li on Unsplash

 

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AUTHORSarah Butcher Global Editor
  • In
    IndianTiger.ChineseMedicine
    14 October 2020

    This is like peeing on your own shoes. Even if this order stays lot of companies are going to offshore the work to India or Ireland where labour costs are cheaper.

    Market forces determine the value of a job, not the Tom in Washington.

    Bottom line is America lost a ton of revenue in taxes which would have been paid by the people working in these jobs.

  • To
    Tomm_Bie
    13 October 2020

    "H1B applicants now need to be earning a salary equivalent to the 45th percentile of their profession's salary" says it all.

    All of these programs, their various flavors, and the exceptions to the exceptions are simply ways to ensure an unlimited supply of cheap replacement labor. We'll make up for the fake degrees and lack of skills in quantity lol

  • Eu
    Eusense
    13 October 2020

    Sarah, I guess this Visa salary restrictions will mainly affect IT sector. Won't they now outsource these jobs for even lower pay and greater profits? Only thing Trump will gain is less colored immigration which he always wanted. Do you think this will open up 500,000 high paying jobs for us as he said when signing this EO?

  • Ja
    Jason Turgeon
    13 October 2020

    Hey Sarah,
    Where did you get the median number of $81.6k in 2019? Based on my own search, in 2019, the FLCD gives a $131.69k mean salary for financial analysts in New York County NYC.

  • si
    sia
    13 October 2020

    l am newly arrived in IT industry. but I fed up with the politics and corruption of Indian IT companies.Honestly, offfshoring and H1B both may harm ordinary people of economic areas of Europe and USA.US started making min wage concept to kick
    Indian companies out of usa. if we have logic we should think that if a country like USA who is very innovative and advanced country facing shortage of skills then how to get that same skill from an undeveloped country like India. either they target cheap labour, jobs are not complicated and training program available. this is an example how richer are getting rich.

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