Bodyshops Aren't Sweating L-1 "protections"
Bodyshops Aren't Sweating L-1 "protections"
Date: Monday, December 06, 2004 1:43 AM
JOB DESTRUCTION NEWSLETTER
December 06, 2004. No. 1154
News articles are appearing all over the United States that hype the
L-1 provisions in the omnibus spending bill that Bush will soon sign.
Most of these articles ballyhoo new protections that that make it
illegal to subcontract L-1 visa holders to third parties. The
protections aren't there and yet many engineering associations are
hailing his flimflam legislation as some sort of breakthrough for
American workers.
Here is a typical statement that seems to making the rounds of our
gullible newspapers:
An immigration reform measure quietly passed by Congress
could sharply limit how Indian offshoring companies use
low-wage technology workers on temporary visas in the
United States.
Indian newspapers understand that it will be business as usual once the
bill is passed.
However, in what comes as good news for the Indian
tech sector, the US Congress opted to base its
visa reform on the less stringent Chambliss/Mica Bill.
Both these Bills make only cosmetic changes to the
programme, as observers put it, "Republicans and Democrats
would rather support Mr Micas Bill since it wont
change anything of importance."
The reason the Indian techies are so happy that the omnibus bill
incorporated the Chambliss/Mica legislation is that nothing will
change. The bodyshops will still be able to import unlimited numbers of
L-1 visa holders into the U.S. to replace American workers. Protections
that are supposedly in the bill are nothing but a ruse to appease an
American public that is concerned with the rapid job destruction that
is epidemic across the nation.
If L-1 visa restrictions were meant to reel in the Indian
tech sector, then it is clearly not biting the big fish.
Tech majors are confident that the provisions of the
Omnibus Appropiations Bill will not cramp their style.
Once again our Congress is seen as a bunch of fools by the rest of the
world. The reason the Indian techies feel so fortunate is that unlike
the Chambliss bill, the DeLauro bill actually did something to control
L-1. They can breathe a sigh of relief that all we got is the
Sham-bliss charade.
The DeLauro and Johnson-Dodd Bills sought to introduce
greater control in the L-1 visa programme through an
annual cap, greater supervision by the US Department of
Labor, abolition of blanket L-1s and stringent qualifying
requirements for applicants.
However, in what comes as good news for the Indian tech
sector, the US Congress opted to base its visa reform on
the less stringent Chambliss/Mica Bill. Both these Bills
make only cosmetic changes to the programme, as observers
put it, "Republicans and Democrats would rather support
Mr Micas Bill since it wont change anything of importance."
Material Used for this Newsletter
http://economictimes.indiatimes.com/articleshow/947633.cms
L-1 Bill doesn't bother tech majors
http://economictimes.indiatimes.com/articleshow/943778.cms
Curbs on L-1 hit Indian tech firms
Letter to the Editor of ILW
http://www.ilw.com/immigrants/weekly/
http://www.miami.com/mld/miamiherald/news/local/10292005.htm?1c
Visa legislation would impose restrictions on foreign workers
http://www.vvdailypress.com/2004/110182259428429.html
OUR OPINION: Make foreign visa programs work for America
http://www.montereyherald.com/mld/montereyherald/news/10276394.htm
Legislation closes visa loophole
http://economictimes.indiatimes.com/articleshow/947633.cms
The Economic Times Online
L-1 Bill doesn't bother tech majors
PRAGATI VERMA & URMI A GOSWAMI
TIMES NEWS NETWORK[ MONDAY, DECEMBER 06, 2004 02:05:03 AM]
NEW DELHI: If L-1 visa restrictions were meant to reel in the Indian
tech sector, then it is clearly not biting the big fish. Tech majors
are confident that the provisions of the Omnibus Appropiations Bill
will not cramp their style.
This despite L-1 visas accounting for about 60% of the visas obtained
by tech majors like Wipro, TCS and Satyam. However, the Bill which US
President George W Bush will sign any day now could give sleepless
nights to consulting firms who recruit, retain and relocate
professionals from India and then bench them in the US until they find
a project. Clearly, it is a case of too little action and too late by
Uncle Sam.
