Honey! I Shrunk The Domestic Workforce!
If you happen to be an information technology worker, then you already know what an H1-B visa is. In fact, it's likely that you work with several holders of same. Are you ready for the next round?
I didn't think so.
As if H1-B visas weren't bad enough, the business community wasn't to be completely satisfied until certain "problems" were solved. There were limits, requirements, restrictions, reviews, audits, documentation issues, "political correctness" - what's a poor employer to do?
Introducing -- (buzz roll) -- L1 visa! (TA--DAAAAAH!)
As if we needed more proof, the multinationals are at war with the American worker, especially if said worker is highly-paid.
It was begun at the behest of the IT industry, who claimed that there weren't any qualified American people to work the jobs that were available, so they just HAD to have the right to bring someone in from someplace like India. Congress, with an eye toward upcoming elections, went along with the program, provided that no American worker would be placed at a disadvantage of any kind. As you will see below, certain conditions were made law in an effort to "protect" American employment, but as the Law of Unintended Consequences states:
Actions of people — and especially of government — always have effects that are unanticipated or "unintended."
The problem is - a better (and much simpler) long-term solution would have been to have the employers spend their money on training American citizens, but I guess that made too much sense or something. The employers grumbled, but they went along with these conditions, all the while vowing revenge.
Let's look at what is going on through the eyes of the media.
Chapter 1 - The Crisis
The Office of Citizenship and Immigration Services has said that the congressionally mandated cap of 65,000 H-1B visas has been reached less than five months into Fiscal Year 2004 (which began October 1,2003) and hence no more applications would be accepted.
The USCIS, which is now a division of the Department of Homeland Security after Congress closed down the erstwhile Immigration and Naturalization Service, said certain procedures for the remainder of FY 2004 had been implemented. All first-time employment petitions received by February 17 will now be processed while those received after this date would be returned along with the filing fee. It said petitioners could re-submit their papers when the H-1B visas become available for FY 2005,which begins on October 1, 2004, and April 1, 2004, is the earliest date at which such applications could be filed.
The USCIS said petitions for current H-1B workers do not count towards the congressionally mandated cap and accordingly, these applications would continue to be processed. These would include the extension of H-1B visas, which is an additional three years to the initial three years for which a visa is issued; a change in terms of employment for the current H-1B visa holders; applications that would allow for current H-1B workers to change employers; and applications that would allow for current H-1B workers to work concurrently in a second H-1B position.
Confused yet? It gets better!
The USCIS also noted that "petitions for new H-1B employment are not subject to the annual cap if the alien will be employed at an institution of higher education or a related or affiliated nonprofit entity, or at a non-profit research organisation or a governmental research organisation."
India has traditionally provided the bulk of H-1B workers -- over 40 per cent, primarily in the information technology sector -- but in recent years with the slump in the US economy and with jobs being outsourced, the program has become controversial with many lawmakers, both Republican and Democrat, calling for its elimination.
In 2000, when demand was at its height and the information technology sector was experiencing a boom, Congress responding to the lobbying of the high-tech industry increased the cap from 65,000 to 195,000. But that increase expired on September 30, 2003 and the cap was reverted to 65,000. Since the economy was in the doldrums, and the Internet bubble had burst, the high-tech industry, which was the driving force behind the increase in H-1B visas was lukewarm in its efforts to retain the increased cap and the few lobbying efforts fell by the wayside as the Congressional environment was not conducive to maintaining the 195,000 limit.
Some groups like the American Immigration Lawyers Association argued that the cap be at least made 115,000, arguing that H-1B workers, who not only constitute IT workers but nurses and other highly skilled professionals are vital to keep the US economy going, but Congress was in no mood to acquiesce to their pleas.
I don't know about you, but I know an awful lot of nurses who have gotten fed up with the lousy working conditions, the unprofessional disrespect, and the heavy patient workloads they are forced to carry, resulting in serious health risks to their patients. I wonder if there isn't another, REAL reason for this canard.
The President-elect of the AILA, Paul Zulkie is bemoaning that the cap has already being reached and no more new applications are likely to be approved till October. He warned that the immediate impact would mean that "projects are put on hold, capital expenditures are deferred and lives are thrown into chaos."
"... lives thrown into chaos." Could he mean the lives of Americans displaced by foreigners at the connivance of domestic employers? I didn't think so.
