Skip to comments.US probes misuse of L-1 visas
Posted on 06/03/2003 2:25:18 AM PDT by sarcasm
NEW YORK: American immigration officials are examining whether L-1 visa under which foreign companies can transfer their employees to their branches in the United States is being misused, a media report said.
The issue being assessed is whether companies contracting the employees they bring to US to other companies where they could replace higher paid American jobs constitutes misuse. Should they decide that it does, thousands of workers, a major percentage from India, could be affected.
The assessment by the Bureau of Citizenship and Immigration Services (BCIS) comes close on the heels of a bill moved in the House of Representatives that seeks to prevent companies from hiring foreigners with L-1 visas.
Getting L-1 visa is much easier than H-1B work permit under which the companies are expected to pay minimum wages to the employees. In the three years since the technology bubble bust, the New York Times says the companies are increasingly using L-1 visa to bring the workers to the United States.
The number of workers under L-1 had gone up to 57,700 last year from 41,739 in 1999, the paper reports.
Even as legal experts debate the legality of contracting workers, Congressman John L. Mica, a Republican, who introduced the bill told the paper that "When you have people using this to bring in lower-cost labour to displace Americans, it's something we need to address."
The number of Americans who have been replaced by foreign contract workers is not known but US companies that use contract workers have said that the decision to hire them is based on factors like skills, and not on cost alone.
But a spokesman for BCIS Bill Strassberger was quoted by the Times as saying if this is a company offering the services of their employee to go work for another company, it sounds dubious.
"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," Strassberger said.
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 October 1 unless Congress approves an extension, a move that, the Times says, 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, the paper says, 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.
The Time says 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.
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, the Times added.
It quotes Girish Surendran, a human resources manager who oversees immigration issues at Tata, as saying his company "is committed in letter and spirit to all the requirements and regulations of all visa categories."
"If workers are replaced, it's not that T.C.S. comes in and employees get let go." Surendran said he could not comment on a company's reason for laying workers off.
Wipro, the paper says, plans to lobby against 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," Ramasubbu said.
But trade groups representing American workers say the foreign workers are paid considerably less.
The paper quoted some experts as saying 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 labour market," said Daryl Buffenstein, an immigration lawyer in Atlanta who has corporate clients and is general counsel for the American Immigration Lawyers Association.
but US companies that use contract workers have said that the decision to hire them is based on factors like skills, and not on cost alone.
1. American tech workers are lazy & stupid.
2. American tech workers should compete with Indians, 80 hours a week for $10,000, and be happy with it.
3. Start your own business and stop whining.
4. This is all the fault of taxes and labor unions.
January 6, 2003
L1s Slip Past H-1B Curbs
By Lisa Vaas
Dec. 20 was supposed to be Michael Emmons' D-Day, the day he was to lose his contractor position.
It would have been, had Emmons not quit his post at Siemens AG's Siemens Information and Communication Networks division, in Lake Mary, Fla., on Nov. 22 rather than wait to be replaced by a worker from Tata Consultancy Services holding an L1 visa. Tata is a Mumbai, India, IT services company contracted by Siemens to do, among other things, Emmons' job: connecting Web sites to SAP R3 applications.
The story line is familiar: Large U.S. company outsources work to offshore service provider that uses foreign nationals with temporary work visas to take what could have been domestic IT jobs. What's not familiar to many IT professionals is the L1 visa. Although the L category visa has been around some 50 years, it hasn't received a fraction of the attention the H-1B visa has from legislators, the media and outraged domestic IT workers, many of whom believe companies have given their jobs to lower-paid foreign IT workers brought in on H-1B visas. While many of those resentful workers have attempted to mount political pressure to reduce the number of H-1B visas given each year, no such movement has been mounted against the L1 visa.
In some respects, however, the L1 visa is easier for employers to use than the H-1B. And there's some evidence that use of the L1 visa is rising. The latest figures released by the Immigration and Naturalization Service show that the number of L1 visas granted climbed from 112,124 in 1995 to 294,658 in 2000. But they still haven't caught up to the H-1B numbers: In 1995, 117,574 H-1B visas were granted, compared with 355,605 in 2000.
To IT workers such as Emmons who say they feel they're facing unfair competition from imported workers, statistics mean little. What matters is that they've lost their jobs, they've had to train their replacements and many of those replacements are here on L1 visas.
Although there's little evidence that it is about to overtake the H-1B in terms of numbers granted, the L1 visa has clear advantages for employers. Technically, the L1 is an intracompany transfer visa that allows U.S. companies to import employees from foreign subsidiaries, affiliates or parent companies. One big plus for the L1at least in the eyes of employersis that there's no limit on the number that can be issued each year. H-1Bs are currently limited to 195,000.
Another advantage is that the L1 can be used to import large numbers of workers at one time.
The L1's relative anonymity also works in its favor, experts say. "I have not seen L1 visa use increasing, but I can see why anyone would want an escape route out of the H-1B," said Carl Shusterman, an immigration attorney in Los Angeles. "[The H-1B] is the most overregulated part of immigration law over any visa that exists."
With the L1 visa relatively easy to get, it's not surprising that more domestic IT workers such as Emmons are beginning to worry about competition from companies relying on L1s. What is surprising is that some H-1B holders are also becoming concerned about competition from L1s, according to Norm Petereit, CEO and president of Analysts Express Inc., of Houston, the staffing company through which Emmons was contracting. Analysts Express, like many IT service providers, has seen its business shrink in recent years and, with it, its size. The company, which in 2000 employed 62 contractors, now has 18, 12 of whom are on H-1B visas. According to Petereit, in Stoneham, Mass., even his H-1B consultants live in fear of their contracts ending in this miserable economy, since large consultancies such as Tata can so easily bring in employees from India on L1 visas. "If [Analysts Express consultants'] contracts ended today ... their concern is they'd have difficulty getting a new contract at the prevailing wage," Petereit said.
Unless the L1 program is changed, it's likely many employers will continue to make liberal use of it. Software company Wipro Technologies, a Bangalore, India, division of Wipro Ltd., is a good example of why. According to Laxman Badiga, chief executive of talent transformation and external relations at Wipro, the company can get L1 visa applications approved four to eight weeks faster than it takes to process an H-1B visa. (And, contrary to rumor, Wipro pays the same payroll taxes in the United States on all employees, no matter what visa is involved, Badiga said.)
And that's helped Wipro, and other Indian contract IT services companies, steadily grow despite the down economy. According to Badiga, Wipro recruited about 2,300 workers between April and September last year.
To Wipro, said Badiga, the L1 is just one more tool that's helping the company prosper. To Emmons, however, it's a "nasty tool Congress created to get cheap labor for their corporations." And to a growing number of recession-scarred IT workers, the L1 visa is just one more thing to worry about.
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