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Tuesday, October 6, 2009

New H-1B VISA Reform: A Hugely Complex Problem

Monday, October 05, 2009 10:21 AM/EST
Analysts: Potential New H-1B Visa Clauses a Nuisance, No Game Changer

Republican Iowa Sen. Chuck Grassley is pushing for reform in the H-1B visa program and recently urged the U.S. Citizenship and Immigration Services (USCIS) to ask for evidence that workers coming over to the United States actually have employment.

Grassley recently wrote to the director of the USCIS: "Simply put, adjudicators should be asking companies up front for evidence that H-1B visa holders actually have a job awaiting them in the U.S., i.e., that workers are not coming in only to be 'benched' by employers."

Some business analysts in India do not see the current efforts to prove employment evidence as anything more than an "irritant," writes Amit Tripathi of DNA India.

Apurva Shah, a Mumbai-based IT sector analyst at broking firm Prabhudas Lilladher, said, "This is not going to impact companies significantly. This can at best be termed as another irritant, as a small portion of the onsite workforce remains in transition between projects." On an average about 5% of the onsite workforce of Indian IT service firms remains on bench.

"I have not heard about such a clause yet. But even otherwise, we hardly have about 5% of our people on bench onsite. That too cannot be called as bench strictly, as most of them are on leave or have finished one project and being inducted into another. And all of them are actually on salary. So there is hardly any impact of such a clause," said an Infosys executive who did not wish to be named. Analysts feel the IT industry has ways to work around the clause.

"Companies such as TCS, Infosys and others are setting up delivery and development centres in Mexico and Canada which are close to US. This helps firms save on costs as well as serve US customers from those locations, since people from Mexico and Canada do not need H-1B under the North American Free Trade Agreement (Nafta)," an analyst said.

Whether or not the USCIS will follow Grassley's lead on evidence gathering remains to be seen.

In 2007, an audit of a small percentage of H-1B visa companies found that there have been cases of fraud that included forged documentation, phantom businesses and phony job offers, and more. The Justice Department has been enforcing laws on the books after the audit, and has brought suit against a number of companies, including Vision Systems Group, Cognizant Technology, Patni Computer Systems and Computech.

In an effort to show that the USCIS takes fraud seriously, the organization began earlier this year making surprise audit visits to companies it suspects is operating under false pretenses.

At issue is whether the fraud is as widespread as Grassley and others believe. The H-1B visa program has had up to 65,000 participants with companies of all sizes, many of them household American firms including Microsoft, but also many of the largest Indian outsourcing companies like WiPro, Infosys and others.

H-1B Visa Companies Getting Unannounced Visits by Feds
By: Don E. Sears, e-week, 2009-08-17

If your company is using H-1B visa workers, you may get a surprise from the government. Piece of advice for your manager: It's voluntary, but the surprise could intimidate.

In an attempt to help root out fraud and other criminal activity, the U.S. Citizenship & Immigration Services agency is making surprise visits to companies with H-1B visa holders on the books.
After reports came out that there has been evidence shown of fraudulent use of temporary workers, bad documentation abusing the system and many visa holders not being paid prevailing wages, the Feds are showing up without notice and looking to see that everything is on the up and up.

From a CIO article on the subject (edited):

Recently, the USCIS has begun making "surprise visits" to the U.S. work sites of companies that sponsor H-1B and L-1 visa holders, including some large U.S.-based financial services companies, says Elizabeth Espin Stern, a partner in the Washington, D.C. office of law firm Baker and McKenzie. USCIS assessors come with a checklist of questions designed to confirm the identity of the employer who petitioned for the visa and the visa beneficiary and to verify that both are in compliance with the terms and conditions of the visa...

The objective of the unannounced on-site visits is clear: to detect fraud and abuses of the visa program. A study conducted last year by the Office of Fraud Detection and National Security estimated that 21 percent of H-1B visa petitions violate H-1B program rules. The offenses range from technical violations to outright fraud. The most common violation was not paying a prevailing wage to the H-1B beneficiary.

Resource Library:

The USCIS overseas the H-1B and L-1 visa programs. One question that some attorneys wonder, however, whether surprise visits, random audits and other fraud detection tactics are in the jurisdiction of this agency? From the same article:

USCIS investigation tactics often exceed what is necessary and reasonable to obtain H-1B application verification information, according to Stern (Elizabeth Espin Stern, of law firm Baker and McKenzie). Unlike the Department of Labor, which has the statutory authority to investigate an employer's compliance with visa obligations but rarely conducts audits unless there are complaints, the USCIS has no statutory or regulatory authority to enter the workplace of H-1B and L-1 visa holders. And investigators do not arrive with search warrants or subpoenas, says Stern.

