I did not know this until I saw it mentioned on X (formerly Twitter). When a company hires J1 student temporary or season employees, they do not have to pay the 7.5% FICA or Social Security tax on the wages.
If a company hires a seasonal American student, they have to pay the 7.5%. If the company hires a foreign student, they don’t. This creates a perverse incentive for private equity firms, companies or corporations to hire foreign seasonal workers. This is true, I checked it out.
[SOURCE – and IRS SOURCE – and Alternate Source]
Apparently, this is now the common approach within the hospitality industry to save money and increase profit from payrolls. Unfortunately, this approach puts young Americans at a disadvantage when seeking summer or short-term seasonal employment.
For fiscal Year 2025: The U.S. State Department processed 506,142 applications and successfully issued 451,803 J-1 visas.
Now, obviously there may be some regions or areas where there are not enough young people to fill the jobs. However, if you do the math that 7.5% employer contribution saved is a lot of incentive for the corporation to avoid hiring seasonal American workers.
One student making $20/hr x 500 hours worked (over 3 months) = $10,000 payroll. The company has to pay an additional $750 in social security if the student is American. The $750 is saved if they use a foreign J1 student worker.
If the hospitality organization hires 20 seasonal workers for 3 months, using the J1 visa process saves them $15,000 in taxes.
A private equity group, multinational owner or corporation running the business is likely to be looking at the bottom line.
Additionally, this J1 entry allows the overall immigration system to be abused if the person doesn’t leave the USA at the conclusion of their employment. How many illegal aliens are created by those who enter under a J1 visa and never leave?
Suspicious Cat is now aware, and, well, increasingly suspicious:
Another entry mechanism that is no doubt being severely abused and that We the People end up paying for. Ugh.
Thank you Sundance for shining a light on this!
Yes the information is so insightful. What is Trump’s policy on this.
Its like ancor baby motel mania.
They should pay double for foreigners.
And the USA government should have a limited maximum threshold for the number of these VISAs…bill
NO FOREIGNERS SHOULD BE HIRED. Every program has been abused stop all the programs like this. No foreign labor to pick anything. It must be all Americans.
What is the difference between a proscribed Terrorist Organization and the US Chamber of Commerce?
A: Terrorists are deceived.
Alas, eliminating this loophole would also diminish the narrative that Social Securty is going bankrupt.
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and yes the question as well. I would say no. And prob no state income tax or state income tax filing requirement either. Just poor foreign students./s. Stop the Chamber of Commerce.
our government fkn Americans every way they can
That’s a big financial incentive to hire aliens. And it blows up the SSA model of pay as you go.
See? If we didn’t have borders this wouldn’t even be an issue!
[sarcasm/off]
Legal immigration is a bigger problem than illegal immigration.
Sadly, uniparty republicans are 100% onboard with screwing American citizens. Aside from Trump and a severe minority of republicans in Congress, the uniparty in power will never protect American citizens.
Sure, sure, e-verify, employers are on the line.
And this is why we have had to learn a very slow, painful lesson that it is up to individual Americans to protect themselves, as it should be, and unite with like-minded Americans to defend themselves from those who seek to undermine freedom and liberty. Freedom and liberty are not political causes, they are individual causes. Because I exist, I am exercising my natural right to freedom and liberty. My freedom and liberty do not exist for a political cause(s) or to form or sustain a government or candidate. This view inverts reality.
It is also my understanding that this is true for OPT (Optional Practical Training) Program. Another means to avoid SS tax and yet hire for up to 4 years.
The government is our enemy.
Indefensible. The 7.5% employer portion should still be collected (while SS exists, irrespective of the fact that it should not IMO) and then be deposited into the SS trust fund generally (pretending that it still actually exists, notwithstanding that our corrupt and incompetent DC politicians and appointees have already spent it all on non-SS things).
Fed Gov should not be picking winners and losers, and certainly not picking non-citizens to be winners over the native citizenry (as losers). Totally unconstitutional by any standard (without consideration as to what our less than credible SCOTUS opines).
DC is full of crooks who are bleeding the citizens and the republic dry.
I’m pretty sure anything left in SS at the end of the year is used to pay down the deficit. That may have changed, but I doubt it.
Ha ha ha, since the Johnson-eta, it’s all part of the general fund. Makes one wonder how they do the math to say it’s going broke. Given the state of statism, the Soylent Green Day’s are soon upon us… to eliminate the payment of those earned stipends, squandered by the big ponzi drivers.
How about the foreign worker and the employer of the foreign worker EACH pay 25% into Social Security. This will be the tale of the tape as to whether foreign workers are more competent or simply cheaper.
Does anybody know if Trump is aware of this?