Chapter 2 - The Agony
"Motorola will be in trouble if many of its employees -- foreign-born graduates of US universities initially hired on student visas -- have to be deported due to visa cap."
- Belkis Muldoon, director of global immigration services for Motorola.
"I can't find enough professionals in the US with the highly specialised skills needed to produce the sophisticated sensors and other high-technology products."
- Derek Cheung, CEO, Rockwell Scientific Co.
In an ironic twist, the H-1B visa squeeze is hurting the United States and American companies more than countries like India. US employers are crying hoarse over the H-1B visa freeze while the Indian IT biggies are taking it easy as they have already stocked on the necessary visas. The United States had shut the door on foreign tech workers "a majority of them from India" early this election year amid a growing debate on job loss and outsourcing.
To apply for an H-1B visa, a US company must demonstrate that it is unable to find a qualified American for the job and agree to pay the foreign worker a wage comparable to what a US worker would earn, in addition to benefits.
SEE??? Conditions! Regulations! Requirements! It's downright un-American this governmental interference in running a business!!!
But, critics argue that companies are using the programme to replace US citizens with lower-cost foreign workers. Ever since the visa cap was frozen at 65,000, Indian IT majors have been outpacing each other to secure as many visas as possible, whether they needed them or not. But, the employers in the US have just recently found that their supply of low-cost good quality techies have dried up. Now they will have to wait till next October, before another 65,000 H1-B visas will be thrown open.
Perish the thought that they invest in training their fellow American citizens! Behold the wailing, and the gnashing of teeth:
And what is it that is troubling the US majors? They say they are trying to fill jobs with US citizens but can't always find qualified candidates, particularly in math and science. In engineering, for example, 43 per cent of the master's degrees and 54 per cent of the doctoral degrees awarded by US universities go to foreign-born students. Nearly half of the people hired on H-1B visas have graduate degrees, while only 5 per cent of the U.S. population has the same level of education, said Thom Stohler, vice president for work force policy for the American Electronics Association. Rockwell Scientific Co CEO Derek Cheung says the visa freeze means Rockwell and other US technology firms, schools and hospitals will not be able to bring in employees from abroad -- just when they are needed most.
American CEOs are now predicting that a shortage of H-1B visas will force them to pass over promising foreign-born scientists, leave critical jobs unfilled, or delay projects requiring special talents. Be it an Indian techie or a Chinese physicist or a Pakistani doctor or even an African model, the crunch is going to be felt everywhere. Harris Miller, president of the Information Technology Association of America, says the anti-immigrant anti-globalisation mood is the most negative he has seen in the last 25 years.
DUH! And I bet he doesn't understand why this is so! And we let people like this run our industry??? It's no wonder it's fallen down and can't get up!
A restriction on foreign workers could actually backfire, resulting in companies setting up research operations overseas where they don't face restrictions on hiring.
Might not this be the motivation all along? They might even get The Best Federal Government Corporate Money Can Buy to cut loose a few of our hard-earned tax dollars to fund the job transfer!
A spokesman for US Citizenship and Immigration, which issues the visas and is part of the Department of Homeland Security, says it's "way too early" for the agency to analyse and disclose the breakdown of skills possessed by the people who were granted the H-1B visas in 2004--or the list of employers seeking the largest number of visas.
I wonder if We, The People can outsource this entire government, our employees? We might get better service for less cost out of the replacement government. That's what all the employers do nowadays, isn't it?
Chapter 3 - The Preparation H1-B
U.S. immigration officials haven't announced a definite cutoff date and are saying only that they expect the cap to be reached by the end of March. However, immigration experts and sources familiar with the U.S. Citizenship and Immigration Services visa process told Computerworld that the cap has already been reached and that they're bracing for the cutoff. That means new H-1B visas won't be available until the next fiscal year begins Oct. 1.
The imminent shutdown wasn't unexpected by immigration experts, since authorities last month said that 43,500 H-1B applications, either approved or pending, had already been counted against the cap. The number of visas generally available for the current fiscal year was further reduced by a free-trade agreement that specifically allocated 6,800 visas for use by workers from Singapore and Chile.
The H-1B visa cap wasn't reached in any of the past three years, when approved applications fell well short of the annual 195,000 visa limit. But the lower cap could force companies to alter their hiring plans.
