October 08, 2009

H-1B visas: A mess that could get even worse

Our broken visa system is bad for U.S. IT workers and the guest workers who are misled, underpaid, and exploited

It's bad enough that American workers are losing jobs to foreign labor imported via the broken H-1B visa system. Now there's even more evidence that unscrupulous companies are exploiting the hopes and labor of foreign workers who obtained those visas as they searched for better jobs and better lives.

Two of those workers, an MBA student named Vimal Patel and an Indian software programmer Prasad Nair, were featured in an investigative story on the H-1B mess in the current issue of BusinessWeek. Their stories have a lot of complications, and Patel -- who wound up working at a gas station -- apparently committed a relatively minor violation of the law. But those young men and many others paid thousands of dollars to companies that promised them jobs that ultimately didn't materialize or turned out to be for significantly less money than they had been led to expect.

[ InfoWorld's Bill Snyder argues why the H-1B visa has got to go. ]

Aside from humanitarian concerns, is there a reason why you should care about these guys? There is. With layoffs continuing to decimate the technology industry -- about 100,000 IT workers lost their jobs in the last 12 months -- employers can still bring in as many as 85,000 H-1B workers, including 20,000 who hold advanced degrees from U.S. universities. And now some of the outsourcers are preparing to move jobs to Mexico if visa regulations get tighter. The system works against U.S. workers, and it leaves plenty of room to exploit foreign workers. It's broken and needs to be fixed.

Visa fraud rate of 20 percent
The cases of Patel and Nair mirror a pattern of lawbreaking and exploitation by employers uncovered last year by the U.S. Citizenship and Immigration Services (USCIS). Indeed, the agency found evidence of fraud or other violations in 20 percent of H-1B visa petitions.

The Justice Department took notice and brought suit against a number of companies, including Vision Systems Group, Cognizant Technology, and Patni Computer Systems.

Sen. Charles Grassley (R-Iowa) has been one of Washington's most outspoken critics of the H-1B visa. In a letter last week to USCIS director Alejandro Mayorkas, Grassley said the agency should be asking "companies up front for evidence that H-1B visa holders actually have a job awaiting them in the U.S.," so they will not end up being "benched," or unpaid until work is found.

"Employers need to be held accountable so that foreign workers are not flooding the market, depressing wages, and taking jobs from qualified Americans. Asking the right questions and requesting the necessary documents will go a long way in getting out the fraud in the H-1B program," Grassley wrote.

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drdam4n 8-Oct-09 12:35pm
1 reply
I guess legally or illegally, Americans are going to lose their jobs. Go America!!! Land of the...jobless and broke.
Bobo 8-Oct-09 9:46pm

According to a report published yesterday, America's manufacturing sector is still the largest in the world and 1/3 bigger than China's. So much for the theory that all the jobs are going overseas. Jealous Indians love to hype India, Inc. but the reality is they have never produced one new product or industry that anyone has ever heard of. Where is the Indian operating system? Where is the Microsoft or Apple of India? They don't exist. Indians can't stand to see Americans employed and that is why they keep saying Americans are out of work. Rather the country with the highest poverty and jobless rate is India.