The provisions relating to the L-1 visa in the 2005 Appropiations Bill
is being seen as relatively toothless in Indian software circles.
The only restriction it imposes is to have employees transferred to the
US under the companys authority even as they are free to work on
clients premises, point out insiders.
Analysts feel that nothing lesser than a complete ban on working on
clients premises will impact the software bigwigs business model.
"We will continue to have our people working on L1 visas as earlier
under our authority," says Mr Laksham Badiga, chief executive, talent
transformation and staffing, Wipro Technologies. Wipro has 3,600 L-1
visas compared to only 2,600 H1Bs. The only possible dampner would have
been a cap on the number of the intra-company transfer L1 visas.
This is a feeling that has been previously voiced by Washington
insiders as well. Though the provisions relating to the L-1 visa are
based on Senator Saxby Chambliss Bill, it also has echoes of
Representative John Micas Bill, as against Representative Rosa
DeLauros L-1 Non-immigrant Reform Act, Representative Nancy Johnson
and Senator Chris Dodds parallel Bills, The USA Jobs Protection Act
of 2003.
The DeLauro and Johnson-Dodd Bills sought to introduce greater control
in the L-1 visa programme through an annual cap, greater supervision by
the US Department of Labor, abolition of blanket L-1s and stringent
qualifying requirements for applicants.
However, in what comes as good news for the Indian tech sector, the US
Congress opted to base its visa reform on the less stringent
Chambliss/Mica Bill. Both these Bills make only cosmetic changes to the
programme, as observers put it, "Republicans and Democrats would rather
support Mr Micas Bill since it wont change anything of
importance."
Given that the reform is only skin deep, big companies are
not worried. Big players like Infosys, Wipro, TCS and Satyam who have
come under fire previously for allegedly violating the provisions of
the programme have little to worry. They have people working on
customers sites under their companys supervision.
It is only the bodyshopping kind of organisations who need to worry
about it. This contract industry in the US is run predominantly by
Indian consulting firms who are sponsors but are not the actual users
of the skilled workers.
The L-1 visa was created by an Act of the Congress in 1970. The
specific objective of this non-immigrant visa was to make it simpler
for large international companies to transfer foreign personnel to the
US.
The L-1 visa allows transfer of key employees, generally executives or
managers, from a foreign corporation to a US branch, parent/subsidiary
or affiliated entity. In the past this programme hadnt captured the
imagination of the
American legislators, media and outraged domestic IT workers. However,
growing unemployment and slow recovery of the tech sector brought the
L-1 visa to the centre of the storm.
Last year, of the 57,245 L-1 visas that were granted, nearly one-third
went to Indian nationals. The number of new L-1 visas has gone up by
50% between 1998 and 2002. According to the US State Department, the
period October 1, 2002 to February 28, 2003 saw a 10% increase in L-1
visas.
In 2002, 57,721 L-1 visas were issued to workers, the figure goes up to
314,000 if one counts relatives of the workers. In the first six months
of 2003, L-1 visas registered a 7% increase over the same period in
2002. These numbers have helped create a notion that "foreign workers
are displacing American citizens and permanent residents from the work
place."
http://economictimes.indiatimes.com/articleshow/943778.cms
Curbs on L-1 hit Indian tech firms
INDIAWEST[ THURSDAY, DECEMBER 02, 2004 02:42:25 PM]
Indian software firms that have increasingly used the L-1 visa to make
up for the fewer H-1B visas available will no longer be able to deploy
foreign workers to work under sub-contractors or at client locations.
The new curb on the L-1 visas-which allow corporate transfers of
employees to work in the US-was included in a massive spending bill
passed last month that also authorized 20,000 additional H-1B visas for
foreign students gaining master's or doctorate degrees from U.S.
universities.