Cisco Systems Inc. has hired H-1B workers in the past but "we're not hiring right now," said John Earnhardt, a Cisco spokesman. He noted that as for as many Silicon Valley employers are concerned, "there is a lot of untapped talent in the U.S. right now" because of IT workforce reductions.
"For an employer that wants to hire a foreign national for a given project, they won't be able to do it until October," said Vic Goel, an immigration attorney in Greenbelt, Md. Goel said the reduced cap may prompt some companies to send more work offshore, and it could hinder their ability to hire academically superior foreign students graduating from U.S. universities.
OK - I'm confuded. Which is it? There are a lot of workers, or we can't find enough???
But the reduced cap may also improve job prospects for U.S. citizens, he said. "If you are in a situation where you are an out-of-work American, it may result in some employers looking at resumes that they may have disregarded the first time" because those applicants didn't have the exact skill sets being sought, Goel said.
Harris Miller, president of the Information Technology Association of America in Arlington, Va., said lobbyists are continuing discussions with members of Congress about raising the cap this year. But he said it's too early to tell whether those efforts will succeed. Miller said he sees a rising protectionist attitude that may make it difficult. "Right now, the mentality among a number of members of Congress is what I would call 'fortress America,' " he said.
I really have to wonder about this guy! Bush hasn't completely gutted the Constitution yet, so Congressmen are forced to pay SOME attention to their constituents if they expect to keep that fat Federal paycheck!
Unemployment among computer engineers in the last quarter of 2003 was 9%, said Ron Hira, chairman of the IEEE-USA Career and Workforce Policy Committee. He said there's no way of knowing with certainty what impact the reduced H-1B visa cap will have on U.S. high-tech workers seeking jobs.
But Hira, an assistant professor of public policy at the Rochester Institute of Technology in New York, said the H-1B program is imperfect. He noted that his committee's analysis of data on employers' use of the visa program shows that some companies are paying H-1B visa holders wages that are below what U.S. workers would receive.
The H-1B visa "is supposed to work as a last resort rather than a first choice," he said. "And I'm not sure it's working that way anymore."
We should outsource the repairs - it might get fixed this time!
Chapter 4 - The New Hope
Aurobindo Dasgupta is hiding his optimism under a cloak of nonchalance, but he knows he has a great chance of bagging a hot, hot post in the US with the financial services company he works for. His employers are considering picking him ahead of American competitors, simply on merit, for a job that would normally be held by someone who's spent several years working in the US. The job involves planning for the US market, after all. But Dasgupta is the favourite for the post because he seems to be the best person for the job out of his globe-spanning employers' huge workforce.
If he gets the post, though, Dasgupta will not be working on a H1-B visa. Instead, his company will simply take him over on an L-1 visa. From Dasgupta's perspective, it makes no difference: he'll be earning what his company thinks he's worth, not a figure at a huge discount that an American in the same position would get.
That's a win-win situation for both the company and the professional, because the L-1, unlike the H1-B, is not subject to any kind of cap. As employment consultants point out, that means there is no competiton for the limited number of permits allowed under the H1-B. Indeed, with only 21,500 of the 65,000 H1-B visas allotted for October 2003-November 2004 still up for grabs [as of January 30], companies looking for overseas talents, especially from countries like India, are expected to resort to the L-1 instead.
For those who came in late, the L-1 visa is used for intra-company transfers: typically, a Wipro or an Accenture will hire you in India and then post you temporarily in the US, using the L-1 visa.
Right now, tech companies in the US are rather worried about the possibility of not being able to bring in Indian programmers if the H1-B quota runs out. Projects are expected to be stalled mid-way once the cap is reached, which is now likely to be as early as April. That means no company will be able to hire fresh global talent on the H1-B for as much as six months between April and October this year.
Can their projects afford to be put into cold-storage? Especially since, in an election year, the last thing that the Bush Administration is likely to do is to lift the H1-B quota back from 65,000 to anywhere near the 195,000 level at which it stood in the past two years.
Ironically, it was US companies' inability to hire that many people on H1-Bs over the past two years - thanks to the tech downturn - that led to the curtailing of the quota in the first place. In 2003, only 78,000 H-1B visas were issued against the cap, and in 2002 only 79,000 were, according to government figures. But now, just as companies are ready to hire, the rules won't allow them to bring more people over on H1-Bs.