perlstar 8-Oct-09 12:42pm
1 reply
It's nice to see an article in an IT industry publication that doesn't say "rah, rah, we need more H-1Bs to survive", the company party line. Of course, now, in 2009, it is obvious that there are hundreds of unemployed IT workers for every IT job opening, but there have always been some. Even just before Y2K or the height of the high tech bubble. But if Bill Gates says we need more H-1Bs, it somehow carries much more weight than if 1000 unemployed programmers say we don't.
Bobo 8-Oct-09 9:48pm
There was no "tech bubble". That was a normal functioning economy that has been disrupted by 4-7 million imported guest workers from India who cleaned out all the companies while not producing anything. The "bubble" would have gone on forever if we hadn't imported all these workers. And they've had over a decade to create another economic boom but the opposite has happened. Where is the innovation?
mysticturner 8-Oct-09 12:51pm
There are two changes that could correct the abuses of the system and they really don't cost the government much, if anything. If companies really can't get skilled workers for a position then they shouldn't mind paying the going rate for a H-1B worker. So put into the paperwork that the immigrant must receive and sign, a document that states that if they can show that they are being paid less than 95% of the going rate for thier job function, they are entitled to a non-negotiable penalty, paid by thier employer of 300% of thier annual salary. The state employment agencies know what we get paid and can publish a pretty good average number. This way, the government isn't the watchdog, the employee is. Toss in a few attorneys who take a third for themselves, poof - self regulating. And second, if an automatic cutback in H-1B visa issuance should be tied to the unemployment rate of US Residents who are technical workers. And these visas should be revokable upon the same criteria (FIFO basis). Unemployment rate goes up. No new visas. Rate goes up some more, visas start to get revoked for the workers who have been here the longest. The spirit of this program is to help American companies through boom times (like the '90s). But even back then, it was being used to convert to lower paid staff. And now it is being used in a way that is keeping US residents on unemployment and thus slowing down the economic recovery.
mredski 8-Oct-09 1:46pm
1 reply
Osama Bin Laden said he would bleed this country dry, and with the help of Congress he will. Wars and job loss ... Welcome to America, the new third world country, cheap labor for the GOP and friends. HP is going 70% offshore. Dell is closing one of it's US plants. The anti-American sentiment is growing thanks to US Based companies and American consumers who want to save 50 cents. I say love it or leave it. Wanna be here, want your CEO's to live here. Then do no harm or leave. I am ready for protectionism. It worked great in the past. Too bad Congress has sold out our great nation. We don't need no stinking global.
Bobo 8-Oct-09 9:54pm
2 replies
Dell (and Delta) just brought its call center back from India. MIT had to cancel Media Lab Asia project because Indian managers faked invoices. Intel had to cancel the Whitefield processor project in Indian because they found out the engineers had faked resumes. ComAir's IT dept. is 100% Indian and they used a short int when they should have used a long int. The result was a nationwide U.S. airport shutdown on 12/25/05. Bell Labs was destroyed by Arun Netravalli & crew and is now being turned into a shopping mall. Quark was almost destroyed by conman Alluka Kamar until the board canned him. Boeing's 787 Dreamliner is years late because of bad HCL software written in India which doesn't work. Vodaphone is in severe decline after an Indian conman CEO wrecked the company and made off with $40 million. In 1980 Reagan told Japanese car makers if they wanted to sell cars here they had to come here and make them here WITH AMERICAN LABOR. India banned Wal-Mart, puts 200% auto tariffs on U.S. cars sold there, and has LAWS on the books making it illegal to hire Americans there. Protectionism? Every other country in the world is protectionist. It's high time we deport ALL the TEMPORARY guest workers now.
lcarliner 9-Oct-09 6:39am
Also, ComAir is the same company with the Buffalo, New York, airplane crash, in which a major contributing factor was the poverty level pay of the co-pilot, overwork, and lack off company sleeping accommodations for the co-pilot and pilot!
lcarliner 9-Oct-09 6:45am
A major danger of using foreign workers for safety critical projects is that the U.S. Supreme Court, stacked with ideological "crackpots", has ruled that whistle blower rights do not apply to non-citizen, non-resident employees! A check that helps keep a major cancer of bad bosses and leaders from mestastasizing is robust whistle blower protections. Think of this the next time your life is dependent on the proper functioning of the software in that radiation treatment machine, traffic light control system, or air traffic control systems!
wcrosby 8-Oct-09 7:47pm
For far too long, this corrupt, maladministered program has been eating American jobs alive. The fact that anybody can come into the country and open a H-1B body shop, get the visa applicants to pay all of the fees, and then assign the workers to unapproved jobs shows clearly that the Department of Labor is unable to properly manage this program, and it should be shut down. I'm tired of seeing one corporate schmuck after another ask for more H-1Bs when the current crop we have is so obviously an economic disaster.
dmitry 8-Oct-09 8:51pm
1 reply
This article is irrelevant, because US is loosing jobs more then anyone else out there. Those who used to come here an bring benefits to US firms are fewer people. All productive bright heads are staying in their own countries more and more. Smart people are moving out of USA, and dumb are moving in.... this H1B visa stuff will stop on it's own, because there will be no $ money producing businesses who will be able or willing to provide sponsorship, so watchdogs like Snyder may not need to write articles on the subject expressing dismay at lack of protectionism.
Bobo 8-Oct-09 9:57pm
If all the smart heads are in other countries then please name one new industry or product to come out of India or China in the past 250 years that anyone has heard of or uses. These people are frauds who are here to take our money and send it home. Frauds - every last one.
dmitry 8-Oct-09 8:55pm
2 replies
Sergei Brin, and his partner are both immigrants, CEO of Pepsi is Indian, CEO of CISCO is a Brit, Head of US' department of labor was born in Mexico, or Indonezia. If we stop new blood from coming it we will have only rednecks.
Bobo 8-Oct-09 9:42pm

Larry Page is an American. Sergei Brin emigrated to the U.S. at age THREE. He grew up here, was educated here, and is an American for all practical purposes. Jerry Yang, formerly of Yahoo! fame emigrated to the U.S. at age SIX. He's pretty much an American also. He also had an American partner, David Filo. "Recnecks" (white Americans) created and invented IT. Now that India, Inc. has taken it over, look at the CA economy. Silicon Valley is dying, Sun is losing $150 million a MONTH with India, Inc. at the helm, and countless other companies have been destroyed. Where are the millions of new jobs India, Inc. promised to create? We've had nothing but a decade of decline and job loss since we began importing these workers in 1998. Nearly every new computer technology has been created by Americans. Microsoft employs over 30,000 H-1B and sent work to India a few years back. The result was Vista which no one wanted. Apple only employs a mere 1,308 H-1Bs by contract and Apple is booming. Apple stock is $180, MS's is $25. No need for any further argument. Not to mention all the skills and technology lost to competing nations when these foreign workers come in and get trained by Americans. Saying America will only have rednecks, is like saying Japan will only have Japanese. America is a predominantly white country whether you like it or not. Japan won't even let these people IN because they know how destructive they are. As a "redneck" I can go immigrate to Japan, but people from India can't. I wonder why that might be? Indians are unable to create their own jobs in their own country so their only recourse is to take over jobs in other countries created by other people.

