Visa's use provokes opposition by techies / L-1 regarded as threat to workers

Visa's use provokes opposition by techies / L-1 regarded as threat to workers

Published 4:00 am, Sunday, May 25, 2003

An obscure work visa known as the L-1 has become the center of a bitter controversy in the technology industry.
Much like the H-1B before it -- an equally obscure visa that rose to prominence when American workers complained they were being displaced by its recipients -- the L-1 is catching the ire of tech workers and the eye of government regulators who disagree on whether the visa is being used legally.
In the middle of the spat are Indian firms that undertake tech projects for U.S. companies, including many in the Bay Area, on a contract basis.
The L-1 visa was originally intended for multinational companies that need to transfer key employees to U.S. divisions. But in recent years, outsourcing firms such as Wipro Technologies, InfosysTechnologies and Tata Consultancy Services have stepped up their use of the L-1 visa to bring programmers and other professionals from India to work at the offices of U.S. clients.
In the Bay Area, the firms' clients include Hewlett-Packard, Cisco Systems, Visa International, ChevronTexaco and Sun Microsystems.

Some U.S. tech workers, frustrated by growing unemployment, say the L-1, like the H-1B before it, creates unfair competition and eliminates jobs of American workers. In fact, the workers like the L-1 even less than the H-1B because L-1 lacks the abuse-prevention clauses and annual limit that H-1B has.
A bill introduced by a Florida congressman last week seeks to ban the visa's use in outsourcing.
But the outsourcing companies, multimillion-dollar concerns with thousands of employees in the United States and abroad, say their use of the visa is legal and appropriate.
The companies make no secret of their visa use. Wipro and Infosys, both listed on U.S. stock exchanges, disclose the number of L-1 and H-1B visas they get in financial filings.
U.S. worker groups, including the AFL-CIO's Department for Professional Employees and the Seattle technology union WashTech, say outsourcers are using L-1 to get around what they call the minimal worker protections attached to H- 1B visas.
"We think it's the secret stealth visa," said Marcus Courtney, president of WashTech.
L-1s "seem to be sprouting up all over the Bay Area, and they're totally off the radar screen," said Peter Bennett, a former computer programmer who works as a mortgage broker in Danville. Because he runs a Web site protesting the H-1B visa program (, Bennett gets 50 to 500 e-mails a day from tech professionals who are out of work or fear losing their jobs. An increasing number of them complain that L-1 workers have shown up in their offices.
Restrictions that apply to H-1B, but not L-1, include an annual limit on the number of visas issued and a requirement that the visa applicant have a bachelor's degree or higher. H-1B visa applicants have to pay a $1,000 fee toward training American workers; L-1 applicants don't.
Visa law also requires workers with H-1Bs to be paid the prevailing wage in the region where they work, although the Department of Labor does not routinely check up on this.
The L-1 visa carries no salary requirements, theoretically allowing a foreign worker to continue drawing the salary he was paid at home while working side-by-side with or replacing Americans earning two or three times as much.
Outsourcing firms say they pay their L-1 workers wages comparable to what American workers earn. But Tata acknowledges that when it took over a project at Siemens Information and Communication Networks in Lake Mary, Fla., it paid some programmers only $36,000 a year -- below the average local range of $37, 794 to $69,638 for a basic programmer (determined by Department of Labor surveys) and far below the $98,000 that one U.S. programmer there said she was paid.
Tata spokesman Tom Conway said taxes, Social Security and other withholding bring the salaries up to the average range.
After Tata took over the project, Siemens let a dozen employees go, said spokeswoman Paula Davis.
Some of those employees were outraged that they could be replaced by foreigners. It especially stung that they were asked to train Tata's workers before they left, a procedure that Tata calls knowledge transfer.
"This is what they call outsourcing. I call it insourcing. Import foreign workers, mandate your American workers to train them, then lay off your Americans," said Michael Emmons, who left Siemens last fall just before his job there was to end. Emmons had worked as a contract computer programmer for the company for six years, first in San Jose, then in Florida.
Davis said Emmons and other workers were not directly replaced by foreign workers. "We actually outsourced a function. It wasn't replacing this employee with that employee," she said.
