It's calculated of some predefined averages that are way lower than actual market rates. Most H1B's I know are making pretty much market rate or within 5-10% of market rate though. How do they find people to work for about half I have no clue.

What happened was HCL and Cognizant were going to provide IT consultant work for Disney, but the consultants were based somewhere else other than Disney that had a lower prevailing wage.

Sponsoring employers are supposed to report the working areas on the LCA applications, and the USCIS is cracking down hard on the tech consultant firms trying to exploit that loophole this year.

FTA "H-1B immigrants work for less than American tech workers, Professor Hira said at a hearing in March of the Senate Judiciary Committee, because of weaknesses in wage regulations. The savings have been 25 percent to 49 percent in recent cases, he told lawmakers."

It's for their job title; Disney is happy to pay 150% of an Associate Junior Technician's $30k average salary compared to 100% of a Senior Systems Administrator's $150k.

That's hyperbole, but it's the same idea.

More precisely even H1Bs are also required not to replace domestic workers, but somehow I must have missed seeing Disney execs being charged?

The trick is the H1Bs are not displacing American workers at the company they work at (the outsourcing company), the company is just expanding. Nor is Disney replacing it's workers with H1Bs, they're just outsourcing to another company.

And apparently, this loophole works, because a judge just dismissed the case.

http://www.thenewyorklawblog.com/2016/10/Disney-H1B-Visa-Law...

"The outsourcing companies successfully argued that the law did not apply to them because the plaintiffs who were displaced were not originally their employees."

I believe it is based on the average for the country, which is much lower than the average in certain areas, like California.... But I may be wrong.

Pretty sure the labor certification and prevailing wage requirement is on a county / city basis (i.e. somewhat related to the actual local wages), see also https://www.dol.gov/whd/immigration/h1b.htm

Hope it isn't based on what the government pays developers. I've seen some java devs making upper 30s to low 40s within the past few years. That's just crazy.

Last time I worked with a government department here the entire IT/development team were the local equivalent of H1Bs

They hired contractors. Tata et al. are experts at this stuff.