The new H-1B and L-1 legislation: Bleak future ahead of the Indian IT firms

[mule_train]

Source: South Asian Blog

Tuesday, June 16, 2009
The new H-1B and L-1 legislation: Bleak future ahead of the Indian IT firms
(This entry was first published in this blog on April 2009 and it is based on the context of that time. It got deleted for technical problems and I am again posting it here.)

Indian IT firms are going to face another major setback as a new bill has been proposed to curb the hiring through the H-1B and L-1 visas. This move by the US government would erode the profitability and competitive edge of many small and big Indian firms who have offices in USA. On April 23, 2009, US senators- Chuck Grassley and Dick Durban, proposed the bill.

The new bill stops IT firms, that already have H-1B and L-1 visa holders, comprising more than half of its office staffs, from hiring further employees through the H-1B and L-1 route. Senator Chuck Grassley and Dick Durban introduced this new law with an end to “root out fraud and abuse and ensure that Americans are give every consideration when applying for jobs.” In October 2008, the US Citizenship and Immigration Services (USCIS) released a Benefit Fraud and Compliance Assessment report which revealed the violation rate is more than a 20% by the companies that use the H-1B visa programme.

Currently, there are several big Indian IT firms that have either branch offices or subsidiaries in USA, where H-1B and L-1 visa holders are working. This new legislation, if passed, would seriously affect their profitability as they would have to hire US citizens or green card holders and pay more money to them.

The main problem for Indian IT sector is that it is heavily dependent on USA. Till date, US accounts for about 40% to 60% revenue earned by most of the Indian IT firms. The H-1B and L-1 visas are non-immigrant visas.


Read more: http://www.southasiablog.com/2009/06/new-h-1b-and-l-1-legislation-bleak.html

---

but, but, I thought H-1b helped keep outsourcing away?

amazing how their own press reveals what a lie this is

[Raster]

1. The H-1B visa program is designed for one thing and one thing only:

to bring cheap IT workers into the US so that corporations can skimp on paying a proper, livable wage to IT workers.

[LiberalEsto]

2. AMEN!

You are so right.

Hats off to Durbin and Grassley on this one!
I just hope they haven't left any loopholes in this legislation.

[mule_train]

7. whether there's loopholes or not, this bill flushes out the truth

h-1b propagandists have always sold this slime program as helping hold off outsourcing, when in fact it does just the oppossite

the opposition to this bill documents this

[sledgehammer]

10. Sort of...

The H-1 program was designed way back in the 1950s, at a time when IT wasn't even really a concept.

But yes, many companies have abused it in the last two decades to create a discount IT meat market, especially through body-shopping (abuse is estimated between 20-30%). That abuse needs to end yesterday. Durbin-Grassley is the first step towards that. More will be needed.

I know DU is vehemently anti-H1 in general. I can see where DUers are coming from because H-1s do affect the US job market (just like any immigration program that America is built on - family/spouse sponsorship, refugees/asylees, student visas, diversity visa lottery, investment visa, etc.)

But at the same time, it's amazing how silent DUers are about the negative impact of illegal immigration. We're talking millions of jobs, massive impact on livable wages, no taxes received in return, huge stresses on infrastructure, and, oh yeah, totally illegal.

Might be a socioeconomic (blue collar vs white collar) thing. Who knows. Whatever it is, I just don't see very many threads on DU criticizing illegal immigration and demanding/supporting tighter restrictions to curb it.

[cascadiance]

13. Hey, I also have a problem to H-2B as well as illegal immigration as well!

Now, some of my best friends are Indian workers here, and I have nothing against them personally, and actually enjoy working in a diverse work force. But the model with H-1B and H-2B, as well as looking the other way when we have Illegal EMPLOYERS (as Thom Hartmann says the problem should be described), who seek to hire workers illegally without enforced prosecution of such actions, is not a sustainable model that only seeks to benefit those companies/individuals that hire these foreign workers cheaply (whether it is through H-1B, H-2B, outsourcing of jobs in general, illegal immigration, etc.).

