NASSCOM's claim that only "small Indian companies" abuse H-1b visa is absurd

Last month U.S. Senators Durbin and Grassley wrote a letter to nine of the top Indian outsourcers regarding their use of H-1b, such as their wages, age of workers, number of U.S. citizens on staff, and their efforts to recruit Americans. To our knowledge none of the receipients have responded to the questions posed in that letter.

Instead the National Association of Software and Service Companies (NASSCOM) issued a statement that "there is little evidence of such fraud, or that restricting the number of H-1 B visas . . . will have any effect on visa fraud."

NASSCOM is being less than honest to the U.S. Senate - they have ignored the questions and raised the Red Herring of "fraud." The NASSCOM Executive Council is a "who's who" of Indian outsourcing firms, comprised of leaders of I-flex, Infosys, Wipro, HCL, and Mr. N Chandrasekaran, Executive Vice President of Tata Consultancy Services (TCS)

TCS is the number one user of combined H-1b and L-1 visas, with nearly 8000 applications in FY 2006.

We have already reported that TCS has boasted that it pays its H-1b workers 25% below market wages, and this this underpayment was its competitive advantage against American firms and U.S. workers.

While about half of TCS business is in the U.S., only about 1000 of their 90,000 employees are Americans. (Meanwhile TCS is planning to hire 5000 workers in Mexico, to assist with Perot's "giant sucking sound" of jobs.)

We also know that the thousands of TCS employees on L-1 visas can work in the U.S. for up to a year while still getting paid their foreign wage - $20,000 per year or less. These Mexicans that TCS is hiring will provide them an additional source of foreign workers that TCS can rotate into U.S. jobs and continue to pay them third-world wages, without the expense of international air fare.

Senators Durbin and Grassley have compiled a 354 page list of L-1 visa users. TCS is on top. They are asking the top users about their usage. We expect another Red Herring response from NASSCOM about "no fraud," avoiding whether they are displacing U.S. consulting firms that pay American wages by bringing in thousands of average skilled staff programmers on L-1 while paying them third world wages.

Congress: How is it not unfair competition to allow consulting firms to pay third world wages at U.S. jobs sites by rotating in workers from foreign sites? Might this be creating an incentive to NOT hire U.S. workers for U.S. jobs?

A large user of L-1 visa is Intel. During the same period that Intel in Folsom, California was laying of its American IT workers, I heard from multiple Indians on L-1 at Intel in Folsom that they and many other L-1 workers were not brought in for their skills. Instead they were new hires in India being brought to the U.S. for training, then would return to India to ramp up Intel operations there. U.S. training may be necessary since Intel blames the Bangalore division for botching the Whitefield Xeon processor project a few years ago.

Meanwhile the stress of being forced to lay off highly skilled Americans led to the suicide of a top manager at Intel Folsom in 2003. As Intel brings in foreign workers, they do not even attend career day at nearby CSU Sacramento.

While under the “spirit of the law” TCS is a bodyshop, and thus all of its employees “provide labor for hire for unaffiliated employers," it appears that under the letter of the law TCS can continue to second-source L-1 workers by a) assuring that the L-1 reports to a TCS employee, and b) assuring that the TCS employee is providing a service related to a contract that TCS holds with the client:

L-1 Visa Reform Act of 2004, signed into law December 8, 2004

SEC. 412. NONIMMIGRANT L-1 VISA CATEGORY.(a) IN GENERAL- Section 214(c)(2) of the Immigration and Nationality Act (8 U.S.C. 1184(c)(2)) is amended by adding at the end the following:

(F) An alien who will serve in a capacity involving specialized knowledge with respect to an employer for purposes of section 101(a)(15)(L) and will be stationed primarily at the worksite of an employer other than the petitioning employer or its affiliate, subsidiary, or parent shall not be eligible for classification under section 101(a)(15)(L) if—

(i) the alien will be controlled and supervised principally by such unaffiliated employer; or

(ii) the placement of the alien at the worksite of the unaffiliated employer is essentially an arrangement to provide labor for hire for the unaffiliated employer, rather than a placement in connection with the provision of a product or service for which specialized knowledge specific to the petitioning employer is necessary.

