Skilled Foreign Worker Taking Your Job? It’s Legal

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Laura D. Francis

U.S. information technology workers are being laid off and required to train their replacements: temporary visa holders employed by outsourcing companies. But this practice is actually perfectly legal.

President Donald Trump and members of Congress have repeatedly expressed concern that the program is being used to replace U.S. workers with foreign labor.

Senate Judiciary Committee Chairman Charles Grassley (R-Iowa) cited “egregious abuses of the H-1B program,” in a May 26 statement. Sen. Richard Blumenthal (D-Conn.) said using H-1B visas to displace Americans is “against the spirit and intent and letter of the law,” speaking at a May 24 Judiciary Committee hearing.

But the issue is broader and more complicated than just rooting out fraud and abuse in the IT industry, and Congress may have a tough job ahead of it.

What the Law Allows

“Calling something fraud and abuse is a great way to kick the can to somebody else,” said Bruce Morrison, an immigration attorney and lobbyist for IEEE-USA, which represents U.S. engineers. “The problem is that the law was written with the intention of allowing this conduct,” he told Bloomberg BNA May 31.

Morrison, a former Democratic congressman, was the author of the House version of what became the Immigration Act of 1990, which established the H-1B program.

But the American Competitiveness and Workforce Improvement Act, passed in 1998, changed the program, Morrison said. That law created the “outsourcer loophole": heavy users of the H-1B program don’t have to attest that they haven’t displaced U.S. workers if they pay their H-1B workers at least $60,000 or if the workers have master’s degrees or higher, Morrison said.

“The barn door was swung wide open, and now people are saying isn’t it awful that the horses are getting out,” he said.

Administrative Action?

The USCIS said in a letter cited by Grassley that it’s working to curb abuses. The agency convened a working group on H-1B visas, is developing new regulations and policy guidance, and has ramped up site visits.

The USCIS will continue the increased site visits to see that employers comply with H-1B rules, Stephen Yale-Loehr, a professor of immigration law practice at Cornell Law School, told Bloomberg BNA May 31. Unannounced site visits also are part of the agency’s “general compliance review,” said Yale-Loehr, who also practices with Miller Mayer in Ithaca, N.Y.

The agency also can focus on “H-1B-dependent” employers, or those with a certain percentage of their workforce on the visas, he said.

Meanwhile, the Department of Labor can conduct investigations into whether H-1B workers are being paid properly, Yale-Loehr said.

Morrison said the administration could also retool the process for selecting H-1Bs petitions, currently a random lottery.

IEEE-USA’s proposed that priority go to employers that aren’t H-1B-dependent. “That, as a practical matter, would probably keep most outsourcers out,” Morrison said.

An April 18 executive order requires that petitions be selected only for the “most-skilled or highest-paid petition beneficiaries.”

But beyond that, there isn’t much else the executive branch can do to curb H-1B-related outsourcing.

“This administration has not been shy” about taking executive action, Vic Goel of Goel & Anderson in Reston, Va., told Bloomberg BNA May 31. “If this was something that could have been done administratively, they probably would have addressed it already,” he said.

Proceed With Caution

If Congress does decide to act, it should proceed with caution, said Goel, chairman of the American Immigration Lawyers Association’s Business Immigration Committee. “Acting too quickly and creating unnecessary restrictions often backfires,” he said.

The IT industry isn’t the only one that uses an outsourcing model, Goel said. For example, a doctor on an H-1B visa may be employed by a medical practice but work in a hospital, he said.

And even specifically targeting Indian outsourcing companies can have consequences, he said. The question is, “Do these companies provide any value to our economy?” Goel said. “In most cases, the answer is yes,” he said.

“Outsourcing has come to mean something more than it used to mean,” Dagmar Butte of Parker Butte & Lane in Portland, Ore., told Bloomberg BNA May 31. It used to mean sending jobs overseas, she said.

Now, the term outsourcing includes contracting out an employer’s function to another company, a long-standing practice, said Butte, chairwoman of AILA’s USCIS Service Center Operations Committee.

“In terms of overall numbers,” U.S. IT workers being displaced by H-1B workers “is a minuscule portion of the United States economy,” Goel said. But the story “resonates” with people, he said. Combine that with a rise in populist sentiment, and you get a “backlash against immigrants that seems to be going on in certain quarters,” he said.

Jobs Not Coming Back

Even if Congress bans outsourcers from the H-1B program, “we’re not going to see the great majority of those jobs return to U.S. workers,” Butte said. “We’re going to see them sent to other countries,” she said.

“Business is about making money and not about putting the American workforce to work,” she said.

But if a company needs a particular foreign engineer or computer scientist who’s graduated from a U.S. college or university, that person should be sponsored for a green card, Morrison said. Unlike H-1B visas, which tie workers to their employers, green cards give foreign workers the same market power as U.S. citizens, he said.

“H-1B is a cost-cutting machine,” Morrison said. It’s easier to get people to work for less and have fewer choices, he said. “It’s not that it’s bad that people come and want to stay in the United States and contribute to our economy and our society,” but “they shouldn’t be driving out Americans,” he said.

But Butte said giving green cards to graduates of U.S. colleges and universities is “a lovely idea that’s dead on arrival.” If the concern is that foreign workers are taking jobs from Americans, giving out green cards rather than H-1Bs would never fly in Congress, she said.

In fact, “Congress is very unlikely to do anything, certainly this year,” Yale-Loehr said. And 2018 “could go either way,” he said.

“This is not a new issue,” Goel said. “Congress has had plenty of opportunities to act on this in the past,” but all of a sudden H-1B-related outsourcing is perceived as “abuse,” he said. There’s been a “tacit endorsement” of the practice for years, he said.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Labor & Employment on Bloomberg Law