If foreign workers want to immigrate here to become citizens, or are seeking asylum from situations that are hostile to them in other countries, that's one thing, and that's where we should have an open door, but for those that just want to come here "for a while" and "get their nest egg" for a few years to build up a retirement for their family back in India and move back there once they've done so at our expense here as workers, I can't accept that kind of work happening as sustainable. We should find ways for these people to organize globally and demand that they have sustainable wages, jobs, etc. back in their home countries to live reasonable lives instead of them feeling they have to do so by coming here.

This is not only better for both foreign and domestic workers to work near their families and have reasonable lives where they live, it also helps us environmentally prevent the shift of so many people globally that hurts climate change issues too. And when companies try to make food or other goods all in one place by outsourcing to another location, and then shipping the goods back here, they also are contributing to global warming as well as taking away our jobs.

If you look up H-2B, you can see even worse abuse to imported workers who were *trapped* here to work as cheap labor to rebuild New Orleans, instead of hiring the people of New Orleans to build that city back up. That was also inexcusable and perhaps even worse than what we have with H-1B, where most of the foreign workers at least earn enough to arguably have more control over their situations than those that came here under H-2B.

http://www.splcenter.org/news/item.jsp?aid=309

In short:

1) H-1B, H-2B programs need MASSIVE overhauls if not being shut down altogether. Sounds like Durban and Grassley are at least tackling the first program. Wish Grassley would have as decent a notion on single payer health care as he has with this legislation.
2) American or multinational companies that move jobs overseas or hire already from overseas exploitation shops should not get ANY tax breaks from us, and should in fact start getting measurable tax penalties based on the amount of foreign labor they employ over there.
3) We need some major enforcement increases and increasing of legal penalties against illegal hiring of undocumented workers here.
4) We need an overhaul of the so-called "free trade" agreements that allows a lot of the race to the bottom to occur unchecked, and allows things like the WTO to subvert our laws that are in place to protect our own work force or the world's environment to reward these companies instead.
5) We need to overhaul the farm subsidies currently in place that our agricultural companies (NOT family farmers that most of these subsidies were originally designed for) to in effect DUMP many of our agricultural products such as corn and HFCS-sweetened products amongst other things in other countries, that force foreign farmers out of business, disrupt their economies, and create the conditions that allow us to exploit those workers that had been used to a local farm economy to have to work for those corporate slave job shops, or to try and come here to get work instead.
6) Not only do we need to overhaul our own union system with the passage of EFCA here, we also need to find a way to help unions organize globally to protect those overseas and demand both better work and environment conditions there, so that there is no "bottom" for these exploiting companies to "race to" any more, and will allow people to live in their own countries, work locally, and prevent the destruction of our planet with the artificial notion that we should massively export human resources as well as goods and services around the world in a massive scale that adds to the climate change problem.

And as an unemployed tech worker, I need a job now too which I'm hoping that tightening the clamp on H-1B visas will do as well. America needs to make use of domestic workers' efforts instead of continuing to feed them unemployment while allowing companies to hire cheaper workers from overseas instead.

I'm collecting unemployment soon from California, even though I currently live in Oregon, as I suspect many who have "escaped" California's toxic cost of living circumstances have done over the last year or so and still get caught in the layoffs that affect all states now. It is inaction on these fronts that will have states like California and their unemployment funds go bankrupt soon.

[sledgehammer]

14. Thanks for your awesome response!

I really appreciate that you can discuss this contentious issue with such reason and calm.

I do agree with massive overhauls in all immigration programs. And agree with a lot of what you say. Wouldn't agree with shutting programs down altogether though. But curbs on quotas, monitoring fraud abuse, etc. Yes, absolutely!

And you are totally right about illegal employers! That's what the target needs to be. Whether it's IBM or Perdue chickens, employing people illegally and/or unethically is wrong.

