Financial services firms that receive federal bailout money will be prohibited from hiring H-1B workers if legislation introduced last night in the U.S. Senate wins adoption.
The bill would bar any recipient of the Troubled Assets Relief Program (TARP), the program being used by the government to purchase some $700 billion of bad mortgage assets, from hiring anyone on an H-1B visa. U.S. Sens. Bernie Sanders (I-Vt.) and Chuck Grassley (R-Iowa) introduced the proposal as an amendment to the massive, $800 billion-plus federal stimulus bill, which is separate from the previously approved bank rescue funds.
"I firmly believe that companies going through layoffs that employ H-1B visas (holding workers) have a moral obligation to protect American workers by putting them first during these difficult times," said Sanders, according to an unofficial transcript of his remarks on the Senate floor.
The argument that Sanders raised for including the restriction in the TARP funding is similar to one that Grassley made to Microsoft in his recent letter to CEO Steve Ballmer. After the company announced plans to cut 5,000 jobs, Grassley told Microsoft that it had a "moral obligation" to give job priority to U.S. workers over foreigners with H-1B visas.
It's unclear what impact this legislation will have if adopted. Financial services firms hire H-1B workers directly, but most of their use of visa-holding workers may be through outsourcing contracts with overseas vendors, an issue not addressed in this legislation.
The Associated Press released the results of an investigation this week which found that a dozen banks receiving bailout funds totaling $150 billion requested 21,800 H-1B visas over the last six years. Those H-1B visas were applied for by the banks, and not the visas used by the service providers.
Indian offshore outsourcing firms attribute as much as 40 percent of their revenues from the financial services sector. Offshore companies use workers on H-1B visas to deliver services in the United States, which may also include transferring some of the work overseas.
Moreover, many financial services have built their own centers in India and elsewhere for IT work and business process services, such as call centers.
Computerworld is an InfoWorld affiliate.