Immigration Enforcement

Even Symbolic H-1B Curbs Provoke Employer Outcry

The latest chapter in the Alice in Wonderland story of the H-1B visa program for cheap foreign labor surrounds provisions applied to employers receiving money from the Troubled Assets Recovery Program (“TARP”).

The new rules apply what are known as the “H-1B Dependent” provisions of the H-1B program to TARP fund recipients. While largely symbolic, these provisions have provoked a response in the media that has been hysterical (“Protectionism,” “closing the job market to highly skilled workers,” “anti-free market,” and “turning away talent“).

Reality check. Look at the list of the top users of H-1B visas. The top is dominated by foreign companies that bring in hundreds, even thousands, of H-1B computer workers each year but who do not hire Americans for these positions. The H-1B Dependent provisions do not hinder them in the least.

There are two new “restrictions” on TARP fund recipients:

1. The employer must certify that it did not or will not hire an H-1B worker if it has laid off a U.S. worker in a job that involves essentially the same responsibilities and is located in the same geographic area of employment within 90 days. 8 U.S.C. § 1182(n)(1)(E)(i), (n)(4)(A)-(B).

2. The employer must certify that it has recruited U.S. workers for the position and offered the job to any U.S. worker who is equally or better qualified. 8 U.S.C. § 1182(n)(1)(G).

(There is actually a third provision under 8 U.S.C. § 1182(n)(1)(F), but it is unlikely to ever be applicable to a TARP recipient).


March 11, 2009 Posted by | Uncategorized | , | Leave a comment

Companies Seek H-1B Foreign Worker Primarily Because of Age Discrimination

Ever since 1992, when I started writing about H-1B, I’ve been stressing that not only is H-1B centrally about cheap tech labor, cheap tech labor is in turn centrally about age. Younger workers are cheaper than older ones, both in wages and health insurance costs. Of course, in addition, the younger H-1Bs are even cheaper than the younger Americans.

Result: An employer may hire a 24-year-old H-1B instead of a 24-year-old American, and usually will hire that 24-year-old H-1B instead of a 35-year-old American.

In my article for California Labor & Employment Law Review I showed the stark difference in the computer field:

group 25th percentile median 90th percentile
new grads $45,000 $50,664 $61,500
all workers $65,070 $82,120 $120,410

This is a savings in the 30-50% range, which is larger than the 15-20% difference I found between H-1Bs and Americans of the same age. Getting a young H-1B is of course the best of all from a thrifty (though shortsighted) employer’s point of view, but the savings in hiring the H-1B come even more from the age factor than from the exploitation aspect.

If you have serious interest in the H-1B issue, constantly remind yourself of this fact–the H-1B program is fundamentally about age. Employers use the program as a means of avoiding hiring the older (age 35+) Americans. THE H-1B PROGRAM IS FUNDAMENTALLY ABOUT AGE. It is impossible to consider reform, or even academic analysis, of H-1B without having this fundamental issue at the forefront of the discussion.

Which brings me to the CNN video, titled “Students Worry about Economy,” filmed at Georgia Tech.


March 11, 2009 Posted by | Uncategorized | | Leave a comment

Anger Grows in India over H1-B U.S. Visa Rules

With the economies in the U.S. and India both struggling and with unemployment rising, the outsourcing of American jobs to Indian workers has become an even more explosive issue. That’s leading business leaders, politicians, and ordinary citizens in both countries to focus on a controversial visa program, the H-1B, that allows a limited number of foreigners to work at U.S. companies for up to six years. Critics have long claimed the program allows high-paying software-writing and engineering jobs at companies and state governments to go to foreigners.

On Feb. 23, the H-1B critics got a new round of ammunition. Data released by the U.S. Citizen & Immigration Services showed that in 2008, for the second year running, many of these visas went to Indian IT services companies that were sending engineers to the U.S. temporarily to work. In effect, a visa that had been designed for U.S. corporations to remain competitive at a time of talent shortage had become a blessing for the U.S. operations of global Indian companies, allowing them to send engineers from India, rather than hiring locally.