The new legislation, which President Bush is expected to sign soon,
would require companies to keep L-1 visa holders under their direct
management control when working with a customer, the San Jose Mercury
News reported.
The tightening of the L-1 visa follows increased criticism of its
alleged abuse by offshoring firms. Immigrant and labor groups have
accused the firms of using it to bring in workers at a fraction of the
salaries their U.S. counterparts receive.
Unlike the H-1B visas, which require matching salaries, the L visas do
not require Department of Labor approval. Also, the L-1 visa is not
subject to any limits.
The new curbs will make it more difficult for offshoring firms to
dispatch manpower to client locations, according to Greg Siskind, an
immigration attorney in Memphis who advises L-1 employers.
The L-1 was not being used properly by these companies'' when they
put workers at customer facilities, he told the Mercury News.
However, Victor Chayat, a Tata Consultancy Services spokesman, said the
legislation would not affect Tata's operations in the United States
because the company is already in compliance with the regulations, the
report said.
``We're providing software development projects to our customers, not
bodies,'' he said.
Two years ago, workers brought from India on L-1 visas by TCS were at
the center of a row at a Siemens unit. The German multinational forced
its American employees to train the Indian workers, threatening them
with the loss of severance packages.
TCS is reportedly one of the heaviest users of the L-1 visa. It had
about 4,700 L-1 and 2,600 H-1B workers in the United States at the end
of March, according to Chayat.
The curbs on L-1 visas have been applauded by the National Association
of Computer Consultant Businesses, a Washington, D.C., trade group. But
advocates of more stringent reform contend the measure doesn't go far
enough because there is no limit on the number of L-1 visas that can be
approved, and there is scant oversight of how the visas are being used,
the Mercury News said.
Last year, 57,245 L-1 visas were granted -- nearly one-third of them to
Indian nationals.
http://www.ilw.com/immigrants/weekly/
Letters
Send your letters to weeklyeditor@ilw.com.
Dear Editor:
I found Gregory Siskind's roundup of the new H-1B/L-1 legislation in
the omnibus spending bill to be informative but he didn't spend enough
time discussing the requirement that makes it illegal to subcontract
L-1 visa holders to third parties. This requirement is merely a
cut-and-paste from the mostly worthless L-1 reform bill by Sen.
Chambliss. Assuming that the USCIS would actually enforce this
requirement it would be very easy for bodyshops such as Tata to get
around this just by setting up an office within a company where the
work is done. For instance, all they would have to do at Siemens is to
set up an office on the company site where the work is being done. This
is the simplest form of outsourcing and is quite common in high-tech
industries. Using IBM as an example, they will set up separate office
space within a company such as Honeywell to house IBM workers. Using
the outsourcing model it will be easy for Indian bodyshops to subvert
this regulation and it will be very difficult to enforce. Once again,
Congress is offering "feel-good" legislation instead of something that
protects the beleaguered American workforce from being replaced with
cheap foreign labor.
Rob Sanchez
Go to this link for Siskind's paper:
http://www.ilw.com/lawyers/articles/2004,1129-siskind.shtm
http://www.miami.com/mld/miamiherald/news/local/10292005.htm?1c
Posted on Mon, Nov. 29, 2004
VISA CHANGES
Visa legislation would impose restrictions on foreign workers
The omnibus spending bill recently passed by Congress contains changes
to a little known business visa for foreign executives and specialized
employees of multinational companies that have offices here or abroad.
The visa, known as L-1, is reserved for certain foreign managers and
skilled workers being transferred to the United States from abroad.
For example, a manager in a main office in Caracas, Venezuela,
affiliated to a company subsidiary in Miami can qualify for an L-1 if
he or she is reassigned to perform duties here.
Among changes in the bill:
L-1 visa holders will no longer be authorized to work at ''off-site
locations'' if those work centers are not controlled and supervised by
branch offices of the main company.
L-1 applicants also will no longer qualify for visas if they have
worked for the company less than a year.
