India Pulls Out the Stops in Opposition to H-1B Provisions in Immigration Reform Bill

Don Tennant

If you thought the H-1B provisions of the Comprehensive Immigration Reform bill introduced in the Senate last week by the “Gang of Eight” are causing a stir here in the United States, you should see what’s happening in India. I’ll give you a hint: They’re not happy.

There’s even talk in India of playing the World Trade Organization card. According to an April 20 article on The Hindu Business Line, Biswajit Dhar, director-general, research and information systems in the Indian government, cited a possible violation of global trade rules, and warned that India is prepared to take action. This excerpt from the article explains what they’re so upset about:

According to the provisions of the Bill, if an employer has 50 or more staff , and if more than 30 per cent (but less than 50 per cent) of them are on H1B or L1 visas, a fee of $5,000 for each additional worker will have to be paid. In case the number of workers on such visas cross 50 per cent, the fee would go up to $10,000. H1B is a work permit for temporary specialty workers, while the L1 visas are issued for intra-company transfers that allow companies to relocate qualified employees to US offices. … A number of Indian IT companies have publicly expressed their apprehensions, saying the Bill would affect them adversely.

And this quote from Dhar explains the argument India is raising:

The draft Bill is at an initial stage. We do not have to act just now. But the contents certainly seem to be against the provisions of the General Agreement on Trade in Services. We have kept a strict watch on the developments and would take action when required. … Under the GATS, the US is obliged to issue 65,000 work visas to foreigners every year. It cannot put conditions on that. … There are a set of rules governing the issue of H1B visas and L1 visas and these have to be followed uniformly. The US cannot say that it would not penalise companies while issuing 65,000 visas and the penalty would kick in after the threshold.

In this country, meanwhile, there appears to be a concerted effort underway to pressure the Gang of Eight—the bi-partisan group of senators that introduced the bill—to back off. For example, Prashanthi Reddy, an immigration attorney in New York, is claiming that “if the bill passes in its current version it will kill the IT consulting business model,” and she’s encouraging IT staffing companies to write these senators to oppose the H-1B provisions in the bill. She has even posted a sample letter on her website for them to use. Here’s an excerpt:

I am writing to you regarding the concerns I have with the proposed H-1B “Outplacement” Provision under consideration for inclusion in the Comprehensive Immigration Reform bill. I am the owner of an IT Staffing Company in ________, __. … I have been informed that there is proposed language in the current draft of the Comprehensive Immigration Reform bill that would bar my company from accessing the H-1B visa program. I urge you to oppose inclusion of the so-called “Outplacement” Provision which seeks to prohibit “Labor for Hire”. … Proponents of the “Outplacement” Provision may suggest that it will protect against fraud and abuse within the H-1B visa program. There should certainly be a high level of concern regarding fraudulent visa applications, protecting American workers, and also protecting the potential H-1B workers from being taken advantage of by unscrupulous employers. The FDNS Site Visit program already implemented by USCIS has had a tremendous impact on reducing employer violations, and efforts along this line should increase. At the same time, we should not restrict legitimate employers from sponsoring H-1B workers by prohibiting the placement of an H-1B visa holder at the worksite of another employer. If these restrictions are imposed, it would have a devastating impact on my business and would actually cause the work to go to other companies who would perform the work offshore—an outcome that would be highly undesirable for my business and the U.S. citizens I employ.

It appears unlikely that the senators are going to be all that receptive to the staffing companies’ rallying cry. According to an April 22 article on TheHill.com, one of the members of the Gang of Eight, Sen. Dick Durbin (D-Ill.), is making no secret of his impatience with the way the H-1B visa program has been usurped by Indian IT outsourcing companies. Here’s an excerpt from the article:

During the Senate Judiciary Committee hearing on Monday, [Durbin] ticked off a list of India-based IT companies—including Infosys, Wipro and Tata Consultancy—that have been among the top recipients of H-1B visas in recent years.


"Americans would be shocked to know that these H-1Bs are not going to Microsoft," Durbin said, directing his comment to Microsoft General Counsel Brad Smith. "They're going to these firms, largely in India, who are finding workers, engineers, who will work at low wages in the U.S. for three years and pay a fee to Infosys or these companies. I think that is an abuse of what we are trying to achieve here."

