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Negotiation Salary & Benefits with H1B sponsoring Consulting Companies

Significant number of students who graduate with a degree in US tend to go to Desi consulting companies for jobs. Fresh graduates go to them with a hope to get trained and get placed in a good company and make some decent money. There are many things to consider and one of the major things students overlook and compromise on is Salary and Benefits.  Students perception is  ” I first need a break and a job and then after I settle down, I can make good deal with Employers “. But, this is VERY MUCH not true. YOU LOSE a lot if you do not negotiate up front. Employers just use the vulnerability of students and make a LOT OF MONEY. Some of them are reasonable and some are VERY GREEDY. So, the idea is, you make a good decision first hand.  This article is part of the series : Everything from – How to find H1B sponsor to How to find H1B Jobs in Consulting

Sample Good  Pay and Benefit  deals  :
There are two concepts, once is Salary for an year and Percentage based on project.

If   “the employer applies for students’s H1B visa, trains you and supports you with lodging and boarding until you get a job ” and the employer size is big around 200 people in company. On a percentage basis, yu can ask for 70 to 30 % ratio. It means, you get 70% of the billing rate and 30 % goes to employer. This is a good deal because if you are working for a big company, the chance of having layers before client are less. So, your employer will have good billing rate. Again, you have to trust your employer and it is your call. Some are good and some are not trustworthy. Most of them are not trustworthy. There is at least 10% money just not showed to you.

Similar to above, the company trains you and takes care of you. If they do not do percentage and only Salary per annum, yu can ask to start with $75,000 per year with Full benefits of Health insurance and 401k . The deal is after one year, he gives a hike to $80,000.  There is a catch here, it depends on the technology. Sometime people in hot technologies can do better and in old technologies do not do better. So, it is relative.

If the employer is small, lets say under 50 members, You should ask for 80 – 20 percentage basis. Means you get 80% of the billing rate.  Because, it is a small company, the idea that the guy will have direct vendors or clients is very less and there are more layers, so your employer gets less money and you better get more. Also, it is not a good idea to go on salary basis for small employer as he cannot afford to do rotation of money. Again, it depends.

One golden rule, go to company with some reference. I mean to say is talk to someone who works in that company and ask them details. The guy you talk to should not be relative or any way related to company. He should not tell you some crap because be gets a bonus.

There are many factors, you have to negotiate accordingly, but on the baseline above are some common percentage and salary. It varies with experience and technology.

Overall, the point is YOU HAVE to talk to employer  in the beginning and clarify the Salary and benefits. Because, if you do not and get into a LONGTERM project, you lose money. Employers are very intelligent, they say we will give you a hike after First project and if you are lucky and get a good project that runs long, you are stuck…so, think about it.

I will do some post about consulting companies later…post a comment if you need specific help !


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  1. I don’t think you can sue them. You may land up paying the Attorney from your pocket.
    1. If you are a H1 Employee, they have to pay you minimum of the prevailing LCA wage for the location where you work. Anything above you can negotiate reasonably.
    If your rate itself is too small, the percentage they get becomes insignificant in their business, perhaps they will be happy to let you go.
    2. Change your job to where you can get more and to your expectation instead of getting frustrated on thinking about what they get?.

  2. Thank you Kumar!!!

    There is no binding kind of thing mentioned in the offer letter so i am just worried if i sign it will he force me to join him, as signing a offer does not mean i should join him, even though he is processing my H1B. Please confirm.

  3. Hi,
    If my H1B sponsor wants me to sign the offer letter mentioning just the annual CTC, and the starting date of employment is 1st of October, is it the legal binding to join them after 1st of october or even after signing if i decide not to join them , will this be fine?

    Thanks much in advance for your help!!!

  4. Hi,
    If my H1B sponsor wants me to sign the offer letter mentioning just the annual CTC, and the starting date of employment is 1st of October, is it the binding to join them after 1st of october or even after signing if i decide not to join them , will this be fine?

    Thanks much in advance for your help!!!

    • Deevyan,
      The most common thing is general employer binding and contract clauses telling you have to work for them, if not you have to pay back something…While some are not really fully enforceable, there can be some situations where company can come after you…
      Having said that, if you do not want to join them, it is your choice…Only thing is you need to be wary of the payback of something..

    • Jon, good Q, why not 100/0. Just make you get some basics, also for a few demanding unreasonable rates.
      Those Consulting companies that you are talking about are small to medium and have the following

      1. Pay almost 10-12 % (Approx.) contributing to your Social security, Medicare and a few more while running your payroll.
      2. Further from whatever income they get they pay taxes on that just like you pay income tax.
      3. What about the salaries for those company staff, office administration, rentals, Attorney fees, Payroll company fee, Company Insurance and many other overheads that company business has. Where do they get money for paying all that?
      4. Who will manage your H1 files that are most complicated with respect to maintenance of your status
      I only feel that any negotiation has to be mutual and reasonable. There has to be a certain level of Loyalty factor from both sides.

      Why not ask yourself why you want to make money?. Anil Ambani as to why he is making money?.
      The bottom line is that one has to negotiate, but it has to be reasonable, know your limits while doing so. You may be ditched by someone who may offer you 85/15 or 90/10. The company may not be able to manage with such margins.
      Your salaries may not be run on time or at the end you may not get promised bonus and whatever, they will in some way try to make up for such shortfalls.

