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:
wow….now it makes sense. I always wondered why the help up in Lake Placid was mostly foreign kids.
The crown and parliament were pikers compared to these people.
Shocked. Yet again we learn that no one in the government has a grasp on the visa situation (or what I call the visa problem). I hope Sec Rubio is reading SD.
My reading is the laborer pays no SS & Medicare. Doesn’t say the employer doesn’t pay their share.
W-2 Employees: You pay 6.2% which is automatically withheld from your paycheck. Your employer matches this by paying the remaining 6.2%.
Self-Employed Individuals: You must pay the entire 12.4% yourself through the self-employment tax. However, you can write off half of this amount on your federal income tax return.
How close to 100% is it these foreign workers are “self employed” probably paid in cash.
I would imagine a close scrutiny of the books of many places like ski resorts, etc. have practically no employees on the books yet run surprisingly well.
Some places may even write off/eat the cost of some of the employees instead of paying the taxes. There are only so many repairs to ski lifts, stocking the resort kitchens, buying foodstuffs, basic depreciable things like tables, chairs, room furnishings, etc that can be claimed without red flags.
Are they also exempted from income tax and state taxes?
Thank you Jeff Bezos, UBER & Bill Gates. Billionaires who got more money than god ….and still treat humanity like chit.
It ain’t just the hospitality industry….HELLCARE also uses these “student” J1s…..I take several calls at work (HR) about these ungrateful shitheads bitching about the taxes taken out of their paychecks and I am lectured about how they are tax exempt…🤮
And the J1 can be extended up to an additional 9 months.. Then we have the 4 year F1 student visa with its 36 month OTP with no taxes.. Bam… you have now established residency.. The participants, both student and employer, have paid no taxes.. Heaven forbid they get married and start families, all anchors with a US birth certificate and SNAP qualification.. To top it off these same students compete against the US citizen collage graduates for the same STEM jobs.. Further insult is the Optional Training Placement (OTP) is not available to the citizen graduates… Thanks Obama what a fine upstanding citizen you are
A year ago I met a friend at his work site at the end of the day to go out for beers. He was finishing a few phone calls so I waited. He worked in the international applications department at a university. While I waited he had a phone interview with one applicant in a foreign country and after he hung up the call he mentioned that he could tell by the questions the guy asked that he was going to use the student visa to come to America but he would never go to any classes. Once here he would just disappear into America. A common thing.
Sundance opens the curtains letting the sunlight in.
Suspicious cat sitting on the window sill waiting for them to open
Like I said, if the Trump administration provided tax incentives, payroll incentives and targeted subsidies to make it more cost effective for employers to hire verified American citizens than cheap foreign labor, two things would happen overnight::
1: a great percentage of American citizens would magically! appear and become available to fill the jobs that “Americans won’t do”;
2. The businesses would be all over having a reliable method of validating citizenship.
The gazillions saved on welfare, schools, Healthcare and law enforcement would easily pay for the increase in living wages for citizens.
Oh, I forgot to add that The Big Pot of Money, that our esteemed Congressmen grift from, would shift away from providing businesses with cheap foreign labor to their grifting off programs helping American citizens.
Progress!
… forgot to add that during the JoeBama Auto-pen regime that Congress allowed the Auto-pen to be used to AUTHORIZE IMMIGRANTS access to Social Security SSI and Social Security Disability.
That means Social Security suffers a double hit thanks to immigrants: i.e. employers not contributing for their J1 Work Visa Employees punishing US Workers and the Social Security fund being raided by immigrants claiming SSI and Disability Benefits … with ZERO dollars being contributed.
To the best of my knowledge … immigrants are still eligible to draw SSI and SS Disability.
When we were on vacation to Yellow Stone Park allot of the young girls (18-22) working there were either Australian or from Eastern Europe. This was also true at Zion and the other US National Parks were visited. So, the US Government does it’s share of hiring these types of employees as well. Some were also Students at US Universities doing INTERNSHIPS related to their degrees.
“Now, obviously there may be some regions or areas where there are not enough young people to fill the jobs…”
Then hire OLDER candidates
Stop making excuses for the outsourcing of American jobs to foreigners
Start requiring employers to hire citizens.
WOW ! I have a lot to say. I have a front row seat to this and have been quizzing the DD, Cat Lady, hetero, middle Kettle, who works in management at a much beloved swanky CC Inn. Notorious wedding destination and the such.
The place is generously employed with J 1’s from Jamaica. Lovely hard working people who NEVER want to be confused with any of the other PoC. From what I understand, the J 1 program is 3 years in length if you are accepted and not seasonal, they work seasonally during which they cannot go home back and forth on airplanes. This has been conveyed directly to DD from them. They save all their money and send it to family members at home, especially for health care on the island. They come from a culture that treasures their elder family members.
Yes, the world wide company they work for sends them to other destinations following the vacation seasons of their holdings worldwide. LARK but Ma could be wrong if that’s the parent corporation.
It’s quiet the well oiled machine. Half the island must be on CC in the hospitality and food service agenciess. After the Jamaicans leave, it’s the Filopinos or Asians or Slovakians, you get my drift.
The same was going on in North Conway where DD just moved back from.
BUT Ma was accused of a felony and defrauding S.S. of thousands of $$$$$ from S.S., 2 months ago. They accused me of collecting almost 5,000 a month of fraudulent payments from my dead husband since 2023. They told me Pa died and was dead. I owed them a check, lump sum of thousands and they threatened me with prison and the whole f-ing thing was an eyeopener to the fact that the GOVT and every employee is broken and the whole of it all is FUBR.
Pa was and is alive and well, but somehow ended up on a MASTER DEATH LIST, that DOGE is secretly using to vet out S.S. fraud of collecting on dead peoples claims. I was told there was a 10,000 person mistake countrywide involved along with Pa. It has been a f-ing nightmare to correct. I have been to the local SS office ALOT !!!!
In May it was flooded with POC (Jamacians) who were applying for SS numbers. I was there I saw it and watched it, heard it and unless the Social Security Administration handles this J 1 program then what the hell was all that about.
I am not contradicting Sundance, I am adding first hand what I have seen and have heard from the J 1 front line only. I have tons more to say about this episode but this is not the place.
Most of them are not student age. Unless the guide line is 20-40 year olds.
Are they applying for Social Security Numbers ot Taxpayer Identification Numbers? TIN has the same digits & format as SSN, but is only used by non-citizens working the in the USA.
My Mom’s motel business used a number that looked like SSN but was only for paying Federal and State taxes.
Foreigners have always gotten preference in short-term / seasonal hiring. Plus, the Feds specify minimum hours of work the foreign workers get; which disadvantages US workers when business is slow.