Indeed, one form of hiring that is likely to seem less attractive to Indians as a result is campus-hiring in April. As companies hit US B-Schools and technical colleges for fresh recruits, they'll have to pass over Indians since the H1-B quota will likely have been exhausted by then.
Enter the L1
The advantages for employers are obvious: there is no cap on the overall number, which means a company can bring in as many L-1 pros as it likes, even in groups. There are no stipulations such as paying market salaries or ensuring that an American citizen couldn't have done the job. Best of all, clearance takes as much as six to eight weeks less than for the H1-B.
All that a company has to do is to hire you in India, either directly or through a subsidiary, affiliate or parent company, and transfer you to the US.
The only pre-condition: you must have worked for at least one year out of the three years prior to getting the visa with the company that's sending you or taking you over. In other words, you needn't even be employed by the company at the time - you could be rejoining after a gap of up to two years. Don't expect salary parity with people in the US, however, unless it's an honourable company - and there are many of them - that's hiring you.
However, for all its advantages, the L-1 has not been used as widely as the H1-B, which is probably the reason it hasn't attracted a cap yet. In 2001, for instance, the 59,384 L-1 visas issued were way short of the 161,643 H1-Bs. In 2002, the corresponding figures were 57,721 and 118,352. Last year, 54,817 L-1 pros started work in the US, compared to 100,969 H1-Bs. Like the H1-B, Indian pros are the biggest L-1 species, too, receiving a quarter of the visas issued in 2002.
But all that could change now. The most interesting aspect of the L-1 visa is the nuance that differentiates it from the H1-B. On the face of it, the two are similar, but actually, besides the regulatory caps, the spirit behind the application is quite different. The H1-B is for professionally qualified people who fill jobs for which no American candidate can be found: thus, in theory it is meant to bridge the gap between demand for and supply of human resources. It's also renewable.
The L-1 actually comes in two categories: the L-1A is for managers and executives who needn't have any special higher educational qualifications. It's applicable for five years and cannot be renewed. The L-1B is for other professionals who are considered to have an intricate understanding of the processes and technologies used by the company hiring them. This version runs for seven years.
For both these sub-categories, the idea is that companies operating in the US - whether American or foreign - can bring over people who can transfer knowledge from their parents' affiliates' or subsidiaries' operations, and can add value to American operations. These are not meant to be jobs for which Americans could have been hired - they are meant to utilise the talents of specific individuals. And the champions of the L-1 argue that the visa is key to improving the competitiveness of American as well as foreign companies doing business in the US.
Of course, whether employees really look at the L-1 that way is another matter altogether. It's true that it would be easy for companies to simply substitute the H1-B with the L-1 when getting Indians to work in the US. But although those protesting against the so-called loss of American jobs to Indians and others have included the L-1 in their targets, this 34-year-old visa has, on the whole, escaped censure in a way the H1-B hasn't.
If you want a US assignment, therefore, better start reading the fine print of the requirements for a L-1.
If Americans want to save their jobs, they better read the fine print contained in the Constitution of the United States.
Chapter 5 - The Rescuers
You thought you could go to the US on a L-1 visa even if the H-1B quota is over? Well, the truth is, the L-1 programme could soon find itself shackled even before the H-1B runs out. US politicians, wary of the public resentment against lower paid foreign workers taking away jobs, are now taking up cudgels on their behalf against L-1 visas.
On Wednesday, several US technology professionals who have lost their jobs to Indian IT pros, went before a congressional panel to argue their case. Almost all those appeared before the panel had one complaint - that companies were abusing the H-1B and L-1 programmes, according to reports in technology Website Zdnet.com.
L-1 visas allow companies to temporarily bring in employees from other countries for managerial or executive work, or for work that entails specialised knowledge. The L-1 programme has a five-year limit on employees with specialised skills staying in the US and a seven-year limit on executives. But unlike its cousin, the H-1B visa programme, Congress has not limited the number of L-1 visas granted each year. There is also no required pay rate for the L-1.
Estimates of L-1 visas issued till date vary. According to the Federation for American Immigration Reform the number of L-1s has grown from just over 75,000 in 1992 to more than 328,000 in 2001, The ITAA's estimates are lower; the organisation estimates about 121,000 new L-1 visa holders entered the US in 2001.