Still, my concern remains that I do see a lot of threads on DU about H-1B (a bit of it even Lou Dobbsish), but rarely do I see anything on illegal immigration. If you asked me which is the greater problem to the American economy, I would say the latter by a wide margin. Perhaps it's just me though who thinks that way though.

Thanks again to your well thought-out response!

[cascadiance]

15. It's too easy to demonize foreign workers, when they are interested in the same things we are!

They want to have a decent living, and freedom for their families too, and that is why many of them come here, whether under the auspices of H-1B, H-2B, or as illegal immigrants.

It is also important to recognize that the status quo is UNSUSTAINABLE. Whether or not we want to help these people, it can't be just "opening up the doors" for people to come in and out of here to work and not be citizens that want to build our own country and make sure that it's middle class is healthy and thrives.

So, just say NO to the Lou Dobbs influenced types that try to demonize foreign workers as the cause of all of these problems in what many would call racist and xenophobic in its nature. I cannot accept that sort of attitude towards my fellow human beings, whether they be Americans or other citizens. It's too easy to get swallowed into that if many who are affected by layoffs don't see the big picture. They tend to blame those that they see as taking their jobs and this fuels any xenophobic or racist tendencies they might have, without knowing the real cause of them losing their jobs.

Also though, just say NO to those that don't want any controls, and allow the current situation to get worse, and our companies to continue to exploit more and more cheap labor here and elsewhere at our middle class's expense.

This isn't a binary choice like we've been herded into in the past. There should be a third option of focusing on removing the "bottom" that these corporate entities race to, and to empower workers globally to live and work locally that treats them fairly and protects the environment around them as well.

Where H-1B can be useful is if it is used as it was stated to be used, that could be employed with a VERY low quota, especially if our educational system is responsive to make sure our own work force is well trained for the needs of its employers as well. H-1B should ONLY be used, and it should cost companies MORE to hire workers that have certain skill sets that can't be found here locally. In other words, instead of having to go through the hassle of getting foreign workers citizenship, or having to work remotely, if they have a set of skills that can't be found with our own residents (whether it is a unique combination of language skills along with certain technical skills or something else), then it can be used to help companies staff their companies with such needed expertise. For those situations, I would expect companies to be willing to pay MORE to hire such individuals if they have truly a needed set of work skills and aren't just trying to get common sets of work skills at cheaper wages.

And also, perhaps, we should find ways to make the immigration process more sane too, to allow people to temporarily work here while they're waiting for their requests for citizenship to happen, and that those processes, except where it pertains to security be streamlined so that it is truly a decent screening process, and not one filled with intentional red tape. I personally have known some friends that went through this, that despite having extenuating circumstances, like them having a brother who was a naturalized American citizen married to an American, and becoming married to an American themselves, having to go through a few years of pain of having to work under the covers questionably while their citizenship papers were being worked on.

The bottom line is, that if you want to become a part of this country and participate in it fully by living here and having ones' family live here and vote in it to make sure its population is well represented, you are the kind of person I want coming here to work. I don't however want you just coming here to profiteer off of our economic system, which is going down the tubes because of excesses in this area.

[Deja Q]

16. Thank you for acknowledging it is at least being abused

Oh, I am against illegal immigration.

I will happily help legal immigrants. Always have, always will.

Illegal ones -- I'll put it this way: Don't get me started. Let's just say I have zero tolerance for them. Legal immigrants (and most of us born here) work our asses off for the common good of our country and the various companies we work for. There is NO place for leaches.

And until we're told it's going to be one world government or whatever, by official sources, most of us think "America first". That's just the way it is. Whatever happens in the future, we deal with it if or when it comes. That's not always easy given the gamut of human emotions, but we deal with it. Everybody does.



