What More Can Be Done to H-1B Guestworker Visas? Plenty (Corrected)

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By Laura D. Francis

The Trump administration has lobbed a variety of administrative actions at the H-1B visa program, but there’s more that can be done.

In fact, some say the administration hasn’t gone far enough to address the core complaint against the high-skill guestworker visa program: displacement of U.S. workers.

“What have they done? Pretty much nothing,” said Bruce Morrison, an immigration attorney and lobbyist for IEEE-USA, which represents U.S. engineers. “The world that existed in November 2016 exists in March 2018,” he told Bloomberg Law.

“It is harder to find a job and it’s harder to get paid what you’re worth now,” said Matthew Culver, a senior IT engineer who lost his job with Carnival Corp. in early 2017. “These people can exploit this system and pay next to nothing to bring these guys in,” he told Bloomberg Law.

“It’s so hard to keep up” with the calls and messages from U.S. workers who are losing their jobs, Sarasota, Fla., attorney Sara Blackwell said. Information technology remains the epicenter, but “it has expanded dramatically” to other industries, she told Bloomberg Law.

Campaign Item

The H-1B program was one of few immigration items—other than the border wall—that President Donald Trump specifically mentioned during his campaign.

Since then, the administration has taken various measures to overhaul the program.

The president in April issued his “Buy American and Hire American” executive order, which requires federal agencies to “suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”

U.S. Citizenship and Immigration Services, which administers the H-1B program, has issued several new policy memorandums on H-1Bs to implement that order.

The agency also started scrutinizing the program more heavily by seeking more information from employers, setting up an email box for fraud complaints, and expanding site visits.

‘Using a Shotgun’ Instead of ‘a Scalpel’

“The problem is” the administration is “using a shotgun to accomplish what might have been accomplished with a scalpel,” immigration attorney Vic Goel of Goel & Anderson in Reston, Va., told Bloomberg Law March 12.

The efforts so far apply to H-1Bs across the board, while critics have largely focused on IT outsourcing companies, he said. In addition to providing IT services to clients that may lay off their own staff, outsourcers eat up a chunk of the available H-1Bs each year.

In fiscal year 2016, USCIS approved a total of 45,534 H-1B petitions for Indian tech companies Cognizant Technology Solutions, Infosys Ltd., and Tata Consultancy Services, according to the most recent agency data. The total represents a combination of new visas, extensions, renewals, and petitions filed when an H-1B visa holder moved to a new work location.

But these Indian tech companies “pay their H-1Bs at least the actual market wage or prevailing wage for people with those skills,” Jeff Lande of Lande Group in Arlington, Va., told Bloomberg Law March 12. The Labor Department, which enforces the wage provisions of the H-1B program, “has never found any of the major (Indian and India-centric IT services) companies to have an issue regarding the wage requirements, as a result of any of the routine audits the agency conducts,” he said in an email.

Lande advises NASSCOM, the trade association representing Indian IT services companies.

“The major Indian companies are services and solutions providers,” he said. “They are not staffing companies and their visa holders do not ‘replace’ employees of their clients. The projects they work on involve providing solutions to complex projects—not providing individuals,” Lande said.

Carnival Outsources IT Functions

That wasn’t Culver’s experience.

Carnival announced in late 2016 that Paris-based Capgemini would provide IT services for the company, Culver said. Capgemini America Inc. received 3,276 H-1B visas in FY 2016.

Carnival employees were offered positions with Capgemini, but those jobs were only guaranteed for six months, according to Culver. And “the terms of the job were going to be different,” he said. Instead of his previous role performing advanced troubleshooting on critical applications, Culver said he would be handling lower-level IT support and training for Capgemini.

Culver responded with a counteroffer, which the company treated as a resignation, he said.

Carnival didn’t make the outsourcing decision as a cost-saving measure, company spokesman Roger Frizzell told Bloomberg Law. “We made the decision to work with Capgemini because we wanted to upgrade our IT practice by working with a firm that specializes in IT,” he said in an email.

“We don’t expect any savings, but rather a significant step forward with the strength, expertise and capabilities of our IT practice serving our company’s growing needs,” Frizzell said.

A representative for Capgemini didn’t respond to Bloomberg Law’s request for comment.


But the cost savings come primarily from the offshoring of the jobs, said Blackwell, who worked with Culver and other Carnival employees.

The “general business model” is to bring in relatively small groups of H-1B workers at a time “until it becomes thousands,” she said. The mainly Indian workers then train workers back in India, and the jobs eventually are performed entirely overseas, she said.

A U.S. IT professional making $80,000 ultimately gets replaced by an Indian worker making the equivalent of $9,000, Blackwell said.

“H-1B has almost become a toxic word within the IT industry,” said Goel, who serves on the American Immigration Lawyers Association’s Business Immigration Committee. There’s a perception that it’s only being done for cost or to displace U.S. workers, “when in fact that’s usually not the case,” he said.

Rather, the decision is a matter of “core competency"—whether another company with expertise can be more effective and efficient at performing a function that isn’t the core of what a company does, Goel said. Most employers don’t make a business decision based on “we’re trying to screw our workers,” he said.

Lottery Change

“I don’t know that there’s a good way” to address the worker displacement issue outside of legislation, Goel said.

USCIS could rework the H-1B lottery, Morrison told Bloomberg Law. For each of the past five years, the agency has conducted a lottery after demand for H-1B visas far exceeded supply.

“There are many ways they could’ve written new regulations so that the outsourcers would be put to the end of the line,” giving priority to other companies seeking the visas, said Morrison, who wrote the House version of what became the law establishing the modern H-1B program. Most outsourcers are “H-1B dependent” employers, which are treated differently under the Immigration and Nationality Act, he said.

To be considered H-1B dependent, an employer with 25 or fewer employees must have at least eight H-1B workers. Employers with 26 to 50 employees must have at least 13 H-1B workers, while employers with more than 51 employees must have at least 15 percent of its workforce on H-1B visas.

With a straight lottery that throws everyone into the same pool, about half of the 85,000 available visas go to outsourcing companies each year, Morrison said.

New Law?

“Congress is going to have to pass a new law” for there to be a noticeable change in the H-1B program, Eric Ruark, director of research for NumbersUSA, told Bloomberg Law. “The president can only do so much.”

“We don’t oppose having the H-1B program,” but Congress needs to enact a requirement that foreign workers not displace U.S. workers, said Ruark, whose organization supports lower immigration levels. And that should be part of any discussion Congress has on the president’s call for a merit-based immigration system, he said.

There is a bill pending in Congress that directly addresses the displacement issue.

H-1B dependent employers currently must attest that they’re not displacing U.S. workers, unless they pay their H-1B workers at least $60,000 or those workers have a master’s degree or higher.

H.R. 170, sponsored by Rep. Darrell Issa (R-Calif.), “doesn’t allow you to pay your way out of the displacement requirements,” Morrison said. There are new salary levels that H-1B dependent employers would have to pay to avoid job advertising requirements, but they wouldn’t affect the bill’s ban on displacing U.S. workers, he said.

The bill cleared the House Judiciary Committee in November but has yet to see floor action.

The White House “lobbied very aggressively” on legislation addressing the Deferred Action for Childhood Arrivals program, Morrison said. If the president really wants to curtail outsourcing, it should do the same with Issa’s bill, he said.

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