According to Rep. Henry Hyde, R-Ill., the number of L-1 visas issued has tripled during the past 20 years, to about 113,000 in 2002. What is clear, however, is that US and Indian companies with US operations are relying heavily on the L-1. All that could change soon. The congressional hearing raises a notch higher the intensity of the fight to curtail the controversial visa programmes. According to Hyde, a State Department memo from 1996 presents documentation indicating that, at that time, "ninety per cent of the L petitions investigated by the American Consulate in Guangzhou proved to be fraudulent."
Sona Shah, a US citizen and computer programmer, told the panel that a subsidiary of computer services company Automatic Data Processing had abused the L-1 and other visas. The firm had employed foreign guest workers and denied assignments or training to US employees like her. Shah said the US professionals were kept around temporarily to obscure the use of cheap foreign labour. "Our skills (and) morale deteriorated from this lack of training and hands-on work," Shah said. "Periodically, batches of us American workers, hired as window dressing, were terminated." Shah and her fiance, Kai Barrett, who worked for ADP subsidiary Wilco Systems as an H-1B visa holder, are suing the company.
Some professionals who deposed before the panel also fumed about how companies make staff train foreign workers who are set to replace them. Patricia Fluno, an ex-employee of a Siemens unit in Florida, said: "This was the most humiliating experience of my life." She lost her job to a lower-paid L-1 employee from Tata Consultancy Services, says Zdnet.com.
US labour groups also accuse Indian firms of using the visa programme to spirit away knowledge from the United States. Michael Gildea, executive director of the department for professional employees of US labour organisation AFL-CIO, said: "Once the team of temporary workers has the knowledge and technical skills -- sometimes after being trained by US workers -- as much of the work that is technically feasible to offshore is then carted back to India."
Gildea added that Infosys, TCS and Wipro were acting as "bodyshops" , bringing in foreign workers through the L-1 system and then subcontracting them out to other businesses. Indian IT companies are among the biggest applicants for H-1B visas and are heavy users of L-1 visas. So any legal restrictions placed on the programmes would hit the Indian techie the hardest.
The lone defender of the L-1 programme at the hearing was Harris Miller, president of the Information Technology Association of America (ITAA).
He told the lawmakers that changes to L-1 rules would trigger a trade war that would hurt US IT companies, which export more IT products than are imported into the US. Miller said the programme helped US IT companies fill critical jobs, by bringing in specialists. This results in more jobs for US workers, he said.
HUH?!?!?!? What as - curried burger assemblers???
He also called for a better definition of the "specialised knowledge" needed by L-1 applicants, because some companies may have too broadly defined the category. An applicant is supposed to have specialised knowledge of the company's products, service, research, equipment, or other functions or advanced knowledge of the company's processes and procedures. "The overall programme is not broken and doesn't need to be fixed," Miller said. He also argued that tampering with the L-1 programme could reduce the amount of foreign direct investment made in the United States.
I have a hard time buying what this guy is trying to sell. The scare tactics ring empty - Bush has already overused them.
Whatever the outcome of the hearing, already US lawmakers have proposed several bills that aim to reform the visa programmes. The proposed bills would end the practice of allowing L-1 visa holders to be subcontracted by one employer to another, require L-1 workers to be paid the prevailing wage, and require all companies that hire H-1B employees to comply with lay-off protections and recruitment requirements. The latter measures were till now reserved for firms relying heavily on H1-Bs.
And we can see how well THAT set of regulations worked!
Adding to all the resentment among US workers is President Bush's call for a new temporary worker programme, which could cover skilled workers too. The programme, Bush said, would "match willing foreign workers with willing US employers when no Americans can be found to fill the jobs."
Why not a real "No American Worker Left Behind" program instead?
While announcing the plan Bush seemed to focus on less-skilled workers employed in the United States. However, Margaret Spellings, Bush's assistant for domestic policy, indicated later that the programme could extend to highly skilled positions as well. She said the programme will be "non-sector specific" and indicated that programmers or other tech professionals could be covered by the programme. More reason why it may not ever take off. Worse still, the Bush programme could actually fuel the backlash against H-1B and L-1 workers.
Personally, I'd rather see it fuel a voter's backlash against the economic traitor who thinks he's the elected President of the United States.
