How Mega Corporations Rigged The US H-1B Visa Program At The Expense Of Small Business

“The H-1B program is critical as a way for [US] employers to fill skill gaps and for really talented people to come to the United States,” said Ronil Hira, a professor at Howard University who studies visa programs. “But the outsourcing companies are squeezing out legitimate users of the program,” he said. “The H-1Bs are actually pushing jobs offshore.”

Those firms have used the visas to bring their employees, mostly from India, for large contracts to take over work at American businesses. And as the share of H-1B visas obtained by outsourcing firms has grown, more Americans say they are being put out of work, or are seeing their jobs moved overseas.

The top companies receiving H-1B visas in recent years, Professor Hira found, include Tata Consultancy Services, known as TCS, Infosys and Wipro, all outsourcing giants based in India; Cognizant, with headquarters in New Jersey; and Accenture, a global operation incorporated in Ireland.

– From the New York Times article: Large Companies Game H-1B Visa Program, and Jobs Leave the U.S.

By Michael Krieger: Most of you will be at least somewhat familiar with the H-1B visa program, which is meant to provide work-visas for foreign workers skilled in technology and science. The annual quota of these visas is 85,000, and large consulting firms (many of them Indian), are flooding the system with thousands of requests and scooping up a disproportionate share. They are exploiting a loophole which imposes no limits on the amount of visas each individual company can acquire. In fact, the 20 biggest recipients of H-1B visas for 2014 collected 40% of the total, leaving those who need it most left high and dry.
Here’s more from the New York Times:

Théo Négri, a young software engineer from France, had come up with so many novel ideas at his job at an Internet start-up in San Francisco that the American entrepreneur who hired him wanted to keep him on.

So he helped Mr. Négri apply for a three-year work visa for foreign professionals with college degrees and specialized skills, mainly in technology and science. With his master’s degree from a French university and advanced computer abilities, Mr. Négri seemed to fit the bill.

But his application for the H-1B visa was denied, and he had to leave the United States. Back in France, Mr. Négri used his data skills to figure out why.

The answer was simple: Many of the visas are given out through a lottery, and a small number of giant global outsourcing companies had flooded the system with applications, significantly increasing their chances of success. While he had one application in last year’s lottery and lost, one of the outsourcing companies applied for at least 14,000. The companies were squeezing out American employers like his boss.

Congress set up the H-1B program to help American companies hire foreigners with exceptional skills, to fill open jobs and to help their businesses grow. But the program has been failing many American employers who cannot get visas for foreigners with the special skills they need.

Instead, the outsourcing firms are increasingly dominating the program, federal records show. In recent years, they have obtained many thousands of the visas — which are limited to 85,000 a year — by learning to game the H-1B system without breaking the rules, researchers and lawyers said.

“The H-1B program is critical as a way for employers to fill skill gaps and for really talented people to come to the United States,” said Ronil Hira, a professor at Howard University who studies visa programs. “But the outsourcing companies are squeezing out legitimate users of the program,” he said. “The H-1Bs are actually pushing jobs offshore.”

Those firms have used the visas to bring their employees, mostly from India, for large contracts to take over work at American businesses. And as the share of H-1B visas obtained by outsourcing firms has grown, more Americans say they are being put out of work, or are seeing their jobs moved overseas.

You just can’t make this stuff up.

Of the 20 companies that received the most H-1B visas in 2014, 13 were global outsourcing operations, according to an analysis of federal records by Professor Hira. The top 20 companies took nearly 40 percent of the visas available — about 32,000 — while more than 10,000 other employers received far fewer visas each. And about half of the applications in 2014 were rejected entirely because the quota had been met.

The top companies receiving H-1B visas in recent years, Professor Hira found, include Tata Consultancy Services, known as TCS, Infosys and Wipro, all outsourcing giants based in India; Cognizant, with headquarters in New Jersey; and Accenture, a global operation incorporated in Ireland.

For example, federal law requires global companies employing large numbers of H-1B workers to sign a declaration saying they will not displace Americans. But there is a loophole: An exemption in the fine print cancels that requirement if employers pay H-1B workers at least $60,000 a year — significantly less than an experienced technology worker’s salary in many parts of the United States.

Many of the outsourcing firms’ temporary workers earn $60,000 or just a little more, according to federal data compiled by Professor Hira.

Federal officials allow only one application for each foreign worker. But there is no limit on the number of visas a single company can seek. A company with thousands of employees can submit many applications. By law, if applications quickly exceed the quota, officials turn to a computer-run lottery to select the visa recipients.

Then his visa was denied. So Mr. Négri combed through public documents that employers file with the Department of Labor as a first step in an H-1B application. For the limited quota of visas, Mr. Négri discovered, the outsourcing companies had submitted far more applications than a small company like BuildZoom could manage or afford — each application costs up to $4,000.

Together the top five outsourcing companies had prepared as many as 55,000 H-1B applications. TCS, the company that had prepared applications for at least 14,000 visas, won 5,650 of them.

Just another example of the big and powerful using a government subsidy at the expense of the small business entrepreneur. With everything else in the American economy one gigantic rigged loophole, we shouldn’t expect this program to be any different.

In Liberty,
Michael Krieger
 

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