Americans would "be shocked to know that most of the H-1B visas are not going to companies like yours—they're going to these outsourcing companies," Durbin said.



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Apr 26, 2013 6:50 AM The Truth The Truth  says:
The bill is written in the interest of the United States, not India. Nobody is standing in the way of them creating their own IT industry back home. But that would take too much time, even if they were capable because it would have been done already. They haven't figured out that their 'industry' or 'business model' is absolutely, totally and completely on provision from the United States Government. The Indians are blind to see that providing temporary help through a portal into this country does NOT equal the sale of hard goods by trade. They provide cheap help and the rules are not only set by their masters, but they have taken advantage of a program and it has finally caught up with them. More visas!!? NO PROBLEM!! Oh - it might cost a little more though.... $10K. But you said you wanted more! LOL I find it hilarious. They wanted more but there's a stipulation attached to it. They have zero recourse but to stomp their feet, complain and cry with threats of filing suit that will fall on deaf ears. They have painted themselves into a corner. ▶ Reply Reply
Apr 26, 2013 12:55 PM Perturbed Pundit Perturbed Pundit  says:
Boy, vilifying the Indians really sells, eh? Nice way to distract from the fact that it's the LEGISLATION, both existing and proposed, that's a problem, not the Indians. Reply
Apr 29, 2013 7:18 AM Walter A Nodelman Walter A Nodelman  says:
What is really needed is both a $10,000.00 fee per H-1B India worker, plus — a PER-BYTE-TAX. http://wXw.itbusinessedge.com/cm/blogs/all/no-easy-answers-on-offshoring/?cs=30511 That combination would quickly put Americans back into work in the world of paychecks with jobs and prosperity. No riots. No stock market crashes. No bureaucracies. From the insistent persistent multi-national OFFSHORERS, it would also stuff their money into the USA Federal Treasury. It would become our national debt reduction program. Quickly end the Sequester. Reply
Apr 29, 2013 7:27 AM The Truth The Truth  says: in response to Perturbed Pundit
So, by your logic, their basis for a business model and less than ethical approach is irrelevant? The Indian temp worker shops haven't drawn any attention to themselves that might result in changed legislation? Reply
Apr 30, 2013 3:49 AM Dolores Dolores  says:
I'm amazed at the rapaciousness of India towards America. The Indian companies have been caterwauling about how higher fees will impact their balance sheet - since when are they entitled to expect a particular business climate and a particular level of profitability in the US? The US doesn't promise that to American businesses, so where do the bodyshoppers get off expecting to keep rolling in clover no matter what happens to Americans? The individuals are no better than the companies, as you can see over on Immigration Voice. There they continue to commiserate about getting caught violating our laws and adivising each other how not to get caught violating our laws. Both companies and invidividuals shamelessly lobby our elected officials, as if they were their elected officials and not ours. An IT worker intoduced me to this analogy: that to them, America is one big cookie jar and they think it's unfair that we have it and they don't. No idea in their heads whatsoever as to how America got to be the great place so many of them want to come to - either it fell out of the sky, or else they claim credit for America's advanced state! Remember the "inventor" of email? Reply
Apr 30, 2013 10:17 AM Perturbed Pundit Perturbed Pundit  says: in response to The Truth
@The Truth - No, it's not irrelevant at all. It just highlights the fact that the loopholes in the LEGISLATION make their business model possible. Let's say, for discussion purposes, we ban all Indian outsourcing companies from using the H-1B visa. That will do NOTHING about the Microsofts, the Googles, the Facebooks, etc, from abusing the H-1B visa. The India issue is just a distraction from the fact that the H-1B LEGISLATION is fraught with loopholes that all companies, both foreign AND domestic, can and will abuse. I think people seem to think the Indians are the only villains and, if we do away with the Indian outsourcers, the problem goes away. That is far from the truth. Reply
Apr 30, 2013 5:37 PM Dolores Dolores  says:
So what about the Microsofts, the Googles, the Facebooks? They aren't the bloodthirsty bodyshops, who take back employees tax refunds, refuse to pay on the bench, pass on very little of the billing rate to the employee, and even, in extreme cases, taking a rebellious employee for a ride ... If we do away with the Indian outsourcerts, will the problem go away? Answer: the lion's share of it, yes. Reply