Chapter 6 - The Denial
Leading software exporters like Wipro, Tata Consultancy Services and Infosys Technologies who have been listed by a US labour organisation of abusing L-1 visa, vehemently denied any instance of visa violations. Michael W Gildea, executive director of the Department for Professional Employees, an umbrella organisation of 25 unions, on Wednesday, had said leading Indian software firms were acting as "body shops", bringing in foreign workers in L-1 visas and then subcontracting them out to other businesses.
Gildea told the House International Relations Committee that some of these firms and others like them had a "troubled history" under the H-1B
visa programme. "Yet, these firms are now among the biggest users of the L-1 programme supplying Indian IT talent to a who's who of the Fortune 500 corporations," he said.
L-1 visas are for "intracompany transferees" and L-2 visas are granted to their spouses and dependent children. Dan Stein, Executive Director for American Immigration Reform, told the Committee that that unlike applicants for other categories of temporary employment visas, L visa holders need not maintain a legal intent to return home. This makes it easier for them to get on track to petition for permanent resident status "and makes something of a mockery of the idea that this is a temporary visa programme," he said.
Reacting to this allegation an Infosys spokesperson said that the company complies with visa statues and regulations in letter and in spirit and works with governments and consulates of the countries in which it operates to ensure that it fully understands and correctly interprets the immigration regulations.
"L-1 visa regulations stipulate that only employees with specialised knowledge or holding managerial and executive positions can file an application. Infosys adheres to this regulation and more importantly, does not differentiate between H1 and L-1 pay scales, although not legally mandated. We are primarily an H-1B dependent company, with 65-70 per cent of our employees in the US holding H1-B visas. Most of our employees stay in the US for the duration of the project, which is typically 1-2 years, and return to the home country." said a statement from Infosys.
TCS, on its part, said that the company operates within law and hence there is no question of misuse. Wipro, the other company which has been dragged into this controversy in a statement said, "We are in total compliance with the requirements of law relating to visa. Hence the question of abuse of any type does not arise."
Sure - and you will respect American workers in the morning!
Chapter 7 - The Beneficiary
A pro-outsourcing lobbying group has come together to counter the flood of anti-BPO testimony before the House International Relations Committee. The group, comprising the US Chamber of Commerce, the National Association of Manufacturers and the American Council on International Personnel told the HIRC, headed by Congressman Henry Hyde (Illinois-Republican) that tampering with the L1 visa program could be counter-productive to US interests. In recent hearings before the HIRC, witnesses had alleged that Indian infotech companies were operating like body shops, and using this visa category to displace American workers with lower paid Indian workers.
Outsourcing and India: The Complete Coverage
The group told the HIRC it shared these concerns, but pointed out that to call for a ban on the L1 visa, which was created in 1970 to enable US companies with international operations to transfer senior executives and employees with specialized knowledge, would be throwing the baby out with the bathwater.
'Efforts to superimpose quotas, minimum wages and other restrictions on the L1 visa misunderstand the fundamental nature of the visa and the role it plays in international companies and in our economy,' representatives of the coalition told the Hyde-led committee. 'Any changes could inadvertently hurt this country's ability to attract foreign direct investment and the jobs that go with investment," coalition spokesman Randel K Johnson, vice president of labor, immigration and employee benefits of the USCC which represents over three million businesses, told the committee. 'Any limitations on this visa category could severely harm the ability of US companies to operate and expand in the domestic and international markets,' Johnson warned.
Adding its weight to the coalition's arguments, American Business for Legal Immigration, a coalition of associations and companies that backs legal, employment-driven immigration, asked the committee not to rush into any review of immigration policies that could hinder the ability of American companies to compete in the global economy.
I'm certain that they would be equally concerned about hindering the ability of the American worker to compete in the global economy, wouldn't they?
ABLI chair and vice president of the National Association of Manufacturers' Human Resources Policy Sandy Boyd said, 'The expertise shared and experiences gained (through the L1 visa program) are integral to developing talent, growing markets and generally enhancing the international competitiveness of the US companies, that ultimately create jobs for Americans.' It would be unfair, Boyd said, to undermine the program simply because a few companies have misused it.
There you have it. When someone asks you where all the good jobs went, keep this information in mind: Just say "The L-1 with the H1-B!"
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