Now, to answer that part why DU is often silent, and at least for my POV as many around here have no concept of rules or regulations or expectations, I usually keep my mouth shut in this place because I choose my fights carefully. DU has lots of cliques; the mob mentality for offering perspective can be fatal. Though you'll find me on other forums, which have a wide array of viewpoints, and the cliquish little cretins aren't anywhere in number or influence. I can't speak for everybody, but I know I'm not alone. (For every 10 mobsters getting orgasmic over personal attacks, I get at least 1 PM supporting me and saying how they're too afraid to post because of the vitriol around here. The fun part is, I've remained civil but given the trolls in the neighborhood, I know when to let loose as well. No more sympathy.)

[sledgehammer]

35. Oh, H-1/L-1 has been abused

It's been abused big time. Especially between body-shopping and company "transfers". I have talked a lot about H-1s and have never denied the abuse. However, I believe controlling fraud and reducing quotas is a better solution than shutting the program down. But that's another whole discussion which I've had in the past and inevitably will do on other threads.

I see your point on the whole perspective thing. I just find the discrepancy between the attitudes toward H1/Indians and Illegal/Mexicans pretty startling. Denigrating and opposing the former is acceptable, encouraged, and will make you popular. Denigrating and opposing the latter makes you a racist.

Glad to know I'm not alone in seeing this discrepancy!

Thanks for your response.

[rockymountaindem]

20. Because on DU if you say you're against illegal immigration

a whole crowd of people will emerge to do everything short of calling you a racist, and insinuate that you think Mexicans don't deserve to eat.

[ChromeFoundry]

27. Absolutely!

I am strongly against the ABUSE of the H-1 and L-1 visa programs by companies (the visa holders are not the place where anger should be directed, but many of them sure don't help the matter by posting ill messages directed at out-of-work US IT workers)... and my disgust is equal in magnitude toward the recent strong push for amnesty for illegal immigrants.

This country was built on immigration when the country was GROWING... it's mot growing right now. Unemployment is extremely high, so there is no need for programs that add more people to a currently saturated environment.

[cascadiance]

36. The key is to explain that the current SYSTEM is f'd up, not those illegals that come here...

Always note that even though you don't want "open borders" that would bring down our wages and destroy our middle class, that you ALSO want to work hard at trying to fix the situations in other countries so that they don't feel the need to come over here to start with, and where they will ultimately be happier anyway, being closer to their families.

Read my post earlier in this thread for more details, but you CAN be against illegal immigration, and at the same time want to work to better the future of those trying to come over here to help fix this problem not only for us, but for them too.

If you qualify your posts with those sort of notes as well, and be sincere about it, then others will have a hard time rationalizing and simplifying your motives as being racist in nature, which I think most of us here aren't.

[OhioChick]

3. Bleak future? Cry me a fucking river.........

:nopity:

[SammyWinstonJack]

12. !

:thumbsup:

[Triana]

4. One would think that our gov't would be more concerned for the US IT industry than the Indian one

We CANNOT welfare the world, or save the world. Right now, we can barely save ourselves and every iota of effort needs to be put into just that. I see the limitation/elimination of importation of cheap labor as an effort to try and save our own economy - and without JOBS we cannot DO that. This is a necessity and I commend any politician that supports it. Kudos to Durban and Grassley.

India - is India's problem. Or, it should be. At least right now.

[mule_train]

11. our government only cares about the current highest bidder

we have the best government money can buy

[redqueen]

19. They are concerned about lining their own pockets.

If they were concerned about this country's welfare things would have been done a lot differently over the years.

[blue97keet]

5. This only proves that outsourcing firms are critically dependent on H-1B

and that H-1B is not about keeping jobs in the USA.

[denverbill]

6. Good news for a change. Kudos to Grassley and Durban.

Of course, you can bet your ass some 'free traitor' Democrats will oppose this as will most Republickers.

[NYC_SKP]

8. KICK! and rec... n/t

[mule_train]

9. the reason I oppose H-1b so strongly

maybe I could buy that globalism is inevitable and for the best, and that everyone else in the world is entitled to what we have, even if it means our losing it

but i'll never buy that we have to accept this being done to us, with LIES!!!!

