H-1B visa outsourcing abuse under investigation by US Senate

Two U.S. senators on Monday asked nine foreign-based companies to explain how they are using their United States H-1B work permits that they have obtained for their employees. Recent information about misuse of the program has created a heated debate in the U.S. Congress as it moves into the final stages of presenting immigration reform measures this month.

Of greatest concern is that the limited number of visas are being used to outsource American jobs, instead of bringing in educated and skilled professionals to work for U.S. businesses.

This year the entire quota of regular United States H-1B visas evaporated in one day. Petitions for the 65,000 standard H-1B's exceeded the available quota by more than a 2:1 ratio. Last year the available cap had been reached in the record time of about seven weeks.

What Happened?

Previously, people could expect the H-1B petition process to remain open through the summer from the standard begin date of 01 April every year for the upcoming fiscal year.

An additional 20,000 H-1B's are available beyond the standard cap for foreign-born professionals who have graduated from an American university with an advanced degree. Some of these usually remain available at least through the end of the year. This year they were all gone in just over four weeks, with all submissions after 30 April being rejected.

U.S. scientific and technical industries, especially the IT sector, have been lobbying hard to have the quotas increased for several years now. Notably, highly visible CEO's like Bill Gates of Microsoft and Larry Ellison of Oracle have personally made appearances before the U.S. Congress, virtually demanding that the caps be raised.

These industry leaders have regularly argued that there were thousands of unfilled jobs in the United States that require people with education and skills from around the world to keep American businesses competitive and innovative. They claim that the quotas are too low and that tens of thousands of qualified people were being kept out of the United States, and that this was hurting American businesses.

Some countries have been lobbying the U.S government to raise the cap, too. In particular, the Indian government has been pressuring George Bush to introduce immigration reform measures that would favor Indian nationals attempting to work in the U.S.

Fallout

After the stunning demand for the H-1B visa this year, people began to investigate the problem. Congress and the White House are trying to craft major immigration reform this year, and an understanding of the situation is critical.

What has been noticed is that between 70% and 80% of the H-1B visas granted in 2006 went to India-based outsourcing firms. Employees of these firms were not being hired to work for U.S. businesses but, rather, to effectively study how U.S. businesses operate and to determine their needs and methods.

Then, using their newly forged contacts in U.S. industries, these firms then outsource the work back to India-based industries. Many of these people only use their coveted H-1B for two to four years, rather than the full six-year limit, causing resentment among people who would wish to have an H-1B as a means to leverage permanent immigration to the U.S.

While technically not illegal, this practice violates the intent of the H-1B program. The H1B visa program was launched in 1990 to allow foreign scientists, engineers and technologists to be employed for up to six years in the U.S., at the end of which they must obtain permanent residency or return home. It is also possible for the sponsoring company to petition for H-1B extensions which are exempt from the caps.

Senate Assistant Majority Leader Richard Durbin, an Illinois Democrat, and Sen. Charles Grassley, an Iowa Republican, said in letters to the companies that they had received reports of fraud and abuse of the H-1B visa program.

At the same time, they have introduced measures in the U.S. Senate targeted at the H-1B and the L-1 visas to ensure that the programs perform their intended function - to allow foreign born professionals to bring their skills into the U.S. when those skills cannot be found domestically.

Reaction

"More and more it appears that companies are using H-1B visas to displace qualified, American workers," Grassley said in a statement.

The senators said some visas were being used to train foreign workers in the United States to perform jobs that were later transferred to India and other countries. "The reality is that too many H-1B visas are being used to facilitate the outsourcing of American jobs to other countries," Durbin said.

Besides the India-based giants Infosys, Wipro and Tata Consultancy Services, the senators also sent letters to Patni Computer Systems, I-Flex Solutions Inc., Satyam Computers Services Ltd., Larsen & Toubro Infotech Ltd., Tech Mahindra Americas Inc. and Mphasis Corp.

They asked the companies for information on the number of visas they hold, wages, efforts to recruit qualified American workers, outsourcing of jobs to other countries and whether any U.S. workers have had their responsibilities outsourced.

In April, a number of measures were proposed for upcoming immigration reform efforts in the Congress. The U.S. is trying to provide a bill by the end of May, with the hopes of passing significant reform before the end of this summer. Among those measures are proposals to greatly increase proof of efforts by companies to find U.S. citizens and residents to fill positions before they may be offered to foreign nationals.

The senators have introduced legislation aimed at protecting U.S. workers and limiting the ability of companies to use the visas to train workers with the aim of shifting jobs overseas. Aides said the measure would be offered as an amendment to comprehensive immigration legislation that the Senate could take up as early as this week.

"As we move closer to the debate on an immigration bill, I continue to hear how people want to increase the number of H1B visas that are available to companies. Considering the high amount of fraud and abuse in the visa program, we need to take a good, hard look at the employers who are using H1B visas and how they are using them," Grassley said in a statement.

"Supporters claim the goal of the H1B program is to help the American economy by allowing companies to hire needed foreign workers. The reality is that too many H1B visas are being used to facilitate the outsourcing of American jobs to other countries," Durbin said.

"We have to look at the system that generates these visas and the way they are used. This legislation will help protect American workers first by stopping H-1Bs from being exploited and used as outsourcing visas."

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