Skip to comments.Special Visa's Use for Tech Workers Is Challenged
Posted on 05/30/2003 8:52:01 PM PDT by liberalnot
Special Visa's Use for Tech Workers Is Challenged
Richard L. Harbus for The New York Times A flier from the Organization for the Rights of American Workers, which wants to restrict visas that allow companies to transfer workers to the United States.
By KATIE HAFNER and DANIEL PREYSMAN
AN FRANCISCO, May 29 With the economy in a slump, a growing number of American technology workers say their jobs are going not only to lower-cost foreign workers abroad, but also increasingly to workers who enter the United States under a little-known visa category known as L-1.
In the nearly three years since the technology bubble burst, the use of L-1 visas to bring in workers with a large percentage from India has become a popular strategy among firms seeking to cut labor costs. The number of these temporary visas granted rose nearly 40 percent to 57,700 in 2002 from 41,739 in 1999.
The visas are intended to allow companies to transfer employees from a foreign branch or subsidiary to company offices in the United States. But they are now routinely used by companies based in India and elsewhere to bring their workers into the United States and then contract them out to American companies in many instances to be replacements for American workers. The number of Americans who have been replaced by foreign contract workers is unknown. American companies that use contract workers have said that the decision to do so is based on factors like skills, and not on cost alone.
Some immigration experts are questioning the legality of this use of the visa. Officials at the Bureau of Citizenship and Immigration Services, or B.C.I.S., a division of the Department of Homeland Security that oversees the granting of L-1 and other work visas, say the bureau is conducting an assessment of the L-1 visa to determine whether there is misuse.
"If this is a company offering the services of their employee to go work for another company, it sounds dubious," said Bill Strassberger, a spokesman for B.C.I.S.
"To bring someone in ostensibly as an intracompany transfer and then put him to work for somebody else and then to say that we're paying him still, that just sounds like someone's trying to really stretch the envelope on that visa category," Mr. Strassberger said.
The legal questions, however, remain murky. Steve Yale-Loehr, who teaches immigration law at Cornell, said that strictly speaking, what these companies are doing is legal, though perhaps not what Congress intended. However, Mr. Yale-Loehr added, "If Congress is upset about this, then Congress will act on it."
In response to the controversy, Rep. John L. Mica, a Republican from Florida, introduced a bill this month to prevent companies from hiring foreigners with L-1 visas.
"When you have people using this to bring in lower-cost labor to displace Americans, it's something we need to address," Mr. Mica said in a telephone interview.
During the boom years, the technology industries successfully lobbied Congress to expand the number of foreign software engineers who could be permitted to fill programming needs in the United States. In 2000, Congress increased the annual cap on more restrictive temporary visas known as H-1B visas for highly skilled foreign workers to 195,000 from 115,000. That quota will drop automatically to 65,000 on Oct. 1 unless Congress approves an extension, a move that is considered unlikely.
In the last two years, the trend in the use of H-1B visas has declined sharply. Many experts say the use of L-1 visas will grow.
Unlike the H-1B visa, the L-1 does not require employers to pay workers prevailing wages. In addition, there is no cap on the number of L-1 visas.
This has ignited an outcry among technology workers who have lost jobs and say that foreign contract workers are paid substantially less than prevailing wages in the industry.
Over the last three years, William O'Neill has seen his small computer consulting firm in East Granby, Conn., dwindle from six contract workers to none. The work itself has not disappeared, said Mr. O'Neill, but his clients, most of them large insurance companies in Connecticut and western Massachusetts, are turning to foreign companies, some with workers who are in the United States on temporary visas. Satyam Computer Services, a consulting firm based in India, for example, now has a contract with the Cigna Corporation that has around 100 Satyam employees working on computer applications management in Cigna offices.
And as others have claimed, Mr. O'Neill said that in many cases, existing technology employees are asked to train their replacements. The L-1 visa requires that the foreign workers possess specialized knowledge of the work to be done.
Mr. O'Neill said that the people he knows who are currently training their replacements will not talk about their situation for fear of losing what is left of their jobs. "They're scared to death they're going to lose their jobs instantly versus six or eight or nine months down the road," he said.
Once the replacement workers are trained, Mr. O'Neill said, the foreign workers are often sent back to India to do programming and computer work there for the American companies.
Wipro, InfoSys and Tata Consultancy Services, all of them based in India, are other companies that are using L-1 visas to get workers into the United States.
Girish Surendran, a human resources manager who oversees immigration issues at Tata, said his company "is committed in letter and spirit to all the requirements and regulations of all visa categories." He added: "If workers are replaced, it's not that T.C.S. comes in and employees get let go." Mr. Surendran said he could not comment on a company's reason for laying workers off.
Wipro plans to lobby against Mr. Mica's bill. If it becomes law, said Sridhar Ramasubbu, investor relations manager at Wipro, the company will simply turn back to H1-B visas. "We will not be affected financially because our compensation is the same whether somebody comes in under an H-1 or an L-1," Mr. Ramasubbu said.
But trade groups representing American workers say the foreign workers are paid considerably less. "I have friends that were told in the last three months that they must take a $30,000 pay cut to keep their job," said John Bauman, president of the Organization for the Rights of American Workers, a nonprofit group based in Meriden, Conn.
Gary Burns, the legislative director for Mr. Mica, said there were about 325,000 L-1 visa holders in the United States. Those who stay in this country can remain for up to five or seven years, depending on the category of L-1 they hold.
Some experts say that the use of L-1 visas for contract workers is not widespread and that fears of losing jobs to foreign workers are exaggerated.
"Even if this brouhaha is about a real problem, I think when you look at the number of workers involved, it is a totally insignificant drop in a massive labor market," said Daryl Buffenstein, a immigration lawyer in Atlanta who has corporate clients and is general counsel for the American Immigration Lawyers Association.
Mr. Buffenstein said that those who oppose the L-1 visa do not understand how important it is for American industry. "It will hurt employment in the United States if we impede the ability of legitimate users to transfer managers and specialists between different affiliates of international organizations," said Mr. Buffenstein, a lawyer who advised legislators on the law governing L-1 visas.
Mr. Buffenstein said he was also worried that public overreaction would result in measures like the Mica bill, which he contended would go too far in restricting international companies from using L-1 visa holders to do on-site client work.
Controversy over the visa, which has been in existence for 33 years, is not entirely new. Three years ago, the General Accounting Office reported that the the Immigration and Naturalization Services, the precursor to B.C.I.S., had found a high incidence of fraudulent use of L-1 visas and had called abuse of the visas "the new wave in alien smuggling."
But protest over the use of temporary foreign workers has become more vocal in a rocky economy. One 57-year-old computer consultant in Avon, Conn., who has been out of work for five months said, "This isn't just an I.T. issue," referring to the information technology industry.
"It's a big issue with multiple professions, and has a serious effect on the economy," said the consultant, who asked that his name not be used for fear of jeopardizing his chances to find work. "A lot of this is about the economy and the L-1 issue is just exacerbating the problem."
The Visa Count
The L-1 visa does not require the worker to pay taxes