May 1, 2013 6:46 PM Perturbed Pundit Perturbed Pundit  says:
@Dolores Sure - it's possible that the H-1B workers will be treated better. Tax refunds are less likely to be taken back, H-1B workers will most likely be paid while on the bench, the employee will most likely get more of the billing rate. But the loopholes in the H-1B laws that allow the Microsofts, the Googles and the Facebooks to pay H-1B workers less than market wages will still exist. And I'll bet you dollars to donuts that the Microsofts, the Googles and the Facebooks will take advantage of those loopholes (as they currently do). And as long as the Microsofts, the Googles and the Facebooks can legally pay H-1B workers below market wages, why would they hire American citizens? Wages will still be held down. So the Indian outsourcers will be taken out of the picture. So what? That just means more H-1B workers will be available to the non-Indian outsourcers. Knowing you for the intelligent person you are, I'm really surprised that you don't see that. Reply
May 2, 2013 1:59 PM Perturbed Pundit Perturbed Pundit  says:
Not to mention the fact that the new proposed legislation, in addition to demonizing the foreign (mostly Indian) corporations, will RAISE the cap from 85,000 to something like between 100,000 and 300,000. If that happens, matters will get far, far worse for American citizens. Reply
May 2, 2013 2:38 PM Odumbo Odumbo  says:
So where did you get information that Microsofts, the Googles and the Facebooks pay below market wages for H1-Bs? OR are you just puling that out of thin air? Reply
May 3, 2013 4:41 AM Inquilab Inquilab  says:
Its sad that the discussions here are hollow without facts, so lets put some. 1) US has 300 mn people. But with its economy needs 0.12 mn people every year with a 4 year computer science degree. 2) Currently if one takes in account all the universities, they are producing 0.4 lac CS graduates so there is a shortage. 3) Unemployment in people with electrical or computer science degree is 3.2%. Many renowned economist have document that an economy is at full employment at 4% employment. (i.e any thing lower than 4% is regarded as a shortage situation) 4) Of 42000 high schools only 2100 offer computer science course, 25% less than 5 years. So why are people spending wasteful time and energy on this subject?? US NEEDS people from other countries ! period ! I think there should more coverage on building competencies rather than useless, hollow discussions. Reply
May 3, 2013 9:44 AM Perturbed Pundit Perturbed Pundit  says:
@Odumbo Below is data from the 2010 Foreign Labor Certification Annual Report from the Dept. of Labor that lists the top 10 Prevailing Wage Determinations, and data from the Bureau of Labor Statistics showing the mean hourly wage for occupations. PWD: $ 41.30 Prevailing Wage Determinations (PWD) Most Frequent Users: Computer Software Engineers, Applications Num of PWDs: 9282 2010 OES Hourly Mean Wage: $ 43.47 OES Hourly Wage Delta: $ (2.17) Yearly Wage Differentlal per PWD: $ (4,513.60) PWD: $ 37.16 Prevailing Wage Determinations (PWD) Most Frequent Users: Computer Systems Analysts Num of PWDs: 3330 2010 OES Hourly Mean Wage: $ 39.06 OES Hourly Wage Delta: $ (1.90) Yearly Wage Differentlal per PWD: $ (3,952.00) PWD: $ 44.36 Prevailing Wage Determinations (PWD) Most Frequent Users: Computer Software Engineers, Systems Software Num of PWDs: 3092 2010 OES Hourly Mean Wage: $ 47.10 OES Hourly Wage Delta: $ (2.74) Yearly Wage Differentlal per PWD: $ (5,699.20) PWD: $ 32.52 Prevailing Wage Determinations (PWD) Most Frequent Users: Computer Programmers Num of PWDs: 1101 2010 OES Hourly Mean Wage: $ 36.01 OES Hourly Wage Delta: $ (3.49) Yearly Wage Differentlal per PWD: $ (7,259.20) Reply
May 3, 2013 9:49 AM Perturbed Pundit Perturbed Pundit  says:
@Odumbo - A final note I wanted to include in my previous comment, but lacked the space - the Dept of Labor PERM data (for green card applications, which operate with the same wage rules as H-1B) show that most employers pay only the prevailing wage or very near it. You may also want to check out this, which quotes IBM as saying about choosing H-1B workers over domestic workers, "The Cost Difference Is Too Great for the Business Not to Look for [H-1B workers]" http://betanews.com/2012/10/17/ibm-doesnt-even-pretend-to-comply-with-h-1b-immigration-law/ Reply
May 3, 2013 12:35 PM Dolores Dolores  says:
@inquilab: i've been an IT worker for over 20 years and an IT hiring manager for over 10 and your assertions are 100% wrong. There was never any shortage of citizen workers and skill sets. America rose to world greatness in the IT field on citizen workers. Even if we did have a shortage, the answer is to retrain our folks, not to import foreigners and push our folks aside. Reply
