Outsourcing: How to Skirt the Law

Want to hire cheaper foreign workers instead of Americans? A lawyer tells you how to game the immigration system—and it's all on YouTube

by Moira Herbst

Letters from Senator Chuck Grassley (R-Iowa) and Representative Lamar Smith (R-Tex.)

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The video looks as though it could have been shot at almost any sleepy corporate seminar in the country, with one camera panning between a man in a suit and tie standing at a podium and others seated nearby. But the dialogue is riveting: It's a group of lawyers openly discussing strategies for helping their clients pretend that they're trying to recruit American workers—as required by law—while they, in fact, hire cheaper foreign workers.

"[O]ur goal is clearly not to find a qualified and interested U.S. worker," says Lawrence Lebowitz, director of marketing for the Pittsburgh law firm Cohen & Grigsby, before an audience of employers at the firm's conference. The seminar provides details on how employers can meet the government's requirements for the Permanent Labor Certificate program (PERM), which lets employers sponsor foreign workers for permanent residency if they can demonstrate no U.S. worker can fill a job. The trick, according to Cohen & Grigsby attorneys, is to only go through the motions of hiring Americans without ever intending to.

The video, which has been posted on YouTube (GOOG), is now sparking a sharp backlash. On June 21, Senator Chuck Grassley (R-Iowa) and Representative Lamar Smith (R-Tex.) fired off a letter to Cohen & Grigsby demanding an explanation for its advice, as well as going so far as to ask for the names of its clients. "Your firm's video advises employers how to hire only foreign labor, while making it nearly impossible for a qualified American worker to get a job," they wrote. "We look forward to hearing from you on how such advice is ethical and does not undermine the programs by enticing fraud and misuse." (See the lawmakers' letter here.) A public relations firm representing Cohen & Grigsby did not return phone calls seeking comment.

Temp Work Program Under Fire

The same day, the legislators wrote a separate letter to Labor Secretary Elaine Chao. They asked for information about how the government is managing the program for temporary work visas, known as H-1Bs. The workers that are sponsored for permanent residency typically come into the country on such temporary visas. "[W]e are concerned that companies are abusing the H-1B visa program," the lawmakers write. "The video explicitly shows how attorneys are aiding companies in this effort." Grassley and Smith then voice concern about the Labor Dept.'s failure to monitor fraud in the visa system, and they request a breakdown of exactly how anti-fraud dollars are spent.

The video may complicate the prospects for immigration reform this year. While most of the debate has been over what to do about low-skilled workers, including the 12 million illegal immigrants already in the U.S., the policies for high-skilled workers are now becoming controversial, too. Microsoft (MSFT), Intel (INTC), Google (GOOG), Oracle (ORCL), Motorola (MOT), and a host of other leading technology companies have called for new policies to make it easier for skilled workers to come into the U.S., including by making available more H-1B visas.