int'l labor mobility/protection rents

[Ian Murray <seamus2001@xxxxxxxxx>]

[NY Times]
May 30, 2003
Special Visa's Use for Tech Workers Is Challenged
By KATIE HAFNER and DANIEL PREYSMAN


SAN FRANCISCO, May 29 - With the economy in a slump, a growing number of
American technology workers say their jobs are going not only to
lower-cost foreign workers abroad, but also increasingly to workers who
enter the United States under a little-known visa category known as L-1.

In the nearly three years since the technology bubble burst, the use of
L-1 visas to bring in workers - with a large percentage from India - has
become a popular strategy among firms seeking to cut labor costs. The
number of these temporary visas granted rose nearly 40 percent to 57,700
in 2002 from 41,739 in 1999.

The visas are intended to allow companies to transfer employees from a
foreign branch or subsidiary to company offices in the United States. But
they are now routinely used by companies based in India and elsewhere to
bring their workers into the United States and then contract them out to
American companies - in many instances to be replacements for American
workers. The number of Americans who have been replaced by foreign
contract workers is unknown. American companies that use contract workers
have said that the decision to do so is based on factors like skills, and
not on cost alone.

Some immigration experts are questioning the legality of this use of the
visa. Officials at the Bureau of Citizenship and Immigration Services, or
B.C.I.S., a division of the Department of Homeland Security that oversees
the granting of L-1 and other work visas, say the bureau is conducting an
assessment of the L-1 visa to determine whether there is misuse.

"If this is a company offering the services of their employee to go work
for another company, it sounds dubious," said Bill Strassberger, a
spokesman for B.C.I.S.

"To bring someone in ostensibly as an intracompany transfer and then put
him to work for somebody else and then to say that we're paying him still,
that just sounds like someone's trying to really stretch the envelope on
that visa category," Mr. Strassberger said.

The legal questions, however, remain murky. Steve Yale-Loehr, who teaches
immigration law at Cornell, said that strictly speaking, what these
companies are doing is legal, though perhaps not what Congress intended.
However, Mr. Yale-Loehr added, "If Congress is upset about this, then
Congress will act on it."

In response to the controversy, Rep. John L. Mica, a Republican from
Florida, introduced a bill this month to prevent companies from hiring
foreigners with L-1 visas.

"When you have people using this to bring in lower-cost labor to displace
Americans, it's something we need to address," Mr. Mica said in a
telephone interview.

During the boom years, the technology industries successfully lobbied
Congress to expand the number of foreign software engineers who could be
permitted to fill programming needs in the United States. In 2000,
Congress increased the annual cap on more restrictive temporary visas -
known as H-1B visas - for highly skilled foreign workers to 195,000 from
115,000. That quota will drop automatically to 65,000 on Oct. 1 unless
Congress approves an extension, a move that is considered unlikely.

In the last two years, the trend in the use of H-1B visas has declined
sharply. Many experts say the use of L-1 visas will grow.

Unlike the H-1B visa, the L-1 does not require employers to pay workers
prevailing wages. In addition, there is no cap on the number of L-1 visas.

This has ignited an outcry among technology workers who have lost jobs and
say that foreign contract workers are paid substantially less than
prevailing wages in the industry.

Over the last three years, William O'Neill has seen his small computer
consulting firm in East Granby, Conn., dwindle from six contract workers
to none. The work itself has not disappeared, said Mr. O'Neill, but his
clients, most of them large insurance companies in Connecticut and western
Massachusetts, are turning to foreign companies, some with workers who are
in the United States on temporary visas. Satyam Computer Services, a
consulting firm based in India, for example, now has a contract with the
Cigna Corporation that has around 100 Satyam employees working on computer
applications management in Cigna offices.

And as others have claimed, Mr. O'Neill said that in many cases, existing
technology employees are asked to train their replacements. The L-1 visa
requires that the foreign workers possess specialized knowledge of the
work to be done.

Mr. O'Neill said that the people he knows who are currently training their
replacements will not talk about their situation for fear of losing what
is left of their jobs. "They're scared to death they're going to lose
their jobs instantly versus six or eight or nine months down the road," he
said.

Once the replacement workers are trained, Mr. O'Neill said, the foreign
workers are often sent back to India to do programming and computer work
there for the American companies.

Wipro, InfoSys and Tata Consultancy Services, all of them based in India,
are other companies that are using L-1 visas to get workers into the
United States.

Girish Surendran, a human resources manager who oversees immigration
issues at Tata, said his company "is committed in letter and spirit to all
the requirements and regulations of all visa categories." He added: "If
workers are replaced, it's not that T.C.S. comes in and employees get let
go." Mr. Surendran said he could not comment on a company's reason for
laying workers off.

Wipro plans to lobby against Mr. Mica's bill. If it becomes law, said
Sridhar Ramasubbu, investor relations manager at Wipro, the company will
simply turn back to H1-B visas. "We will not be affected financially
because our compensation is the same whether somebody comes in under an
H-1 or an L-1," Mr. Ramasubbu said.

But trade groups representing American workers say the foreign workers are
paid considerably less. "I have friends that were told in the last three
months that they must take a $30,000 pay cut to keep their job," said John
Bauman, president of the Organization for the Rights of American Workers,
a nonprofit group based in Meriden, Conn.

Gary Burns, the legislative director for Mr. Mica, said there were about
325,000 L-1 visa holders in the United States. Those who stay in this
country can remain for up to five or seven years, depending on the
category of L-1 they hold.

Some experts say that the use of L-1 visas for contract workers is not
widespread and that fears of losing jobs to foreign workers are
exaggerated.

"Even if this brouhaha is about a real problem, I think when you look at
the number of workers involved, it is a totally insignificant drop in a
massive labor market," said Daryl Buffenstein, a immigration lawyer in
Atlanta who has corporate clients and is general counsel for the American
Immigration Lawyers Association.

Mr. Buffenstein said that those who oppose the L-1 visa do not understand
how important it is for American industry. "It will hurt employment in the
United States if we impede the ability of legitimate users to transfer
managers and specialists between different affiliates of international
organizations," said Mr. Buffenstein, a lawyer who advised legislators on
the law governing L-1 visas.

Mr. Buffenstein said he was also worried that public overreaction would
result in measures like the Mica bill, which he contended would go too far
in restricting international companies from using L-1 visa holders to do
on-site client work.

Controversy over the visa, which has been in existence for 33 years, is
not entirely new. Three years ago, the General Accounting Office reported
that the the Immigration and Naturalization Services, the precursor to
B.C.I.S., had found a high incidence of fraudulent use of L-1 visas and
had called abuse of the visas "the new wave in alien smuggling."

But protest over the use of temporary foreign workers has become more
vocal in a rocky economy. One 57-year-old computer consultant in Avon,
Conn., who has been out of work for five months said, "This isn't just an
I.T. issue," referring to the information technology industry.

"It's a big issue with multiple professions, and has a serious effect on
the economy," said the consultant, who asked that his name not be used for
fear of jeopardizing his chances to find work. "A lot of this is about the
economy and the L-1 issue is just exacerbating the problem."