What's more, USCIS has hired contract workers, who complete a USCIS training course, to conduct the site visits. But many of the contractors lack expertise about how companies maintain employment records or demonstrate employment terms, adds Stern.

Evidently, compliance with the program is voluntary, but imagine if an agency of the federal government busted into your workplace without being prepared? It's not hard to imagine your employer feeling a bit compelled or intimidated to hand over information.

How nutty are the rules for these visas? Well, they can get rather challenging, especially if your company is considering getting rid of these employees as part of layoffs. Take a look at the blog post When H-1B Visa Holders and the Recession Collide.

Wednesday, August 19, 2009 4:56 PM/EST
Readers' Comments on H-1B Visa Surprise Visits

There is some buzz from readers on the recent blog article "H-1B Visa Companies Getting Unannounced Visits by Feds" and a healthy debate going on about problems with the laws around these visas.

Reader 'Vincenzo' writes (edited):

This search for fraud misses the REAL problems with the H-1B visa - 1) the "prevailing wage" nonsense and 2) the problems with portability - ie., the difficulties of an H-1B visa beneficiary of changing jobs.

1) Prevailing wage - this is a joke. There are large loopholes in this portion of the H-1B visa laws which allows employers to LEGALLY underpay H-1B beneficiaries. Moreover, it completely goes against the "free market" philosophy so many economists and corporate big-wigs love to parrot. Why not let the market dictate wages?

2) Portability - when an H-1B visa beneficiary becomes unhappy with his current employer, the H-1B visa laws do allow him to change employers, provided that another employer is willing to take over his H-1B visa. However, when an H-1B visa beneficiary does change employers, he has to re-file his Green Card application. So if he's been waiting for three years to get his Green Card, and then changes employers, that three years is completely wasted.

An anonymous reader writes about how the law should change to protect American workers:

Employers should have to actually offer the job to qualified US citizens (at least 10% of all applicants after advertizing the position for 90 days, all applicants if less than 15 applications received) and have all offers declined. Then the H1B visa applicant should be compensated no more than what was offered the US citizens; but the employer should be required to contribute (non-tax-deductable)an amount equal to all compensation, benefits, and travel/living expenses provided to the H1B visa holder to a University in the US that offers a degree that would qualify the degree recipient for the job. This payment to the University should be constrained to paying tuition, books, and fees for US citizen upper division students pursuing a STEM batchelors degree.

Another anonymous reader, who claims to be on the way to getting a green card, talks about some realities faced (edited):

I've been legally in the United States for more than 12 years. My green card is more than 3 years away.

I agree that the system sucks for immigrants. Other than the fact that I don't have job mobility, I am very well paid (almost 200K). I wish i had the option to move if I needed to, but the options available are limited.

The thing is, I pay federal, state and local taxes, social security, unemployment premiums (which I can never collect on) and I'm a participant in the health programs that my employer offers.

All these are a net benefit to all US workers (and me -- sort of) and just perhaps, in eight years or so, I'll be allowed to take the citizenship test.

And on the fraud detection strategies employed by the feds, another anonymous reader writes:

I have about ZERO sympathy for these companies being audited and some being caught abusing the H-1B visas. This has been going on for 15 YEARS; about time someone checked up on them. Sad it takes a recession of this magnitude to move someone to stop abuses of what is nothing more than a cheap labor pool of indentured workers so US companies can continue to live here and benefit from our society while undermining the ability of US workers to make a living. We've let in over 200,000 of these H-1Bs in a single year in the past 15 years or so. England has a similar program (used to be call the "Skilled Migrant Worker Programme"; know how many they typically let in? About 1,000. That spells "SUCKER" for you and me, allowing in nearly a quarter of a million of these people to be:

1) Stuck with their sponsoring company for 6 years (no raises, no bonuses); if they leave they have to find a new company within X days, pay a fine and start their 6 year immigration clock over again.

2) Paid far less than the "prevailing wage" standard (which is itself far too loose as pay can range all over for a given IT job title). This IS the reason these visas are sought - cheaper labor.

As you can tell, the heat of the debate over foreign technology workers is complex, and I thank those readers who offer some real depth and open communication on the issues affecting everyone.

The blatant racial comments, however, really have no place in this debate. The program has its flaws and strengths, but race, in my estimation, is not really part of the equation. Anger at the program is warranted, but not at the people who are trying to do right by themselves and their families.