H-1b propaganda, is a lie, stacked on top of another lie, wrapped up in one big fat stinking lie

[Mister Ed]

17. Overheard an interesting snippet of conversation at the coffee machine this morning

An Indian IT co-worker was talking on her cell phone, saying to the other person that she's worried because the Indian consulting firm she works for is now globalizing. I moved on and didn't eavesdrop. But I had to wonder: does this mean that as soon as U.S. outsourcing starts to create a better life for workers in India, the consulting firms just dump their Indian workers for someone cheaper?

[redqueen]

18. Not the consulting firms, the end client.

Which could be anything from retailers to airplane manufacturers.

They'll send work to China or Singapore or wherever they can pay the least amount.

[Skittles]

23. it's a hoot, Ed

a Brazilian offshore person was lamenting to me some of their work was going to Malaysia - not because they are better but because they are cheaper...I asked him, "HOW DO YOU THINK YOU GOT THE WORK FROM AMERICA IN THE FIRST PLACE?"

[anonymous171]

37. Globalization = Race to the bottom

Only the rich win, the rest of us lose.

[rufus dog]

21. I will have to research but see a potential loophole already

"The new bill stops IT firms, that already have H-1B and L-1 visa holders, comprising more than half of its office staffs, from hiring further employees through the H-1B and L-1 route."

I would like to see office staff defined. If is support staff for firms that place contractors then it is very easy to get around. Resources can be placed at a client site, which is typical, and the office staff needs to be less that 50% H1/L1. That is the case in most firms already where sales staff, payroll, recruiters are domestic, while 95% of the workforce is H1b workers. When a gig end they either get placed at another firm or are shipped back to India.

[ChromeFoundry]

28. They'll just give everyone a manager title with no direct reports. n/t

[Skittles]

22. India IT firms can fuck themselves

[EricSmith]

24. Indians Hate The Indian Outsourcing Companies

http://itgrunt.com/2009_06_01_datafiles_archive.html

Riaz,Qatar,says:I am sorry, I think Premji is wrong on this subject, by his own logic. He says, how can restricting 8,000 workers out of 2 million effect unemployment in US. Well then how can restricting 8,000 workers will choke US talent ? Americans achieve far more in 8 hours than Indians techies do working long hours. I have been on both sides of the border, so I know. I even worked at Wipro. The Americans constantly end up wasting time, training Indian techies, because in India techies do not stay in one job long enough to become masters

Tom,Seattle, WA,says:I really resent the common Indian man's point of view that an Indian in India works harder than an American works harder in America. This might be true for a few people but to make a generalization such as this is ridiculous. I have lived in India and in the United States and can comparatively say that life in the United States is much tougher than in India. The pay might of course be higher in the U.S. but that is because of the value of the U.S. dollar. As an engineer working for a Fortune 500 company, we work all year round and only get 2 weeks off a year compared to engineers who work in Europe and in India. We sometimes have to work 60-80 hrs a week to support our projects which can really take a toll on our personal lives. I would like to see a professional in India who matches that. Therefore before you state that Indians are willing to do a job that Americans do not want to do, please get your facts straight.

Dias Singh,London,says:My understanding of the Off-Shore model is that the people actually work from India and not abroad ? Another vital point is that India's trade with the US is so insignificant that the only losers would be India. Also India is no world leader or in any position to dictate trade policies. It is true like the previous readers have mentioned that most of the staff not only from Wipro are below average and are actually learning on the job. Furthermore their command of the English language is pretty poor both in written and oral form. Prmji should stop actually attempt to fool the vast number of educated Indians into flase pretences.

Nagaraj ,USA,says:All the big companies like Wipro, Infosys, TCS should go back and seriously think about developing some decent software products and compete in the open market, Mr. Premji. Stop whining. Stop becoming rich body shopping.


ajay,India,says:Premji is trying to be too cute( read oversmart) here Everyone knows the type of Employees TCS, Wipro, Satyam has. They are just making fool of these American Companies. American professioanl people are much more hard working than the Indians, any day! Get your facts right, Mr Premji!