See INA § 214(c)(2)(F), 8 U.S.C. § 1184(c)(2)(F), as added by Pub. L. No. 108-649, Sec 412(a).

Microsoft, Oracle, and Google demand that H-1b remain a source of cheap labor

Microsoft, Oracle, and Google are lobbying the Senate for an increase in the H-1b visa quota, arguing that they have thousands of job openings that they cannot fill with Americans. But is that the true motive?

The DOL prevailing is split into four levels, with level one being about the 17th percentile of what average Americans are paid for the same job classifications. Currently most H-1b use the level one wage. Senator Durbin sponsored an amendment whereby only 30% of the H-1b at any company could be paid at level one. (The remainder could be paid at level two - which would still be below average.)

Oracle's vice president Robert Hoffman, who speaks for CompeteAmerica, opposes the amendment. "Thirty percent is an artificial barrier," said Hoffman.

Why does Hoffman oppose the amendment? Here are the DOL wages for Computer Programmer in Los Angeles:

• Level 1 Wage: $21.59 hour - $44,907 year
• Level 2 Wage: $27.88 hour - $57,990 year
• Level 3 Wage: $34.18 hour - $71,094 year
• Level 4 Wage: $40.47 hour - $84,178 year

The wage for an average-skilled American computer programmer in Los Angeles is over $64,000 per year. Yet Oracle objects to having to pay their H-1b workers more than $44,907.

How do we know that Microsoft, Oracle, and Google do not need H-1b due to a labor shortage?

According to the Wall Street Journal, Microsoft received résumés from about 100,000 graduating students in 2004, screened 15,000 of them, interviewed 3,500, and hired 1,000. Microsoft receives about 60,000 résumés a month for its 2,000 open positions.

Working at Google is among the top choices of U.S. graduates, flooding Google with 1300 resumes per DAY.

YouTube-Gate: Cohen & Grigsby train how to NOT hire qualified Americans

For those under age 40, "YouTube-Gate" is a twist on the Watergate scandal that brought down President Nixon. Our objective is that Congress end these H-1b, PERM, and related employment-based immigration scandals by revising the statutes to provide true protection for U.S. workers.

Our five-minute YouTube of an immigration seminar by the law firm of Cohen & Grigsby has received over 80,000 hits on YouTube, and resulted in major media coverage. The video prompted Senator Charles Grassley and Congressman Lamar Smith to write a letter to Labor Secretary Elaine Chao to investigate whether U.S. companies are abusing the H-1B visa program.

Today we documented that three of the eight IT classified ads in the Pittsburgh Tribune-Review today are suspect fake PERM ads. (We need a hard-copy of the June 24th Philadelphia Daily News.)

We also expose the Cohen & Grigsby client companies that are running the fake job ads. The client with the most H-1b processing is foreign outsourcing firm Hexaware. These H-1bs harm the U.S. economy by facilitating the transfer of U.S. jobs and technology overseas. And Congress has an obligation to suspend laws that harm our country.

Prevailing wage? In their second video Cohen & Grigsby cite the "prevailing wage" requirement of H-1b. The majority of H-1b programmers use the Level One prevailing wage. The Level One prevailing wage for Lawyer in Philadelphia is $24.75 hour! I doubt that the attorneys in this video would contend that wage would protect them from displacement.

TIP: This website http://video.qooqle.jp/dl/ is one of many that allows you to download YouTube videos. (This is how we grabbed these training videos before the law firm removed them.)

Immigration attorney Philip Boyle argues that H-1b puts upward pressure on the salaries of U.S. software professionals (we respectfully disagree)

In his commentary "In My Turn: Immigration reform -- Vermont style," immigration attorney Philip Boyle make the outrageous claim that the H-1b program actually increases the wages of U.S. software professionals, writing:

"H-1B workers must be paid prevailing wage or better. Hence, these workers have a positive impact on wages which a tax would thwart."

If Philip Boyle is sincere - which, as an attorney is highly unlikely - then he should advocate for flooding in foreign immigation attorneys into Vermont. After all, the Level One DOL prevailing wage (which is applied for most H-1b applications) for LAWYER of $25.65 hour - $53,352 year would certainly put upward pressure on his meager salary.

