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H-1B Visa Law: Trying Again

Two U.S. senators are reintroducing legislation aimed at revamping the H-1B visa program for guest workers in the U.S., at a time of rising unemployment and growing evidence that the program has been marred by fraud. Senators Dick Durbin (D-Ill.) and Charles Grassley (R-Iowa) hope that the bill, "The H-1B and L-1 Visa Fraud & Prevention Act of 2009," has a better chance of passing now than when they originally introduced it in 2007.

"The H-1B visa program should complement the U.S. workforce, not replace it," Durbin said in an Apr. 23 statement. "The…program is plagued with fraud and abuse and is now a vehicle for outsourcing that deprives qualified American workers of their jobs."

The bill would not reduce the number of H-1B visas—now 85,000 per year—but contains provisions to increase oversight and enforcement and discourage outsourcing of H-1B visa holders. It also requires all employers seeking to hire an H-1B visa holder to pledge that they have made a "good faith" effort to hire American workers first, and that the H-1B visa holder will not displace an American worker. Under current law, only heavy users of the program must make such a pledge.

Support from Tech Worker Groups

Compete America, a group representing tech firms like Oracle (ORCL), Microsoft (MSFT), and Google (GOOG) on immigration issues, had no immediate comment. The coalition opposed the Durbin-Grassley legislation in 2007 when it was first introduced. Its member companies have pushed to get more H-1B visas, claiming that a shortage of skilled workers is hampering their ability to compete in the global marketplace.

Fred Humphries, Microsoft's director of government affairs, said he had not yet reviewed the Durbin-Grassley language. Microsoft "supports comprehensive reforms to improve the immigration system rather than a piecemeal approach," Humphries said. Without referring to specific provisions in the bill, Google spokesman Dan Martin said: "Now more than ever it is in our country's best long-term interests to welcome the world's top engineers, scientists, and mathematicians to contribute to the American economy and keep the U.S. globally competitive."

U.S. tech worker groups strongly support the bill. "It's long overdue," says Kim Berry, president of the Programmers' Guild, an advocacy group for U.S. tech workers. "It provides basic U.S. worker protections we need especially in this down economy."

Microsoft came under fire in January when it announced it would lay off 5,000 workers while continuing to seek H-1B visas. On the company's first-quarter earnings call on Apr. 23, Microsoft Chief Financial Officer Chris Liddell said the company wants to add 2,000 to 3,000 new jobs in "higher growth" areas over the next 18 months. He said Microsoft's overall applications for H-1B visas are down about 20% and new-hire visas down 40% from last year.

Suspicions of Fraud

The introduction of the bill comes as concern has spread about the H-1B program's susceptibility to fraud. In October, the U.S. Citizenship & Immigration Services released a report stating that 13% of H-1B visa applications are fraudulent and another 7% contain some form of technical violations. On Feb. 11, federal agents detained 13 people in six states as part of an investigation into suspected visa fraud. A New Jersey IT services firm, Vision Systems Group, also was indicted on 10 federal counts, including conspiracy and mail fraud charges.

Earlier this month, another company, Teaneck (N.J.)-based outsourcer Cognizant Technology Solutions (CTSH), agreed to pay $509,607 in back wages to 67 H-1B workers after an investigation by the U.S. Labor Dept. The agency said Cognizant had failed to pay proper wages and offer equal benefits or eligibility for equal benefits.

Those in favor of increasing skilled immigration warn that drawing conclusions from such cases is dangerous, especially because U.S. companies need skilled workers to help the nation's economic recovery. "There is some abuse in the [H-1B] program, but it's small in the scheme of things," says Vivek Wadhwa, a Duke University engineering professor and a fellow with the Labor & Worklife Program at Harvard Law School. "Millions of people are losing their jobs, while there might be 10,000 cases of fraud per year. What's the big deal?"

Fears of a Trade War

Wadhwa worries that such legislation aimed at protecting American workers could spark a trade war, potentially endangering other U.S. industries. "[The bill] will maybe protect a few middle-aged programmers, at the expense of hundreds of thousands of other hard-working Americans," he says.

Grassley says the bill will not interfere with the competitiveness of companies like Microsoft. "Our legislation to reform the program will benefit American workers, while still ensuring that U.S. companies get the highly specialized workers they need," he said in a statement.

The new bill calls for the Labor Dept. to conduct random audits of at least 1% of companies using the H-1B program, and would require the agency to conduct annual audits of companies with more than 100 employees that have 15% or more of those workers on H-1B visas. The bill also authorizes 200 additional Labor Dept. employees to administer, oversee, investigate, and enforce guest worker programs such as H-1B. The bill would also require that employers advertise a job opening for 30 days on a Labor Dept. Web site before seeking a visa for such a position. It would also forbid employers from advertising a job as available only for H-1B visa holders.

Reining in L-1 Visa Abuses

The bill also includes a number of changes to the L-1 visa program, which is used for intracompany transfers of employees for up to seven years. It would establish for the first time a process for Labor Dept. officials to investigate, audit, and penalize L-1 visa abuses.

U.S. tech worker advocates praised these and other provisions in the bill. "We're thrilled that Senators Durbin and Grassley are requiring employers to seek local talent first," says Donna Conroy, executive director of Bright Future Jobs, a lobbying group for U.S. tech workers. "They recognize that American IT professionals have the talent, knowhow, and experience to push America's economic recovery into high gear."

But advocates for skilled immigrants—many of whom remain stuck for years on H-1Bs waiting in the long queue for permanent residency—worry that the bill is a political maneuver rather than an earnest effort at reform. Aman Kapoor, president of the skilled immigrant advocate group Immigration Voice, says that a more effective bill would ensure H-1B visa workers are on a level playing field with U.S. workers. "Skilled immigrants on H-1Bs don't get the same rights and protections as everyone else," says Kapoor. "So wouldn't the solution be to empower and enable the skilled immigrants on H-1Bs such that…skilled immigrants on H-1s have adequate protections so that no one can take advantage of [them]? But no one wants to talk about protections for skilled immigrants."

Herbst is a reporter for BusinessWeek in New York.

Herbst is a reporter for BusinessWeek.

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