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IMPORTANT!

September 30, 2003
Congress Allows H-1B Limit to Drop - WashTech News
Efforts to Curb Abuses of H-1B and L-1 Visa Programs Stalled - By D. David Beckman
Contact Congress
Let your representatives know that fraud and abuse in the the H-1B program are issues of concern to constituents in their districts, hundreds of thousands of IT workers throughout the United States, and millions of U.S. citizens.

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U.S. white-collar workers besieged by high unemployment achieved a small victory today, as the U.S. Congress allowed the annual limit on new H-1B visas to drop from 195,000 to 65,000 per year. Congress has yet to take action, however, on numerous legislative proposals aimed at addressing loopholes and widespread abuse in professional visa programs.

In 2000, Congress voted to raise for three years the original 65,000 annual limit of H-1B worker visas, in response to a clamor by business leaders who claimed they could not fill critical jobs without importing foreign workers with specialized training.

That was then. Now, a significantly smaller national economy is struggling to recover. Domestic employment numbers continue to languish amid an increasing flow of work offshore, or to foreign workers here on visa programs which a growing number of displaced U.S. workers say are being abused.

Senators on the Judiciary Committee convened in mid-September to hear witnesses such as chip-manufacturing giant Intel argue in favor of raising the annual limit on new H-1B visas, or abolishing the limit altogether. They also discussed whether limits should be imposed on the L-1 visa program, which currently has no annual limits.

John Stedman, a spokesman for the Institute of Electrical and Electronic Engineers, criticized the H-1B program and said the annual cap on the L-1visa program should be “zero.” Steadman argued in favor of allowing the annual visa limit on H-1Bs to sunset back to 65,000 and that the loopholes in the current program must be closed.

Any new action by Congress on the H-1B and L-1 visa programs, however, may be stalled until next year.

"We've received word that the [Senate] immigration subcommittee may end up ducking reform this year," says Jack Martin, special projects director for the Washington D.C.-based Federation for American Immigration Reform (FAIR). "It is very disappointing."

A week before the Senate hearings, FAIR officials presented a report to a group of 65 congressional staffers entitled, "Deleting American Workers: Abuse of the Temporary Worker System in the High Tech Industry."

The 20-page report profiles the history of the programs and documents their failures and abuses, the most damning of which are findings contained in the U.S. Department of Labor's own internal audits. The FAIR report documents how growing numbers of corporations, labor brokers, and immigration attorneys abuse provisions of the H-1B and L-1 visa programs in order to replace American high-tech employees with foreign workers who are willing to work for substantially lower wages.

Problems With H-1B and L-1
The H-1B and L-1 visa programs are intended to allow foreign professionals to work in the United States on a temporary basis to fill job vacancies due to alleged U.S. worker shortages. Critics of the programs, such as Howard Rubin, Bill Clinton's former advisor on technology issues, charge there has never been a domestic worker shortage, and that the programs are abused by companies which replace American workers with foreign workers who lack specialized knowledge or who are willing to work for less. "We don't need H-1Bs anymore," Rubin told InformationWeek last year. "We can replenish staff from our own population."

1. In 2000, the high-tech industry successfully lobbied Congress to raise the limit to 195,000 from FY 2001 through FY 2003. The limit increase is temporary and set to revert to 65,000 Oct. 1, 2003.

2. This requirement, according to the U.S. Department of Labor, is not well-enforced. A Cornell University study found H-1B programmers and engineers were underpaid by 20 to30 percent.

3. Only H-1B dependent firms must attest. “H-1B dependent” is defined as firms whose work force is 15 percent or more H-1Bs -- only about 2 percent of companies that submit H-1B applications.

According to a report by the University of California-San Diego Center for Immigration Studies, there were approximately 710,000 H-1B visa holders in the United States in 2002. That figure includes the 79,100 petitions the government approved last year. H-1B visas are issued for three years, with a possible three-year extension.

L-1 visa holders can stay in the United States for up to seven years. According to the U.S. State Department, the government issued 57,500 L-1 visas last year—more than doubling the number issued in 1995. According to the Bureau of Citizenship and Immigration Services, there are currently more than 325,000 L-1 visa-holders in the United States.

In 1990, Congress established the H-1B visa program to supply U.S. businesses with foreign professional workers because of job vacancies the companies claimed could not be filled with qualified domestic workers. The number of visas was limited to 65,000 each year. The high -tech industry, which employs about 60 percent of H-1B visa holders, convinced lawmakers to increase the annual limit to 115,00 in 1998 and to 195,000 in 2000. Without any congressional action, the limit automatically falls back to 65,000 in October 2003.

A decade later, the Labor Department's Inspector General reported to Congress that it continued to identify cases of fraud in the H-1B program, such as fictitious filings on behalf of real corporations without the knowledge or permission of corporate officials. Labor Department officials also say increasing numbers of immigration attorneys and labor brokers file fraudulent applications on behalf of aliens each year.