The news comes at a time when many Indians already suspect the U.S. is trying to put a squeeze on the country’s successful outsourcing industry. Each year, the American government hands out 65,000 H-1B visas, and Indian engineers receive many of them. However, as part of President Obama’s economic stimulus package, Congress passed provisions to bar any U.S. company that receives bailout dollars from directly hiring workers on these H-1B visas.

Fueling India’s Diaspora

In India, there has been a swift outcry. “This is just irrational protectionism,” says Montek Singh Ahluwalia, deputy chairman of India’s Planning Commission. “It makes no economic sense at all.”


February 25, 2009 Posted by | Uncategorized | , | Leave a comment

H-1B Visas Really Are Inherently Harmful — Here’s Why

Last week a New Jersey employer was indicted on charges of H-1B fraud. However, I almost never report on such incidents, as I regard them as irrelevant to the big H-1B picture. The central problems of H-1B and employment-based (EB) green cards involve fully legal abuse via loopholes in the law, as opposed to violations of the law, and the large household-name firms are just as culpable as the “bodyshops.” Indeed, the industry lobbyists love it when the feds crack down on violators of H-1B law, as it gives them a chance to distract Congress and the press from the real issues (the loopholes), and to distract attention away from the big-name firms. See a prior blog for an example of this.

The Sanders/Grassley amendment to the economic stimulus bill survived conference committee. Recall that the amendment extends to recipients of TARP bailout money the H-1B hiring restrictions that normally apply only to H-1B dependent employers. As I explained in previous posts, especially this one, the restrictions are rather mild. And they too have loopholes. Nevertheless, they will have some practical impact, and much more importantly, have major symbolic impact, as they are tacit admission by Congress that the H-1B visa program is fundamentally a Bad Thing.

In the past, Congress’ message–and I mean the word “message” literally, in the form of the politicians’ public statements and letters to constituents–is that H-1B is basically a Good Thing, remedying tech labor shortages and enabling the import of “the best and the brightest” from around the world. Members of Congress continued to make such statements in spite of the facts that:

  • Congress’ own study, commissioned as part of the 1998 legislation that nearly doubled the yearly H-1B cap, found that it could not confirm the industry’s claim of a shortage studies. None of the other studies then and since, including that of the Dept. of Commerce (but excluding industry-sponsored studies), found a shortage either.
  • Two congressionally-commissioned reports, as well as various academic studies, found that use of H-1Bs as cheap labor is commonplace. The GAO report also made the point that loopholes make it fully legal to pay H-1Bs less than comparable Americans.
  • It has been shown quantitatively in several different ways that only a small percentage of the H-1Bs are in the “best and brightest” league.
  • The YouTube video, made by a prominent law firm to show its prominent clients (i.e. mainstream firms rather than bodyshops) how to circumvent the EB green card law requiring employers to recruit Americans before sponsoring a foreign worker for a green card, was widely circulated by members of Congress.


February 23, 2009 Posted by | Uncategorized | , , | Leave a comment

H-1B Amendment Survives Conference Committee

An H-1B-related amendment offered by Senators Bernie Sanders (I-VT) and Charles Grassley (R-IA) to the economic stimulus package has survived conference committee and was a part of the final bill signed by President Obama.  Entitled the “Employ American Workers Act,” the Sanders-Grassley Amendment seeks to limit entities that receive funds from the Troubled Assets Relief Program (TARP) — established by last year’s $700 billion financial services sector bailout legislation — from displacing U.S. citizen workers. (CongressDaily, February 13, 2009).

The original text of the amendment as it was filed by Senators Sanders and Grassley would have barred any recipient of TARP funding from hiring any H-1B workers. (Congressional Record, S1590).  However, on the Senate floor, the Sanders Amendment was modified so that companies that receive TARP funding are not barred from hiring H-1B workers, but instead must follow the rules proscribed for so-called “H-1B Dependent Employers.”  (Congressional Record, S1669 & S1803).  These rules require employers who have significant numbers of H-1B employees (measured in proportion to the total workforce) to: (1) attest that they have made good-faith attempts to hire U.S. workers at prevailing wages (or industry-standard wages); (2) attest that their hiring of H-1B employees does not displace U.S. workers who have sought those same jobs; and (3) maintain paper records showing that they have complied with wage and other work condition standards.