The reporters at the Burlington Free Press should also rally for more H-1b reporters, as their DOL prevailing wage of $12.65 hour - $26,312 year would put upward pressure on their salaries.

By far largest user of H-1b in Vermont in 2006 was iTech. iTech LCA wages are here – as low as $36,000 minimum BS degree and specialized knowledge. iTech made the Programmers Guild “lowest paid” list. ITech is owned by an immigrant from India and is engaged in shipping work back to India, the same as the firms that have yet to respond to the Durbin/Grassley inquiry.

Boyle argues that the H-1b cap should be raised because H-1b is used to hire new grads from Vermont universities. But not one of iTech’s openings is for new grads – all require at least 2+ years of experience.

(Boyle ignores an alternate solution of giving H-1b preference to U.S. grads - or to eliminate H-1b entirely and allow supply/demand forces to draw more Americans to pursue advanced degrees – that same force that draws sufficient Americans to pursue law degrees.)

The reason iTech uses H-1b is not because no Americans are available, but rather because they hire disproportionately Indians from India – not graduates from Vermont colleges, as Boyle alleges. (Of the 80 iTech green card certifications in 2005 and 2006, 77 were for workers from India.)

iTech is second only to Goldstone Technologies in 2000-2006 LCA filings in Vermont. Goldstone is an Indian company that uses H-1b because they don’t hire Americans. (On p.22 of John Miano’s study he found that Goldstone wage are $12,000 below Expected OES wages.)

Here is an ITECH AD TO HELP PROCESS THEIR EMPLOYEES’ GREEN CARD APPLICATIONS. This person will administrate the PERM job ads that reject qualified American job seekers, as explained by the immigration lawyers in the Cohen & Grigsby video. PERM ads are described at www.programmersguild.org/RIR/

Philip Boyle does not care about Americans getting American jobs because he only profits when American jobs get filled by foreigners. If he truly belived that flooding in H-1b workers would boost wages rather than displace Americans, he would be calling for more H-1b within his own profession. As it stands, we call him "Liar Liar."

Patni Computer Systems H-1b settlement fails to compensate American Worker victims

As reported by AHN Media Corp:

Patni Computer Systems Inc. has agreed to pay $2.4 million in back wages as part of a settlement with government authorities who claim the company underpaid employees recruited under the H-1B employment visa. . . Patni is one of the nine IT companies that U.S. legislators last month asked to explain their use of the H-1B visa. The issue with wages is that under the H-1B work visas, companies are supposed to pay the workers it brings into the country the prevailing U.S. wages for those jobs so that foreign labor doesn't unfairly compete with American labor for jobs. The company, which has about 13,000 employees, was awarded 1,391 H-1B visas in 2006.

MATH REALITY CHECK: $2.4 million / 13,000 = $185 per employee. This is an insignificant penalty for Patni, which earns $350 million in annual revenue.

PATNI IS A BODYSHOP: They produce nothing of value. Instead they displace American workers at American companies. According to their July 2006 SEC filing:

“We derive a significant portion of our revenues from a limited number of clients in a few select industries. In 2003, 2004 and 2005 our largest client and one of our principal shareholders, General Electric, accounted for 41.2%, 31.7% and 22.1% of our revenues and our second largest client, State Farm Insurance, accounted for 17.4%, 14.9% and 11.5% of our revenues.” . . . Our attrition rates have been high due to a highly competitive labor market in India. . . . We are currently cooperating with the US Department of Labor with respect to compliance matters related to our past and present labor practices. We estimate the liability to be up to $2 million. . . . Most of our employees are Indian nationals. The ability of our software professionals to work in the United States, Europe and in other countries depends on our ability to obtain necessary visas and work permits. As of December 31, 2005, a majority of our software professionals in the United States held H-1B visas . . Wage costs in India have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals, which has been one of our competitive strengths. . . Presently, we benefit from the tax holidays given by the Government of India forthe export of IT services from specially designated software technology parks and special economic zones in India.”

According to eWeek the settlement will go to only 600 Patni employees: "The department is committed to vigorously enforcing the H-1B provisions that guard against employers undercutting American workers by underpaying temporary foreign workers," said Secretary of Labor Elaine L. Chao, in a statement.

