Saturday, April 23, 2016

Filling Skills Gaps or Displacing US Employees? Abuses of the H1-B Visa

Guest blogger: Katie Hall, second-year law student, University of San Francisco

In the tech bubble of Silicon Valley, there is a presumption by many outside of the industry that tech giants are relying too heavily on foreign employees and not hiring enough U.S. labor. Stemmed from concerns over the lack of U.S. wage growth over the past several years,[1] there is a fear that the tech giants are firing U.S. employees, and replacing them with lower paid foreign labor. While there are some situations where that most definitely is true, on the whole tech companies are using temporary foreign labor as our visa system intends, to cover gaps while looking for U.S. employees. There are two main companies, however, that are abusing the temporary foreign labor visa system, and amendments to the H-1B visa system are imperative to stem further manipulation by future companies.

            The definition of an H-1B qualified worker is an alien having “residence in a foreign country … who is coming temporarily to the United States to perform other temporary service or labor if unemployed persons capable of performing such service or labor cannot be found in this country.”[2] Introduced in 1990, H-1B visas are currently capped at 65,000 per fiscal year, plus an additional 20,000 for people with master’s degrees. The cap has ranged to as high as 195,000 in the past, and there is a concerted push today to increase the current allotment back to that 195,000 cap. Various tech industries, President Obama, and even some members of Congress support an increase, mainly Senator Orrin Hatch (R-Utah) who proposed a bill that would overhaul the system.[3] In 2015, U.S. Citizenship and Immigration Services received 233,000 petitions during the filing period,[4] demonstrating a much higher demand from employers than the current government cap of 85,000 total H-1B allows.

As the vast number of visa requests demonstrates, there is a legitimate need for specialized labor in some fields that cannot be found in the U.S. labor market. While many companies use these visas to augment their domestic work force for legitimate reasons, there are grave abusers. For 2013, when information has been made available under a Freedom of Information Act request by the Economic Policy Institute, two companies received far more visas than any other. Both India-based IT firms specializing in outsourcing and offshoring, Infosys received 6,269 H-1B petitions and Tata Consultancy Services received 6,193, totaling 12,462 H-1B visas.[5] 

Both companies pay workers much cheaper wages than locally recruited U.S. workers. Infosys averages $70,882 and Tata $65,565, while the U.S. Department of Labor statistics for a Computer Systems Analyst in Rosemead, CA average $91,990 (the location of SCE detailed below). This means that by using these companies to augment staff, they not only get trained employees, but the workers are $20,000 a year cheaper.

            A very well publicized example of this happened at Southern California Edison (SCE) in early 2015. SCE laid off 400 IT employees, and another 100 left voluntarily. To replace these positions, SCE used Infosys and Tata to bring in H-1B visa employees to be trained temporarily in the U.S., and then they returned to India to run their IT department oversees.[6] While technically a legal use of the visa program, this greatly goes against the spirit of the program. There are numerous other examples peppered through out the last few years demonstrating U.S. employees being replaced by lower paid H-1B visas recipients, including layoffs at Disney, Molina Healthcare (who’s ex-employees even filed a SLAPP action), and Pfizer Connecticut R&D.[7]

            Proponents of the current H-1B system say that it is a great stepping-stone for permanent immigration to the U.S. However, this is based on information from Infosys and Tata that is not true. In 2013, Infosys sponsored seven H-1B workers for permanent residence, and Tata sponsored none. Considering they petition for tens of thousands of visa each year, and only sponsored seven for permanent residence, these companies are only bringing in temporary, cheaper, disposable labor, and are not permanently introducing talent and innovation to the American labor market as many assume.[8]

            In spite of these abuses, many argue the system is overall still benefiting U.S. corporations. With a stagnation in U.S. wages, a top concern for the American populace and our perceived slowing economic growth, issues like outsourcing of our labor are coming under closer and closer scrutiny. To try and stem the abuse of the system, there have been proposals to cap the total number of visas that any one company could request, but due to gridlock in Washington no reforms have been passed. While a system capping the number of H-1Bs any one company can hold is still subject to abuse, it is perhaps a step in at least breaking up the companies that seem to hold a large monopoly on the market.

There are also calls for USCIS to more closely review each petition to ensure that the wage requirement is more comparable to the Department of Labor average, proving that companies are not simply hiring cheaper labor. However, this suggestion receives push back from those in the industry claiming that the costs in longer processing time for the hundreds of thousands of requests would not be worth the benefit.

Another proposed way to sidestep the H-1B visa process all together is to amend our student visa system. This would allow immigrants who graduate from U.S. universities to stay and work for a number of years on student visas after gradating from U.S. universities so that they have a longer opportunity to find employment, retaining their talent in the country. This way we keep resources in the U.S. that can benefit our labor market. This would provide another avenue for employers to find qualified workers, namely, U.S. trained students that otherwise would have to return to their home countries.

The H-1B system could benefit from an overhaul to make sure that immigrants are given an opportunity to work temporarily in the U.S. The overhaul should provide a way of becoming lawful permanent residents, instead of being exploited as cheap, temporary, labor designed to displace a U.S. citizen worker and save the company a few thousand dollars a year.

 

[1] http://www.bloomberg.com/news/articles/2016-04-15/consumer-sentiment-falls-on-concerns-over-u-s-wages-elections

[2] 8. U.S.C.A §1101(H)(i)(b)

[3] http://www.computerworld.com/article/2868428/new-h-1b-bill-will-help-destroy-us-tech-workforce.html

[4] https://www.uscis.gov/news/alerts/uscis-completes-h-1b-cap-random-selection-process-fy-2016

[5] http://www.epi.org/blog/new-data-infosys-tata-abuse-h-1b-program/

[6] http://www.computerworld.com/article/2879083/southern-california-edison-it-workers-beyond-furious-over-h-1b-replacements.html

[7] http://www.cio.com/article/2946119/careers-staffing/5-shocking-examples-of-h-1b-visa-program-abuse.html#slide1

[8] http://www.epi.org/blog/new-data-infosys-tata-abuse-h-1b-program/

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