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.
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 (www.nomoreh1b.com), 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.
PROGRAMMERS EARN LESS
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.
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.
INTERPRETATIONS VARY
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.
ATTORNEYS CAN'T AGREE
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.