Companies who seek to employ foreign workers under H-1B provisions must file an application with the Labor Department for each foreign worker they want to employ. If the department then issues a labor certification, the employer can submit a petition to the Citizenship and Immigration Bureau with an application fee of $130 and an additional fee of $1,000. If the bureau approves the petition, it is sent either to a consular office abroad or an immigration office, depending on whether the applicant is seeking a visa or looking to alter the status of a current visa.

Many U.S. politicians contend that the H-1B program has provisions stipulating that qualified U.S. workers will not be displaced by H-1B workers. The law that regulates the H-1B visa program, however, requires only a small fraction of employers, called "H-1B-dependent employers," to give priority to qualified U.S. workers. Only about 2 percent of all employers that use H-1B visas fall into this category. A 1998 revision of the law requires H-1B-dependent employers, defined as those whose staff comprises 15 percent or more of H-1B workers, to attest that they first sought out qualified U.S. applicants before hiring foreign workers with H-1B visas. But nothing in the law requires those companies to actually hire U.S. workers.

Several studies also show that prevailing wage provisions outlined in the H-1B legislation are often not met. A 1994 UCLA study found that H-1B engineers were paid 33 percent less than their U.S. counterparts. Those who hope to be sponsored for permanent immigration status are loath to complain about lower wages or extended work hours, another study found. The Labor Department itself found that wage provisions under H-1B could not be enforced due to a lack of resources. The department's role in processing labor condition applications amounts to little more than "rubber stamping," an internal audit found.

Proposed Reform Measures
This year, five bills have been introduced in Congress seeking to reform the H-1B or L-1 visa programs. Three of the sponsors of these bills are Connecticut lawmakers who have come under pressure from members of a workers advocacy group called The Organization for the Rights of American Workers (TORAW), based in Meriden, Conn.

Legislative Proposals
Bill: H.R. 2154
Sponsor: Rep. John Mica (R-Fla.)
Proposes: Prevents an employer from placing a non-immigrant L-1 visa worker with another employer.
Bill: H.R. 2688
Sponsor: Rep. Tom Tancredo (R-Colo.)
Proposes: Outright repeal of the H-1B visa.
Bill: H.R. 2702
Sponsor: Rep. Rosa DeLauro (D-Conn.)
Proposes: Limit the number of L-1 visas to 35,000 per year; eliminate blanket petitions; must be paid prevailing wage; cannot be hired during a strike or lockout; no displacement of U.S. workers 180 days before or after being hired and employee must have been employed for two years instead of the current six months.

Bill: H.R. 2849
Sponsor: Rep. Nancy Johnson (R-Conn.)
Proposes: L-1 visas -- Prevents an employer from placing a non-immigrant L-1 visa worker with another employer; must be paid greater of actual or prevailing wage; no displacement of U.S. workers 180 days before or after being hired; length of stay reduced. H-1B visas -- return annual cap to 65,000; 90 day lay-off changed to 180 days. Eliminate the "H1-B-dependent" threshold.

Bill: S 1452
Sponsor: Sen. Christopher Dodd (D-Conn.)
Proposes: Mirror bill to Rep. Nancy Johnson's H.R. 2849 above.
Bill: S 1635
Sponsor: Sen. Saxby Chambliss (R-Ga.)
Proposes: Homeland Security to track the number of L-1 visas issued for specialized skills. Reinstate the one-year prior employment and no placement at third-party work site provisions.

Source: The Organization for the Rights of American Workers
Rep. Rosa DeLauro (D-Conn) introduced the "L-1 Non-Immigration Reform Act" in June of this year, aiming to close loopholes in immigration law and halt the practice of replacing American workers with lower-cost foreign labor. The DeLauro bill would place an annual cap of 35,000 on L-1 visas, ban so-called blanket petitions, and prohibit any company from hiring foreign workers under the L-1 program if the company has laid off American workers six months prior to or six months after an application is filed. The bill would also require businesses to pay L-1 workers a prevailing wage. L-1 guest workers would be required to be full-time employees of the petitioning company for the previous three years.

DeLauro spokeswoman Lesley Sillaman concedes that little action on L-1 reform measures will occur before the end of the year. Lawmakers are eager to pass appropriations bills before the end of the year, she says. She rates the odds as good, however, that a reform bill can be passed before the end of the current legislative session, which ends in November 2004.

Sillaman says DeLauro has received calls of encouragement from unemployed tech workers around the country. "We certainly are hoping that in January we can start back up again," she says.

Two Connecticut House Republicans, Rep. Nancy Johnson and Rep. Rob Simmons, have joined Connecticut Sen. Christopher J. Dodd, a Democrat, in sponsoring the "USA Jobs Protection Act of 2003."

The measure includes the same provisions as the DeLauro bill, but seeks to permanently cap the number of new H-1B visas that may be issued each year at 65,000. It would also prohibit the replacement of striking employees with H-1B workers, and reduce the time an L-1 worker can remain in the United States to three years. Should the bill become law, it currently contains a mandate that the General Accounting Office, the investigative arm of the U.S. Congress, look into its "implementation and impact."