May 3, 2013 3:28 PM Dolores Dolores  says:
@Perturbed Pundit. The problem with your argument is that the H-1B was never supposed to be used for cost cutting. That is not a legal and permissible use of a guestworker visa. That is one of the loopholes that needs to be closed, and may finally be. Reply
May 6, 2013 8:21 AM Perturbed Pundit Perturbed Pundit  says:
@Dolores - regarding your statement, "the H-1B was never supposed to be used for cost cutting", we're in complete agreement on this point. But it doesn't negate my argument. Your argument, if I understand it correctly, is that by eliminating the Indian companies, the "cost cutting" loophole gets resolved. This is where we disagree. The "cost cutting" loophole will still exist in the legislation, regardless of whether the Indian companies are allowed access to the H-1B visa or not. And, keep in mind, the proposed new legislation calls for an UNLIMITED number of foreign nationals who study in ANY STEM field to automatically receive a green card, regardless of how good they are at what they do, regardless of their grades, regardless of the school from which they graduate. What do you think this flood will do to wages? It will suppress them, of course. Reply
May 6, 2013 10:07 AM Perturbed Pundit Perturbed Pundit  says: in response to Dolores
@Dolores: another thing to keep in mind...you said in your previous comment (emphasis added by me), "the H-1B was never supposed to be used for cost cutting. THAT IS NOT LEGAL and permissible use of a guestworker visa. That is one of the LOOPHOLES that needs to be closed..." Again, while I agree that the H-1B visa was never supposed to be used for cost cutting, I want to draw attention to your statements that doing so "is not legal" and that "this is one of the loopholes that needs to be closed". What I'm trying to explain to you is that the H-1B laws DO allow companies to use the visas for cost cutting LEGALLY. That's what makes it a loophole. And it most certainly will not be closed by eliminating the Indian companies because "mainstream" companies also use the H-1B visa for cost cutting purposes - again, all legal. And with the proposed legislation, the cap will increase from anywhere between 100,000 and 300,000 AND will give unlimited green cards to foreign STEM graduates, regardless of their skill level or their academic performance. If this legislation gets passed, domestic IT workers are in for even bigger problems than we have now. Reply
May 6, 2013 3:17 PM Odumbo Odumbo  says: in response to Perturbed Pundit
Perturbed Pundit , You did not give any company specific wage rates... I was asking specifically about companies like Microsoft, Google and Facebooks which you alleged pay below market wages for H1-Bs. Where did you get this data from? For a "pundit", it seems you just made that out of thin air. The wage rates you gave were prevailing wages set by the Department of Labor for positions and roles in the industry... so essentially they are setting the baseline. So your beef is to a large extent with the department of Labor also. Reply
May 7, 2013 12:31 AM Inquilab Inquilab  says: in response to Dolores
You see, any argument devoid of fact cannot be proven, so i ask you to provide data to rest your case. You see the rules of economics which are currently at play are very powerful and you have to understand it. While the industrial revolution started in Great Britan, including Textiles, Iron making etc, you saw these moving gradually to the developing world where there was a cost arbitrage. This trend continues till date, and the manufacturing markets keeps moving to lower cost destination. This evolution cannot be stopped under the guise of “PROTECTIONISM” its the rule of pure economics. This trend has not stopped the developed countries from innovating newer products and processes. The same trend is happening and will happen in IT. That will not stop US from innovating in IT. Also the world is a global market today and there is interdependence of economies and finance. It would indeed unfair to say that there is a need of PROTECTIONISM on one side and the need for a untapped market of emerging economies to supply good by the developed world on other hand. Both arguments cannot go together. Reply
May 7, 2013 3:06 PM Perturbed Pundit Perturbed Pundit  says: in response to Odumbo
@Odumbo - indeed, my beef is ENTIRELY with the Dept. of Labor and with our legislators, not with the corporations who use the loopholes. My whole point in participating in these comments was to point out that Congress is scapegoating Indian outsourcing companies when the problem is with the H-1B legislation. I think I made this quite clear in an earlier comment. You just seem to, for whatever reason, be argumentative. Reply
