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Is H1B misused by Indian/US outsourcing firms?

Disclaimer

This post represents my personal views on a strongly controversial topic. First, my employer, Sun Microsystems cannot be held responsible for whatever I have mentioned here. Second, this post is mainly influenced by the letter from the Senators available in the open domain and any dispute to the post should not be addressed to me. I will make sure that I will update this post if and only if I know about the response given by these companies to the letter.

On May 16, two US Senators, Charles E. Grassley (Republician) and Richard J. Durbin (Democrat) questioned about the suspected misuse of H1B visas by the outsourcing firms (mainly Indian) like Infosys, TCS, Wipro, Patni, etc. H1B visas are mainly intended to improve the competitiveness in the workforce and they should be used when there is no US workforce available to fill those vacancies. However, it is evident that the outsourcing companies use this visa for a different purpose. They mainly use this visa to facilitate the outsourcing of jobs from US to offshore. This really is a genuine concern and the outsourcing companies are bound to answer this.

The H1B visa holders from such companies are mostly posted on the client site and there is a major complaint that they receive lesser than the prevailing wages. Also the employer is not trying to fill the position using US workforce before they try to hire a H1B candidate for that. This should never be entertained because of the fact that it doesn't really to any value add to the competitiveness of the workforce. When there is a lot of requests coming in from companies like Microsoft to increase the H1B quota, it appears that 20000 (around 30%) of H1B visas are used by the top 9 Indian outsourcing firms. If one adds the number from US outsourcing firms who have major presence in India(like Accenture and CTS), the count is going to be still higher.

Here is the letter issued by the Senators to Infosys.

May 14, 2007

Mr. Nanden M. Nilekani Chief Executive Officer Infosys Technologies Limited 6607 Kaiser Drive Fremont California 94555

Dear Mr. Nilekani:

As members of the Senate Judiciary Committee Subcommittee on Immigration, Border Security and Refugees, we have a responsibility to oversee and evaluate our country's visa policies. We have been concerned about reported fraud and abuse of the H-1B and L visa programs, and their impact on American workers. We are also concerned that the program is not being used as Congress intended.

While some Members of Congress have focused on increasing the annual cap of the H-1B program, we believe it is important to understand how H-1B visas are being used by companies in the United States. We have received helpful data from the U.S. Citizenship and Immigration Service with regard to H-1B visa approvals in 2006 for the top 200 participating companies. Your company was one of the top companies on the list. Therefore, we are requesting your cooperation in providing additional statistics and information on your use of H-1B visa workers.

First, some groups, such as the Programmers Guild, have analyzed the wages paid to H-1B visa holders. They have found that the average annual salary of foreign workers is significantly lower than that of new U.S. graduates.

Second, a number of consulting firms reportedly recruit foreign workers and then outsource the individuals to other job sites or companies. Many of the top 20 companies that used H-1B visas in 2006 are firms, such as yours, that specialize in offshore outsourcing.

Third, a number of firms have allegedly laid off American workers while continuing to employ H-1B visa holders. The American people are concerned about such lay offs at a time when the demand for visa issuances and the recruitment of foreign workers appear to be increasing.

Because of these concerns, we seek your cooperation in answering the following questions:

NUMBERS

How many United States citizens do you employ in the United States?

Is your company an H-1B dependent employer?

How many visa petitions did you submit to the Citizenship and Immigration Service for Fiscal Year 2007?

Of the total number of petitions requested, how many have been approved for Fiscal Year 2007, if known?

How many H-1B visa holders is your company currently employing? What percentage of your total workforce are H-1B visa holders?

What is the average age of the H-1B visa holders that your company currently employs?

What is the average number of years of experience of your employed H-1B visa holders?

Please describe your efforts to recruit Americans for the positions for which you employ H-1B workers.

WAGES

What is the average wage of your company's H-1B visa holders? What is the median wage? What is the highest and the lowest salaries for those H-1B visa holders currently employed by your company?

What is the average wage of your company's workers who are United States citizens in the same occupations?

OUTSOURCING

Of the 4,908 visas your company received in 2006, how many of those workers are currently employed and paid by Infosys Technologies Limited?

Of the 4,908 visas your company received in 2006, how many were outsourced to other companies and how many employees' salaries were paid for by a firm other than Infosys Technologies Limited?

LAYOFFS

Has your company experienced any layoffs in the United States in the past year? Any layoffs in 2005? If so, how many people lost their jobs?

If your company has laid off workers in the United States, what job positions were part of that layoff?

If your company has laid off workers in the United States, how many of those workers were H-1B visa holders?

If your company has laid off workers in the United States, did any H-1B visa holders replace those dislocated workers, or take over any of the laid off employee's job responsibilities?

We appreciate your cooperation, and respectfully request that you respond to our questions no later than May 29, 2007.

Sincerely,

Charles E. Grassley United States Senator

Richard J. Durbin United States Senator


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