The modified amendment was eventually adopted by voice vote. As modified, this language “isn’t as tough as what Senator Grassley originally proposed… [but instead the] modified amendment… makes TARP recipients jump through extra hoops before they can hire those foreign workers.”  (BusinessWeek, February 13, 2009).


February 17, 2009 Posted by | Uncategorized | , , | 1 Comment

Report finds fraud in 20% of H-1B applications

Federal investigators discovered fraud in more than 20 percent of applications they examined in which employers were requesting H-1B visas…

Seattle Times staff reporter

Federal investigators discovered fraud in more than 20 percent of applications they examined in which employers were requesting H-1B visas to hire foreign professionals in the U.S., a finding they called a “significant vulnerability.”

In a report released late last year, U.S. Citizenship and Immigration Service cited one especially egregious case in which an employer petitioned for a business-development analyst position but later told investigators the worker would be doing laundry and maintaining washing machines.

The report’s findings appear to vindicate some critics of the H-1B program, who have said the hiring of foreign professionals hurts U.S. workers.

The immigration service promised procedural changes in the wake of the findings, but warned that the findings were not an indictment of the program overall.

“The H-1B program is immensely valuable, and most employers and workers who use it, use it properly,” spokeswoman Sharon Rummery said.

Investigators picked a random sample of 246 H-1B applications out of the 96,827 filed by employers between Oct. 1, 2005, and March 31, 2006. Holders of such visas must have at least a bachelor’s degree or the equivalent, and employers are required to pay them the prevailing wage.

But investigators found instances in which workers forged their employment and education credentials to obtain visas. No actual U.S. employer even existed in some cases.


February 16, 2009 Posted by | Uncategorized | , , , | Leave a comment

H1-B Visa Fraud Sparks Arrests Nationwide

An ongoing federal probe into H-1B visa fraud leads to 11 arrests and the indictment of IT services firm Vision Systems Group

The controversy over the H-1B visa program for highly skilled workers is heating up once again. Federal agents detained 11 people in six states as part of a wide investigation into suspected visa fraud, the U.S. Attorney’s office in Iowa announced on Feb. 12, a day after the arrests. Those arrested are accused of fraudulently representing themselves or other workers in immigration documents.

Besides the arrests, Vision Systems Group, an IT services firm based in South Plainfield, N.J., with a branch office in Coon Rapids, Iowa, was indicted on 10 federal counts, including conspiracy and mail fraud charges. The firm allegedly used fraudulent documents to bring H-1B visa workers into the U.S. The government is seeking the forfeiture of $7.4 million from Vision Systems that was gained through the alleged offenses. Five other technology companies, including Worldwide Software Services and Sana Systems in Clinton, Iowa, remain under investigation for document fraud, prosecutors said. “We are only at the tip of iceberg as to where this [investigation] leads,” said Matthew G. Whitaker, U.S. Attorney for the Southern District of Iowa. “We have a ways to go and more [fraud] to uncover.”

Representatives of Vision Systems, Worldwide Software, and Sana Systems could not be reached for comment after business hours on Feb. 12. Whitaker declined to identify the other three companies being investigated.

H-1B Program Under Scrutiny

The coordinated, nationwide enforcement effort began 18 months ago and continues, officials said. It is the first to specifically address fraud in the H-1B visa system, which critics say brings lower-cost tech workers into the U.S., displacing American workers.

As unemployment rises in the U.S., the H-1B program is drawing scrutiny for its potential effects on U.S. jobs. In October the U.S. Citizenship & Immigration Service (USCIS) released a report showing rampant fraud in the H-1B visa program. At the same time, critics say that outsourcing firms, including Infosys Technologies (INFY) and Wipro (WIT), use H-1B visas to replace U.S. employees with cheaper workers from abroad, often cycling overseas staff through U.S. training programs before sending them back home to perform such jobs.


February 13, 2009 Posted by | Uncategorized | , , , , | 2 Comments