Yet another measure seeking to alter the H-1B program is Colorado Republican Tom Tancredo's bill entitled the "High-tech Work Fairness and Economic Stimulus Act of 2001." Tancredo also wants to limit the total number of annual visas to 65,000, which is the original ceiling. It would also reduce that number in increments of 10,000 for every quarter-point that the national unemployment rate exceeds 6 percent. The measure, first introduced in 2001, has been referred to the House Judiciary Committee.

Repercussions for the U.S. Economy
Meanwhile, the U.S. economy continues to confound the experts and betray the prognosticators who have predicted better times ahead, only to watch it languish. After the latest Labor Department report released last week showed that while American businesses are showing signs of modest growth, they continue to hemorrhage jobs.

A Labor Department report released the first week in September showed that employers trimmed 93,000 jobs from payrolls during the month of August.

"We have simply seen the tip of the iceberg," Wells Fargo chief economist Sung Won Sohn said in a press release last week. "I think it will get worse, not better."

Alan Tonelson, a research fellow for the Washington D.C-based United States Business and Industry Council and author of "The Race to the Bottom," says the recent trend by large U.S. companies of outsourcing labor offshore and replacing domestic workers with imported ones is partially responsible for the "jobless recovery." Tonelson predicts the trend, which has come about as U.S. corporations face pressure to improve their bottom lines, will cause substantial damage to the U.S. economy and devastate the American middle class.

"Technology firms are trying to trim costs every way they can," says Tonelson, because demand for their products is not rising. On the other hand, Wall Street revenue reports show profitability of most of the major high-tech companies is rising reasonably well, he says.

"But it's only because companies are reducing bottom-line costs by hiring foreign labor to supply their markets, And it is critical to underscore that the main, final market for these technology products is the United States " says Tonelson. "So their view is, ‘If we can do this, why not?' "

That strategy, in Tonelson's view, is doomed to fail.

"If we strip the American workforce of the best-paying jobs most people can realistically hope to win, then I don't understand how we can maintain our current levels of consumption," Tonelson says.

Without those levels of consumption, American companies loose money. With the onset of greater globalization and NAFTA-style trade agreements, Tonelson says the most likely scenario for the U.S. economy is growing trade deficits and debt piling ever higher.

"I see American industries continuing to lose market share," he says. "I see a great big American economic bubble bursting and damaging not only the American economy, but the rest of the world, which has been heavily reliant on U.S. markets."

Displaced Tech Worker Runs for Congress
The account of how former Florida programmer Mike Emmons lost his job late last year has become all too typical. How he responded to it is not.

Emmons, then a Siemens ICN contractor from Lake Mary, Fla., was notified last June that all 20 of the IT jobs in his former office would soon be outsourced. Weeks later Tata Consulting Services sent a group of Indian consultants to the Florida office to be trained to take over the U.S. workers' jobs. Each of the Americans was offered severance packages as high as $13,000 if they would stay on to train their replacements.

Emmons claims that some of the consultants had received only two weeks preparation before their arrival, which seemed to violate the provisions of the L-1 visas under which they were allowed to come to the U.S. to work. According to the L-1 visa program's provisions, it was intended for executives, managers, and workers who possess "specialized knowledge" of the work that foreign workers are typically brought in to do. That troubled then-senior systems analyst Pat Fluno, who contacted Congressman John Mica, her U.S. representative, to voice her objections.

That's when Emmons decided to call Mica's office — which he says he then did almost every day.

Mica eventually phoned Emmons back and assured him he would look into the issue, and as promised, the congressman did promise to send a letter outlining the plight of the former Siemens employees to Labor Secretary Elaine Chao.

But weeks went by and nothing happened. Emmons says neither Mica nor his staff returned his calls. Emmons then discovered that Mica had received a series of campaign donations from Siemens between May 2003 and November 2003 totaling $4,999.

"I couldn't believe it," Emmons says. "I was livid." He says something in him clicked, and he knew what he had to do.

Emmons says he began to step up his barrage of letters and emails to Mica's offices. Then he went to the media. Last February, Orlando's Channel 6 television news produced a series on Florida workers who had lost their jobs to cheaper foreign labor.

Finally, Emmons announced that he was running for Congress in Florida's District 7—Rep. John Mica's seat.

Emmons developed a web site where he posts the now infamous letters and emails he sent to Mica and Siemens officials, some of whom have threatened to sue him.

Later this summer, Mica introduced a bill that promises to more closely regulate the L-1 visa program. The measure proposes to end "body shop" importers by requiring companies to be allowed to transfer only full-time employees that possess "specialized knowledge" to the United States.

"The bill is Swiss cheese," Emmons says. The legislation contains a loophole, claims Emmons, that would allow a U.S. company to open an office in another country, then transfer foreign employees to the United States on the L-1 visa program to replace higher-cost American workers, circumventing Mica’s proposed requirement that would prohibit only third-party foreign "body shops" from replacing American workers.