Paging SEC Bessent!!!
I would think so, considering he’s been so involved in the “hospitality” industry.
Yep, maybe via Dana White of Las Vegas who recently introduced POTUS’ appearance and citing ‘no tax on tips’. Hope another EO.
The ski Industry abuses this loophole to the detriment of the locals out here in the north east. There are ample young locals to work the slopes and to get a season pass as a perk.
Rampant practice in Colorado as well, both winter and summer.
Same on mackinaw island, in michigan, at the hotels (summer tourism).
You’re not kidding when you say we’re in an abusive relationship with our government.
Any which way to screw American workers.
I bet this applies to internships, as the “off-campus” option. Two of my nephews had great difficulty getting a spot this summer, and they are both exceptional young men, fully bilingual and more.
You can see it would mess up the on campus hiring too.
Another reason why SS is going broke… they use SS $$$ for whatever they want…. then refuse to replace it!!
The solution is to simply abolish the IRS. Problem solved. It’s long overdue anyway.
US natural born citizen.
I worked through grad school as a research assistant funded through NSF grants.
Neither I, nor my employer (the University) paid those payroll taxes. Wasn’t an option I could choose.
Those seven years always stand out whenever I get a Social Security statement. But I eventually worked enough quarters even with the hole in payments.
Definitely adds weight to my argument that all foreign workers, even these should be eliminated and American youth or even older people could fill the empty. Argument can’t get help. Is it can’t or ‘don’t want too’. Easy to fly a bunch of youths from a foreign country than bus some from one part of the country to the other. Fingers point but are your fingers clean?
Wasn’t referring to Sundance. Your is a general term.
This could easily be remedied through appropriate legislation. But don’t hold your breath.
“This could easily be remedied through appropriate legislation.”
It was legislation that created this mess. Don’t expect the means that created a problem to be the means to fix that problem if the problem was created deliberately.
Oddly enough, this is something I knew.
All those little.highways and byways which deliberately undercut American citizens…
I see the nefarious, globalist hand of the US Chamber of Commerce and its lobbyists on the wheel, fists full of ready cash, stuffing their filthy lucre into the pockets of anti American Congressional grifters and parasites, doing the dirty work.
I remember feeling infuriated when I read it a while back.
Even more so now.
Many foreign “work exchange” workers then go on a tour of the US, often big cities, at the end of the season.
Easy to then not be going home at the end of the Visa
Normal mom and pop’s businesses would have no reason to know this.
What a rip-off to good ‘ole American businesses.
This explains why the drive thru at an international fast food company always has ehat looks to be foreigners working.
How long has this been going on?
The H1-B bulls5it has to stop.
The chyneeze student /spy open door has to stop.
Honestly, if a company is hiring a foreign student, they should be paying at least 15% and maybe even 25% to Social Security. If employers insist on hiring foreigners over citizens, then those employers should be contributing more substantially to the Social Security fund, especially since it has been abandoned by Congress at the expense of American workers.
Oh my ! That’s awful. No wonder kids can’t get hired.
When my son was a teen he had a hard time getting hired for after school or summer work and I couldn’t understand it because we live in a tourist area with many hotels and resorts and restaurants.
My kids too. They also don’t provide the benefit packages to kids under 26 (‘sign the waiver’), so that also saves the businesses money.
Between that and DEI, hiring and promotions for young male conservatives in my blue area is really frustrating.
When we are at the SC beaches, the seasonal workers are from eastern Europe. This helps to explain why.
And by the way; any child born to these temp. workers is a US citizen.
This is wrong and illustrates why normal US kids have challenges getting summer or temp. employment.
I would dare bet most taxes are not paid and it wouldn’t be a surprise that somehow the State and Federal Government gives incentives just like Tax credits via The IRS (Theirs) that illegal invaders receive.
One of the largest employers of illegals is Tyson Foods and many Huge companies employ hundreds of thousands if not millions like building contractors and States and trucking companies.
There is always a $$$ benefit or tax reduction for hiring Non Americans.
More examples of an out of touch government where corruption has entered a terminal phase for our Republic.
This is actually evil. Wall Drug has about one hundred of them living in their dorms from May to Oct.
I would guess the savings pays for the unlimited amount of Wall Drug signs
Thank you for shining the light. I had no idea. I do know there are a lot of young people who need jobs and can’t get them.
One student making $20/hr x 500 hours worked (over 3 months) = $10,000 payroll. The company has to pay an additional $750 in social security if the student is American. The $750 is saved if they use a foreign J1 student worker.