If true, then what about the other 12,400 employees? The LCA database reveals that Patni has applied for over 13,000 H-1b workers, with median wage of $45,000. That means that 6000 Patni “best and brightest, BS degreed and highly skilled” are earning less than $45,000 salary.

The real victims were the 13,000 American workers who were displaced by Patni’s unfair competition. The U.S. Congress has known for the past decade that the H-1b program is displacing U.S. workers, that the prevailing wage is a sham, and that there is no requirement to not displace qualified U.S. workers. Congress has compensated the Japanese interned during WW II. When will U.S. tech workers receive similar reparations from Congress?

When has Elaine Chao ever acted on behalf of displaced U.S. workers? In every H-1b abuse case, and reimbursement goes to the foreign workers, ignoring the collateral harm to U.S. workers.

The Programmers Guild identified Patni as #27 on the list of the lowest-paying H-1b employers. When will Chao go after the top 25?

Letter to Governor Schwarzenegger objecting to his support for an H-1b increase

(Hand-delivered to Governor’s office June 6, 2007)

June 5, 2007

Dear Governor Schwarzenegger, (916-445-2841)

Among your key campaign promises was that you would represent the People of California rather than bowing to special interests.

But yesterday in your letter advocating for an increase in H-1b visas you violated that promise. I challenge you to disclose the source of that letter, which is a clear promotion of the special interests of the American Immigration Lawyers Association, foreign consulting firms, and billionaire CEOs.

1) By advocating for retention of "an employment-based application process" you are supporting the current flawed system where employers are able to hold H-1b workers as indentured servants while they sponsor the workers' green card applications. I witnessed NEC Roseville IT department specifically seek out H-1b candidates after two of their DBAs left for better opportunities at Intel Folsom. Do you support freedom or indentured servitude?

2) By advocating that the H-1b quota "must be based on the demands of the market" you are driving California workers and consulting firms out of business: The largest users of H-1b are Indian consulting firms. Last fall Tata Consultancy Services (TCS) boasted, "Our wage per employee is 20-25 percent less than US wages for a similar employee," explaining that the underpayment gave them their competitive advantage over American workers and the American firms who employ them. Do you support more H-1b for Indian consulting firms that displace Americans with $38,000 wages?

3) H-1b allows employers to hire foreigners even when qualified Americans are available. The California Department of Transportation (CALTRANS) has sponsored dozens of H-1b workers, even as U.S. Citizens were waiting and reachable on the civil service list. Do you support hiring foreign workers for state jobs when Americans are reachable on lists?

4) CEO Larry Ellison is worth $20 billion dollars. Oracle is lobbying against a $1200 annual fee on H-1b that would be used to fund scholarships of up to $15,000 so that Americans can pursue science and engineering degrees. Do you share Oracle and Compete America’s opposition to scholarships for Americans?

5) You state, "I am concerned that the current bill may make the H-1B program harder to administer." The only material change is that, under the Durbin/Grassley amendment, employers would first have advertise the position, make a good faith effort to hire Americans, and attest that no Americans were being displaced. Do you believe that Americans should be displaced from their careers because employers find it an administrative hassle to run help wanted ads and conduct interviews?

6) You cite “between 2004 and 2014 there will be nearly one million new jobs in math and computer sciences,” but ignore that more than 100,000 Americans graduate with degrees in these fields each year. Please explain why you support industry’s call for an H-1b influx that would fill every job and then some.

7) You claim that there is a shortage of tech workers in California. So can you explain why on the day you sent your letter there were ZERO classified ads for Computer Programmers in the Sacramento Bee.

I look forward to hearing an acknowledgement that you have considered these points, and hope that upon further consideration you will withdraw your letter in support of an H-1b increase.

Sincerely,
Mr. Kim Berry
Sacramento, California

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UPDATE: When I attempted to deliver the letter the Governor's staff was rude. I explained that I wanted to hand it to the appropriate staff. She said "I need a name." She said that the letter had to be dropped in the mailroom. When I told her I wished to meet with staff she gave me a form to fill out, but would not let me borrow a pen to fill it out. I bummed a pen off a security worker and filled it out. She would not let me attach the letter to the hand-written form.