Changes were brought about due to abuse of L-1s. Some companies
allegedly used the visa as a way to outsource jobs of American citizens
or green card holders to lower-paid foreign employees.
The bill needs to be signed by President Bush to become law.
http://www.vvdailypress.com/2004/110182259428429.html
Tuesday, November 30, 2004
OUR OPINION: Make foreign visa programs work for America
The decision by Congress to allow 20,000 additional highly skilled
immigrants into the Untied States this year is an important step toward
shoring up America's competitiveness.
But equally important was Congress' acknowledgment that the two
programs for skilled workers, the H-1B and L-1 visas, are broken.
A bill to fix the programs, which passed Saturday, is a good first
step. But it's unclear whether it will be sufficient to stamp out the
abuse of the programs, which hurts both the companies who attempt to
make legitimate use of the visas and the American workers who end up
unfairly displaced by immigrant workers.
The two programs are different. The L-1 visa was designed to allow
multinational companies to temporarily transfer to the United States
workers who have specific knowledge of company products, services or
operations. The H-1B is meant to bring in highly skilled foreigners for
jobs that cannot be filled by American workers.
The worst abuse
The worst abuse occurs with the L-1 visa, which some companies use to
turn themselves into international temp agencies. These companies
import tech workers with generic skills, pay them below-market wages
and outsource them to other companies for specific projects.
At a time when American tech workers are being displaced by offshoring,
this "onshoring" of low-wage workers is unconscionable. The bill seeks
to remedy the problem mainly by restricting the outsourcing of L-1 visa
holders to third parties.
The situation with the H-1B visa is more murky. Many tech companies use
the visa legitimately, hiring highly skilled workers whose presence
here has helped build America's technology leadership.
Monitoring employers first
But there's mounting evidence that some employers misuse the visa to
cut labor costs. They bring in workers whose skills are commonplace and
pay them below-market wages. The government has done little to enforce
a requirement that H-1B workers be paid a "prevailing wage."
Every time an undeserving worker gets a visa, a deserving immigrant is
shut out. That's because only 65,000 H-1B visas are issued each year.
This year, the visa cap was reached on the first day of the fiscal
year.
The bill permitted an additional 20,000 foreigners with post-graduate
degrees from American universities to stay in the country. Forcing
these talented individuals - many of whom have been educated at
taxpayers' expense - to go home makes no sense.
Two other measures in the bill should help. One forces the government
to collect more data on how the visas are used, while the other
strengthens its power to police abuse.
But Congress cannot consider its work done. It must use its oversight
authority to closely monitor the visa programs and be ready to act if
abuses persist.
http://www.montereyherald.com/mld/montereyherald/news/10276394.htm
Posted on Fri, Nov. 26, 2004
Legislation closes visa loophole
Knight Ridder Newspapers
An immigration reform measure quietly passed by Congress could sharply
limit how Indian offshoring companies use low-wage technology workers
on temporary visas in the United States.
The little-noticed legislation, tucked in a massive spending bill
passed Saturday, would close a loophole in regulations for the L-1
visa, which is intended to allow foreign firms to transfer managers and
employees with specialized knowledge to their offices in the United
States.
Critics of the offshoring industry say that L-1 visas are used far more
broadly and are being exploited to evade caps on the H-1B visa program
for admitting temporary skilled workers. Last year, 57,245 L-1 visas
were granted -- nearly one-third of them to Indian nationals.
The H-1B visa program, which helped provide workers for much of Silicon
Valley's tech boom, has been controversial. Some tech workers and
political leaders argue that the visas make it too easy for low-paid
foreign workers to replace highly paid Americans in software
programming and other skilled tech jobs.
Under political pressure from the critics, the annual quota for H-1B
visas has been reduced to 65,000 in recent years -- not nearly enough
to meet new demands from the offshoring industry. In response, India's
largest software contractors have dramatically increased their reliance
on L-1 visas. L-1 visas issued to Indian nationals increased by nearly
eight times between 1998 and 2003, according to the State Department.
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