Call it a Tariff or tax or fine but employers that hire J1 workers should have to pay that $750 to the SS to compensate American taxpayers. If any worker wants to get or renew a J1 they should also have to pay a yearly fee that helps equalize the wages.
In America many low level crimes are resolved by fines and probation. If border crossing is the only crime someone has committed, is it possible to get them documented by them paying a fine, and continued fines by them and the employer, until they go back across the border and do it legally? Also, no 4 year visas without the equalizing fees and renewing each year by paying the fees or fines.
A disincentive cost that causes any immigrant or their employer to weigh the consequences of cheapness is needed. That cost or fine or fee has to be high enough that travel back across the border is long term financially better and also high enough that employers would think twice about cheap labor. Mass self deportation.
citizens united
Somehow we need to get rid of the omnibus spending bill practice and get back to individual spending bills.
The omnibus, dating back to the 1980’s, has become the way Congress sneaks in all these loopholes, (and pet projects and subsidies) for the industries that bribe them.
Great article Sundance. Here’s the fundamental truth. As a father of a fine young 19 year old. Our duty as elders, whether a 10 yr old to a 5 yr old, teenager to a tweener, from older sister to little brother and parents to children. We owe it to assist and guide the youngsters. It demonstrates to children that these older individuals care about them, we protect them, we guide them and we let them know that they’re a priority. But over decades kids grow up now in an environment where parents don’t care as much and now they’re growing up realizing that their government and the businesses that they’ll rely on don’t care either. It’s a recipe for disaster.
Trump! Trump! Trump!
I hope Stephan Miller catches wind of this.
🤜✝️🤛
Disney hires them by the thousands.
Likewise Cedar Point in Ohio
was unaware.
I travel A LOT. Hotels mostly, sometimes B&B’s, sometimes long term rentals.
almost without hesitation I have always tipped the hospitality staff (almost always foreign nationals). I did so because I realize just how low their wages are and because frankly, when asked they do a bang up job keeping the house clean and go above and beyond the usual housekeeping. a little tip and I know they are going to really do a good job. I’m not a germophobe or neat freak, but yes I am aware I am staying in the same bed, bath, kitchen and sink that who knows what stayed the time before. If its’ not being cleaned really well, I just don’t stay.
but …when I read this, I’m having second thoughts tipping at all to anyone who doesn’t look like they are an actual citizen.
God Bless America
I should have made this more clear, when we were talking about illegal alien agriculture workers. Small farmers, who have year around farm employees pay into Social Security for them. Large corporate farms, which employ temporary, seasonal crews for spring crunch and fall harvest, do not pay into Social Security for them, nor do they pay unemployment insurance. It is part of the subsidy granted to monoculture operations in Big Ag.
Just back from the awesome Badlands and Black Hills of South Dakota. Of course had to get a donut in Wall. All the kids working were Asian. Was there about 10 yrs ago, also foreign but mostly from Western countries. Very polite though.
Our government is so screwed up.
And Trump doesn’t know this? He should know. So what is he going to do to stop it?
What a loophole for companies.
Urnist T Bass could get his attention but would he listen etc.😂
If Trump tried to curtail it, Judge Biasbutt et al would TRO it in a nanosecond. Then it would need to be CONcrap would need to pass something and how close to 0% would that be in succeeding?
The description in the post about the foreign student exemption says that on-campus employment is included. That means American universities must also be giving foreign students preference over American students for on-campus jobs to help pay their way through school. So American students have to rack up more debt to get through college, while at the same time having to compete against those foreigners just to get into the best programs in our own universities! That is obscene.
As SD has said about H1B visas – all of these employment visas – H1B, J1, all of them – need to be eliminated.
To make up for past abuses, perhaps going forward employers should be forced to pay double. This should then give a disincentive for bringing in foreigners.
I wonder how closely on campus or “approved” off campus work is monitored. Or is basically anything off campus approved?
Why do U.S. politicians sell out U.S. citizens for campaign funding? Their record of campaign donations tell the story.
Following the Supreme Court’s Citizens United v. FEC (2010) decision, campaign funding has concentrated heavily into corporate and ultra-wealthy channels. As of 2026:
1. Super PACs & Outside Groups: 65%–75%
2. 501(c)(4) “Dark Money” Nonprofits: 15%–20%
3. Direct Candidate Contributions (up to $3,300 limit): < 5%
4. Candidate Self-Financing: < 5%
(Source: Synthesized from campaign finance analyses by OpenSecrets, the Brennan Center for Justice, and the Campaign Legal Center.)
Do you understand yet?
My kids would not have attended college in the USA if they were not allowed to get part time work.
I dont have a problem with this.
No wonder everyone that answers a business phone either sounds foreign or is a bot.
Hard to understand most of them.