May 9, 2013 9:10 AM Odumbo Odumbo  says:
It's very easy to fix the problem - increase the baseline wage rate which is currently outdated. This will stop outsourcing companies from gaming the visa system. I called you out on your allegation that US companies like Microsoft, Google and Facebook pay below market wages for H1-Bs. It seems you do not have a source to their H1-B salary figures. You may see anyone asking for evidence as "argumentive" - while I others see this as fact checking. I know quite a few talented foreigners (not just from India) here on H1-B easily making 6 figure salaries. Reply
May 11, 2013 3:10 AM Perturbed Pundit Perturbed Pundit  says: in response to Odumbo
You: "This will stop outsourcing companies from gaming the visa system" / My Response: It sounds like you're blaming the outsourcing companies too. Prove they're gaming the system - or are you pulling this out of thin air? / You: "It seems you do not have a source to their H1-B salary figures." / My Response: When I used the phrase, "the Microsofts, the Googles and the Facebooks", I used it to mean all "mainstream" or "domestic" companies, not specifically Microsoft, Google and/or Facebook - and I think you know that. I find it funny how you completely ignored the data I did provide. I think you know very well that a "smoking gun" doesn't exist because of the scarcity of data (probably by design) and that you need to extrapolate and use logic on the data that is available. I find it interesting that you completely ignored the IBM link, which is an all-out admission that IBM is using the H-1B visa as a cost-cutting tool. / You: "I know quite a few talented foreigners (not just from India) here on H1-B easily making 6 figure salaries." / My Response: You must be joking...right? You discount the data I provided and then use anecdotes to support your argument. Chutzpah. Reply
Jun 29, 2013 3:06 PM American American  says:
Please join this campaign: http://chn.ge/12xHsVb Reply
Jun 29, 2013 3:10 PM American American  says:
Indian Consulting companies are screwing American Job Market... Now they increasing visa to 200000, Senator Orrin Hatch sold American workers to Big Tech Titans... We need to put Ban on Outplacement of by H1b defendant employers Reply
Jun 30, 2013 6:59 AM PaulArt PaulArt  says: in response to Inquilab
Interesting. I did not see India and China offer H1-B visa programs to bring in cartloads of American, Canadian and European Engineers over to Bharat to fill jobs. Its tiring to keep hearing current H1-Bs and wannabe H1-Bs making this argument again and again to attain that magical Green Card and US Citizenship. What they do not understand is, one day after they come here and get their Green Cards and Citizenships in 10 years time, their jobs will also either go to India or some other H1-B will come here to fill their job after they have been laid off. All this globalization ecnomonics arguments is a bunch of hogwash dreamed up by the 0.1% to put more money into their own pockets and impoverish the middle classes in every country. Jobs that went from US to India are now moving to China. Very few manufacturing outsources are going to India, they are moving to China. If the Chineses spoke better English then most BPO and other jobs would go there and not to India. Will you still be making your 'rules of economics currently at play' argument then? Reply
Jun 30, 2013 7:06 AM PaulArt PaulArt  says: in response to Perturbed Pundit
It is true that there are a few talented foreigners who make 6 figure salaries, I am one of them but the catch is when I started off on a H1-B in 1994 I made $10,000 less than what they would have paid an American Engineer. Many H1-Bs, 'currently on H1-B but waiting on Green Card' people are the ones who are very voluble on these comments columns and use these kinds of 'I know someone who made $200,000' exceptions to prove the rule that H1-Bs are not paid pittance wages and are exploited labor imported from abroad. Consider this fact - USA faces a severe shortage of Doctors, so why don't we get Infosys and TCS and Coginzant to import Indian Doctors for us here in USA? Hey, they would be dead cheap, it would break the back of the American Medical Association and finally we could have Single Payer,no? Nope, this will never happen because the American Medical Association and the Specialty Physician lobbies are more powerful in USA than the Mafia. The politicians are scared to death about them and that is why we don't have an H1-B program for Doctors. In America there is only one rule, the people who have the money have the organizing power and political muscle. Reply

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