What happened in Florida follows the general pattern of how Indian outsourcing firms use L-1 visas: The Indian firms take over a project, such as software maintenance, at low rates for an American client and send in a team of visa holders to learn the company's procedures. As much of the work as possible is then transferred to the company's headquarters in India, where wages are much lower. But some visa holders continue working at the client's office.
Whether this is a legal use of the L-1 visa is a matter of interpretation. An official at the Department of Homeland Security, now responsible for immigration, said this kind of use is fraudulent because the L-1 is designated to let workers move from one office to another within a company -- not from a company to a client.
"If an L-1 comes into the United States to work, they're coming to work for their specific company that petitioned for them, not for another company that they're being contracted out to. That would be a fraudulent use of an L-1 visa, " said Christopher Bentley, spokesman for the Bureau of Citizenship and Immigration Services, a division of the Department of Homeland Security that replaced Immigration and Naturalization Services. The bureau is assessing the L-1 and other visa programs for fraud, he said.
The companies say they would never risk using the visas if officials had not assured them it is legal. Wipro immigration attorney Terry Helbush said she is puzzled by Homeland Security's statement. "The L-1 visas are all approved by the consulate or by the INS. In our submissions, we're very clear that . . . some of the employees are on site at the client."
Tata also said it complies with visa law. Infosys declined to comment because it is in a quiet period before a financial transaction.
The way the outsourcers see it, they are complying with the law because their employees are ultimately working for them, whether sitting in a cubicle in Silicon Valley or sitting in one in Bangalore.
Tata and Wipro both strive to differentiate themselves from what they call body shoppers, firms that provide nothing more than inexpensive workers for clients.
Wipro Chief Operating Officer Lakshman Badiga said it is precisely because the company has moved from just bringing in workers to running complex global projects that it has increased its use of L-1 visas.
The State Department says the outsourcers are within the law.
"The fact that someone is on the site of (a client) does not make them ineligible for an L-1 as long as . . . the company they actually work for is truly functioning as their employer in terms of how they're paid and who has the right to fire them," said Stuart Patt, spokesman for the State Department's Consular Affairs Bureau.
Not even immigration attorneys who specialize in procuring work visas can agree.
Memphis immigration lawyer Gregory Siskind said, "It's largely inappropriate for companies to be using the L-1 to bring in workers that are being contracted out to other companies. I would be very surprised if it continues for very much longer without a crackdown."
If using L-1s for outsourcing is legal now, it won't be under legislation introduced last week by Rep. John Mica, R-Fla. Calling L-1 "a back door to cheap labor," Mica said his bill would ban L-1 visa holders from being transferred to client companies.
It's not clear whether the legislation would actually ban Wipro, Tata and others from using the visas just as they have been because the companies say the workers are their employees even when they are doing work for clients.
L-1 visas have been used in relative obscurity since 1970. But during the past two years, an increasing number of the visas are going to workers from a single country: India. Thirty-three percent of the 32,416 L-1 visas issued so far in 2003 went to Indians, up from 20 percent in 2001.
At Wipro and Infosys, L-1 visa use rose considerably during the same time. Wipro, for example, had 624 H-1B employees in 2000 but only 289 L-1 workers. Since then, its L-1 count has soared to 1,157, while the number of H-1B employees has increased to 705.
The limit on that other contentious tech visa, the H-1B, is scheduled to go from 195,000 to 65,000 in the fall unless Congress intervenes. Worker groups are gearing up to fight industry lobbyists to make sure the limit is lowered.
Some say the L-1 visa could make the H-1B limit irrelevant.
"If the H-1B becomes more difficult to get, (companies) will just adapt and go to L-1s," said Ron Hira, a volunteer on workforce policy issues at the Institute of Electrical and Electronics Engineers-USA. Hira is also a Columbia Universityresearcher on science and technology policy.


Popular Posts

Blog Archive

More Links

No one has ever become poor by giving, Please Donate


Popular Posts

Recent Posts

Unordered List

  • Lorem ipsum dolor sit amet, consectetuer adipiscing elit.
  • Aliquam tincidunt mauris eu risus.
  • Vestibulum auctor dapibus neque.

Theme Support

Need our help to upload or customize this blogger template? Contact me with details about the theme customization you need.