Silicon Valley’s skilled workforce shortage problem is not new. As a remedy to this growing problem, companies try to bring engineers from other parts of the world, especially from India. These people require special work visas (permits) called H1B Visas.
The US H1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields such as in architecture, engineering, mathematics, science, and medicine. Under the visa a US company can employ a foreign worker for up to six years.
INS and Department of Labor regulate the process by imposing rules and regulations. Such as:
- H1B visas are subject to annual numerical limits.
- Companies cannot pay below the minimum or prevailing wage in that geographic location for particular position. This website tells you the minimum salary amount.
- H1B visa applicants has to be a 4 year university graduate.
- Required position can not be fulfilled by a US worker.
Organizations, especially outsource recruiting firms, claim that there just aren’t enough highly skilled IT workers. Perhaps what they really mean is that there aren’t enough highly skilled workers willing to work for lower wages and zero benefits.
While there is a skills gap, it doesn’t explain why some companies are using the H-1B visa program to hire inexperienced foreign workers at lower pay to replace currently employed citizens.
None of the regulations stop corporations from exploiting the system and here is how they do it:
Two Silicon Valley companies owned by an Indian-American have been ordered to pay $103,000 in fines to the federal government and $84,000 in back wages to its employees carrying H-1B visas.
During investigations, US Department of Labor Wage and Hour investigators found the two companies violated the H-1B provisions of the Immigration and Nationality Act by misrepresenting the prevailing wage level on the Labor Condition Applications required by the act, an official release said on Monday.
Below are some news excerpts from the media about H1B abuse.
Southern California Edison/ Los Angeles
Beginning in August 2014, Southern California Edison began replacing approximately 400 IT employees with a smaller, lower-paid workforce brought in from overseas through the H-1B program, according to Computerworld’s Patrick Thibodeau, who has reported extensively on this issue. The original employees, who were forced to train their replacements as well as sign nondisclosure agreements and gag orders, were making an average of about $110,000 a year. The replacements were brought to Southern California Edison by outsourcing firms Infosys and Tata, and were paid an average of between $65,000 and $75,000, according to depositions in a Senate Judiciary Committee hearing spurred by complaints about the practice.
Disney (well, sort of)
The happiest place on earth made headlines when it announced in October 2014 it was laying off many of its IT workers and replacing them with outsourced talent. The firm attempted to spin the move as a “restructuring” that would increase innovation and allow U.S. workers easier access to management and leadership positions. As in the case of Southern California Edison, Disney IT employees also were responsible for training their replacements. Perhaps because of the headlines and the public outcry surrounding the, uh, ‘restructuring,’ Disney announced in June 2015 it was rescinding the layoffs and canceling its plans to outsource those jobs.
Pfizer Connecticut R&D
In 2008, workers at pharmaceutical giant Pfizer’s New London and Groton (Connecticut) research and development campus raised the alarm: They were being replaced by Indian workers on H-1B visas and forced to train their replacements. Those outsourced workers were scheduled to return to India, where they will run the same systems as their U.S. counterparts, albeit at a cheaper rate and with diminished benefits. The move was part of an outsourcing agreement signed in 2005 between Pfizer, Infosys Technologies and Satyam Computer Services.
Molina Healthcare
In 2010, Molina Healthcare announced it was laying off much of its staff. The announcement took place on the same day the U.S. government approved forty H-1B visa applications for the company; a lawsuit and legal battle ensued. The suit alleged that the fired employees, all of whom were U.S. citizens or green card holders, were fired as a cost-cutting measure so they could be replaced by cheaper, less-experienced foreign workers, according to the Boston Globe. The fired Molina employees were earning an average of $75,000 a year, plus benefits; the new workers, brought over to work on H-1B visas, earned $50,000, with no benefits.
Infosys and Tata
Noticed a pattern, yet? The same large outsourcing firms keep cropping up in relation to these scandals. As Ron Hira, an Economic Policy Institute research associate and an associate professor of public policy at Howard University outlines in this blog for the Economic Policy Institute: “These two India-based IT firms specialize in outsourcing and offshoring, are major publicly traded companies with a combined market value of about $115 billion, and are the top two H-1B employers in the United States. In Fiscal Year (FY) 2013, Infosys ranked first with 6,269 H-1B petitions approved by the government, and Tata ranked second with 6,193 … these leading offshore outsourcing firms use the H-1B program to replace American workers and to facilitate the offshoring of American jobs … they don’t use the H-1B visa as a way to alleviate a shortage of STEM-educated U.S. workers; they use it primarily to cut labor costs.”
