More Heat for Indian Outsourcers

Senators Grassley and Durbin release more data showing that Tata, Infosys, and others are using U.S. work visas to their advantage

by Moira Herbst

As a revamped immigration reform bill heads to the Senate floor this week, opponents of outsourcing are again turning up the heat on companies they say are exploiting U.S. visa programs to send jobs abroad and to hire cheaper, non-American tech workers. On June 26, Senators Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) released information revealing that foreign outsourcing firms that use the high-skilled H1-B visa program extensively are also among the heaviest users of another category, known as L visas.

Durbin and Grassley say these companies are abusing the L visa program, which is intended to allow multinationals to transfer foreign managers and specialists within a company to U.S. offices. The Senators allege that outsourcing firms are not engaging in transferring at all, but instead are hiring foreign workers expressly to bring them to the U.S.—and to take the place of American workers. The newly released data show that of the top 20 L visa users in fiscal year 2006, 14 are offshore outsourcing firms, including Tata Consultancy Services, Satyam Computer Services (SAY), Wipro (WIT), Infosys Technologies (INFY), Patni Computer Systems (PTI), and Accenture (ACN). (Click here for a look at the top 20 users of L visas.)

"Clear" Evidence

"It's clear that foreign outsourcing firms are abusing the system and we can't let that continue," said Senator Durbin in a statement. Representatives of Tata, Wipro, Infosys, and other top outsourcing firms could not be reached immediately for comment.

Durbin and Grassley obtained the information on L visa users from the U.S. Bureau of Citizenship & Immigration Services after requesting it in a June 13 letter. The data show, for example, that Mumbai-based Tata Consultancy obtained 4,887 L visas in fiscal year 2006, the most of any firm, American or Indian. "I find it hard to believe that any one company has that many individuals…legitimately being transferred within a single year," said Durbin.

A spokesman for Tata denies any wrongdoing and says that the company is willing to cooperate with Durbin to clear up any misunderstanding. "We're complying with the law and with the regulations," says the spokesman. "We want to work with Congress to address any issues they may have."

The Senators' latest missive comes just over a month after they launched their own investigation into the Indian outsourcers' activities in the U.S. On May 14, Durbin and Grassley sent letters to nine of the outsourcing firms, requesting information about how they use H-1B visas (see BusinessWeek.com, 5/15/07, "Crackdown on Indian Outsourcing Firms"). That program was originally set up so U.S. companies could hire foreign workers with rare skills, but in recent years the most active users of the program have become outsourcing firms, led by Infosys and Wipro. Durbin and Grassley have said that this is evidence the program is being used to outsource American jobs to India.

Furious Reaction

Critics say the L visa program could allow for even more abuse than the H1-B program, which allows high-skilled workers to come to the U.S. for up to six years. While H1-B visas are capped at 65,000 per year, there is no annual limit to the number of L visas, and while H1-B visa workers must receive the prevailing wage, there is no such requirement for L visas. The number of such visas issued has increased from 39,886 in 2001 to 53,144 in 2006.