Venkat,Texas, USA,says:I have to agree with ronJon on this one. Top Indian IT companies have gotten very greedy and the talent level that is being sent or given to projects is mediocre at best. Lack of professionalism is another big defect of several Indian developers coming on H1B. 8000 is very insignificant in the overall picture both on the US side and the Indian side. Premji and others need to step up the talent base if tehy want to compete.

Rajiv,Delhi,says:Mr. Premji, Indians are reponsible for misusing these visas to the core. There are over half a million nonqualified Indian techies have been dumped in the US in last ten years, most of them are unemployable in a good company even in India. Majority of them are not even engineers or technical graduates and have some sort of diploma from diploma mills e.g Aptech, NIIT and some third rate MCA's. You guys should have thought it earlier that this fraud can not go forever.

ronJon,USA,says:Talent?? The fact is most of Wipro's so called talent are very mediocre people and taking over american jobs en masse. There was a time in the 90s early to mid 90s when Wipro,Infosys, etc hired top talent. No longer.Nowadays their programmers are very mediocre. No wonder there is backlash from Americans. Wipro and others had this one coming.

- Link



R. Lawson , Florida , says: Dear Infosys, Wipro and Tata. And anyone left at Satyam: You had this coming. After years of discriminating against American workers - hiring a token few at your US operations - your actions are finally catching up to you. You lucked out with 8 years of Bush who was a corporate hack. But, your luck has run out. You deserve this. Had you done the right thing (you know, the ethical thing - look the word up since you probably don't understand what it means) you wouldn't be in this situation. You used an H-1b program designed to fill a shortage, and the L-1b visa which was designed for corporate executives to fill run of the mill IT jobs. You had no oversite, and plenty of legal loopholes. That's all coming to an end. Since we all know you paid your H-1b workers below market wages (and broke a few laws which may be discovered if the DOL decides to audit you), the cost of offshoring is going to go up when you are forced to hire people at market rates. Your unfair advantage is coming to an end. After watching your organizations rip the IT profession apart from its seams for the last 10 years, and turn it into a commoditized labor force, I can only hope the damage you have caused will one day be undone. I don't know who I blame the most. Unethical corporate executives who will rob their mothers if given the chance, or the politicians in our country who allowed it to happen.
<6 Jun, 2009 | 2112 hrs IST>

Sharad , USA , says: Great going Infosys. Hope you meet the same fate as Satyam.
<4 Jun, 2009 | 1909 hrs IST>

- Link

[undeterred]

25. Tough shit.

Go back to India.

[Obamanaut]

39. That's sorta cold and unwelcoming. nt

[OhioChick]

40. Understandable given this fact: (not to mention the fraud/abuse riddled within this program)

US: H-1B workers outnumber unemployed techies

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=103&topic_id=451653

[Cessna Invesco Palin]

26. Hooray!

No mores brown po' people is be tekkin are gawd given white peepul jawbs!!! Economic problem solved!!!

[rockymountaindem]

29. Case in point of what I said above

Thanks for proving me right.

[OhioChick]

32. Damn.....You did call it. n/t

[Cessna Invesco Palin]

33. Sorry...

I wasn't aware that immigrating ON A VISA was illegal.

[rockymountaindem]

34. And I guess I forgot that people sometimes play the race card

even when you're just talking about restricting the number of visas.

[Cessna Invesco Palin]

38. Do you have some kind of reading comprehension disorder?

Because on DU if you say you're against illegal immigration a whole crowd of people will emerge to do everything short of calling you a racist, and insinuate that you think Mexicans don't deserve to eat.

That is the quote referenced, by YOU, upthread. We are talking here about people who immigrated LEGALLY. ON A VISA. Not illegal immigrants. But I guess it's all the same to some people.

[ChromeFoundry]

30. Easier to type when head not in ass...just sayin n/t

[Name removed]

31. Deleted message

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