EirikThorvalsson 11-Oct-09 7:21pm
You get a red neck by working hard in the hot sun - like laying bricks - not from laying back playing video games. So do not make fun of hard work. Please stop citing real immigrants having success as a reason to bring in more Temporary Indentured NON-Immigrant Visa Workers. The difference that we object to is the Visa Workers go home and take the job home with them. Of course we are all immigrants, if you trace our family trees back. My grandfather came here as an engineer, and only went back home one time for a visit. Only one person has mentioned that there are other visas beside the H-1B; like the L-1A, and L-1B that the body shops have shifted to as Congress has reduced the H-1B quota. L-1 visas do not require prevailing wage. And there are many people stuck in Green Card limbo, feeling just like the Visa Workers for several years. Wonder why your college kid could not find a summer job? The gov't brought in 360,000 J-1 "student interns" last year. Minimum wage looks real good to a Romanian or Polish kid - till he gets here and sees how high his expenses are. See the Minneapolis Star Tribune feature article from May 2009. Now that we are all out of IT work, we have to compete for laborer jobs at the other end of the economic spectrum, against H-2A and H-2B visa workers, and 14 million illegals too. Has anyone found a trustworthy chart showing how many of each kind of visa arrived in each year, and how many are still here, and how many actually got citizenship? With all the different types, I have found charts with only certain years and/or certain visa types. I have not been able to find a 10 or 20 year chart that summarizes all of them together for the big picture. Eirík Þorvaldsson
Bobo 8-Oct-09 9:33pm
As someone who has worked in Silicon Valley for 17 years, I can assure you the fraud rate is much higher than 20%. It's more like 80%. I've seen these India, Inc. bodyshops tear through one company after another, throw the best American workers out for no reason, and then not be able to do the jobs. The companies all collapse. This whole H-1B thing is a giant fraud. NASSCOM perps it by hiring U.S. PR firms to plant "worker shortages" stories in our media. If India, Inc. workers are so great then where are the millions of jobs they promised to create when we began letting them in in large numbers in 1998? We've LOST 12 million jobs. Before they got here, Americans created 20 million jobs in the 1990s. These workers have destroyed countless companies including PeopleSoft, Sun, AIG, Lehman, GM (outsourced to Wipro in 2006), Quark, and BELL LABS. Why do we continue to import such destructive workers whose only goal is to grab the money from jobs created by Americans. These millions of guest workers are killing us.
lcarliner 9-Oct-09 6:29am
A few months ago, Sallee Mae announced that it will stop outsourcing its I/T and other jobs. In the meantime, why, oh why does not use its immense lobbying power to fight against off-shoring of technical jobs, especially that for which its lendees would otherwise qualify for? After all, if for instance, a company was proposing to establish a buteric acid (stink bomb) factory next to a Donald Trump project, do you not believe he would not fight tooth and nail against it. The unbridled and unchecked H-1B, L-1 and other such programs as well as shipping tasks overseas to the likes of Infosys and Wipro, are the equivalent of stink bombs that are attacking the financial viability of Sallee Mae and other private student loan companies!
kellyjason 10-Oct-09 5:31am

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williisright 11-Oct-09 1:27pm
There's a fair and logical solution to the whole H1-B visa mess. We know that there's a high unemployment rate for technical people, and salaries have been stagnant for years; if there were a shortage, salaries would go up. Simple supply and demand.
Bill Gates claims that he has thousands of jobs that he can't fill at any price because Americans don't have the skills.
The American government claims that it doesn't have the money to verify that H1-B visa employees are paid the going rate, and independent studies show that H1-B employees make 20% less than Americans in similar jobs. And while companies won't admit it, this is their primary motivation for using H1-B holders.
My proposal is that companies be allowed to hire an unlimited number of H1-B visa holders. As many as they want. But they not only have to pay the H1-B employee the going rate, but they also have to pay the American government the same "salary" on a continuing basis for that employee.
This makes an H1-B employee twice as expensive as an American worker, but allows a company to obtain employees where a shortage exists of those with the necessary skills.
The money the company pays to the American government can be used to pay for enforcement of the "going rate" rule, and can be used to train Americans in the skills that they apparently don't have.
Everybody wins. Companies get as many workers as they need, H1-B employees aren't paid low-ball salaries, and American workers are trained in skills that they need. Once an American worker has been trained, clearly it would make sense to replace the H1-B employee with an American, so the company can reduce its costs.
Put my proposal in place, and let's see companies put their money where their mouths are.

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