      Just some info. Choice is yours anyways. Your life, your decision. Enjoy……………

  5. hi, good post i like it. im having a carrer start this month and the employeer is my relative , and i cant talk to him regarding percentage as of now. So usually i got my billing /hr as 65 c2cso how i need to discuss my percentage with him. And there are no layers primevendor client and my employeer. plz suggest

  6. Hi, I have got H1B in lottery in the year 2009 and i have got it stamped and traveled to US for short term assignment of 45days. Now i am looking at reaching out to prospective companies for a job offer with visa sponsorship. Am i going to be under cap exempt or should i apply a new visa. If i am going to be under cap exempt what are the rules and regulations for me to get visa using it with other company.

  7. Hi – I am working for a Desi Consulting from past 6 months. I am in 80-20 contract with them and he runs payroll for me every 15th. i.e., april salary is paid on may 15th. is this the good way of paying the salary ?and I do not have much benefits provided by the consulting company. I am new to this US recruitment process. Can somebody tell me What benefits can we ask to the consulting companies or what questions we can ask while accepting the offer. This might very much help me while accepting next offer.

  8. In the H1 offer letter if employer gives offer compensation as $60k / annum salary for the first 6 months (1000 billable hours). After 1000 billable hours (6 months) I will be compensation on 70:30 basis where company will keep net 30% of the bill rate, does taxes (EE & ER) and insurances will be part of the 70%.
    Is is this good offer, if should i take the compensation discussion further.

  9. Hi,
    I want to understand hourly billing. If a company offers 70$ per hour billing contract to me. In that case this billing is counted for only working days (22 days per month)? and if sometime work is less, you don’t have enough for a day, in that case you don’t get pay?
    Could you please explain In US generally hourly billing counts for which days

  10. Hi ….I am currently working for a company and they said they will sponsor my h1b and i have already submitted my docs for the same. However, currently due to lack of work i have been put on a forced unpaid vacation for 2 months starting feb. They said they will ask me to resume once work is back.
    Upon asking my colleagues, i found that currently work is slow and no immediate signs of increase. I am worried whether i will be called back before Visa application that is April 1. Also, what if there is no work until then will they process my visa.
    I am searching for opening elsewhere however, not many companies are up for visa sponsorship now as the application dates are approaching.
    Can you suggest what steps i could take at this stage…Should i carry on to wait for my employers call or search for a consultancy to process my visa?
    Please advice


  11. i do have 12 years of experience in finance & accounting (AP,AR & Payroll, SAP BW&BO) funtional knowledge, i would like to go and find the Job in USA, what is the procedure, which visa is applicable how to get the VISA, how to apply, is it possible?

  12. Hi,
    I am currently working for a Company A, but they are not processing my H1B visa. However if I have an H1B visa in-hand, I may get many opportunities in the same company. Recently I get to know that many US based consultancies are sponsoring H1B visa and I contacted some of them as well. But my question is, once I accepted a job offer from any consultancy and if they process and get H1B in-hand, do I have to join that consultancy? Is there any rule says that I should work for the that company who offered me H1B for some period ? I just want to accept the offer from a consultancy for processing my H1B.
    Please advice.

    • Hi Asarsh

      There is no law that says you must work for the company the processes your H1. But if you go work for another company, you should make sure they start there processing. The danger is if the first company stops the processing then you may end up with no sponsor. So whoever you decide to work with and treats out well, make sure they are sponsoring you. Let m know if this helps or if you have more questions.

  13. My employer said it’s a small company, and it is based 70% – 30 %. Is there any additional taxes paid to govt of US. Can you please give me an example.

    • 70%/30% is OK but it really depends how much the consultancy is billing.. If they charge the client $100 per hour, then that equates to $200k per year. They pay you $140k (70%) and they keep $60k (30%) for doing nothing! That is exploitation in my opinion.

      But if they charge only $40 from the client, then it is more realistic to pay you $28 per hour ($56k per year – 70%) and they keep $12 per hour ($24k per year – 30%). With small billing, they are not making a lot due to benefits, taxes, business costs..

      Finally, I don’t think the 70%/30% includes taxes. Those costs must be paid after by the employer and the employee. But to know for sure, you should ask them and have them document it in writing so there is no misunderstanding.

      Hope this helps!

      • yes, your consultancy has to pay the payroll taxes which consists of social security,medicare, FUTA (federal unemployment tax) and state unemployment tax and state disability tax depending on the state. Also federal and state withholding.

  14. Hi all,
    i got an offer from a company & complete CTC structure is given in the mail during final salary confirmation. But in the offer letter CTC is not mentioned only annual gross pay is mentioned & also all annual benefits are mentioned in the letter ( graduity, medical,super annuation..etc without value). The value seems to very less due to all deductions. the company deny to revise the offer letter with reflection of committed CTC wen i asked for but simply giving verbal communication as included in the annual benefits. Will that be a problem in future company?I have a proof of committed CTC by the company only in the mail. Will that stand for next company ?? pls. anyone advise


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