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Indian outsourcers, along with Microsoft, again lead the list of companies bringing foreign workers to the U.S. on the H-1B visa program
More fuel was added to the controversy surrounding the use of H-1B visas with the release of government data showing that Indian outsourcing firms dominated the list of top recipients of H-1B visas for high-skilled workers in 2008. At No. 5, Microsoft (MSFT) was the top U.S. tech company on the list.
It was the second straight year that the Indian firms led the list of visa petition approvals.
The data, compiled by the U.S. Citizenship & Immigration Service (USCIS), are for fiscal year 2008, which ended Sept. 20. The H-1B visa program is currently capped at 65,000 per year, with another 20,000 set aside for advanced-degree graduates of U.S. universities.
Program Under Fire
Critics say the data show that the H-1B visa program is dampening U.S. wages and facilitating outsourcing, a critical problem as the U.S. unemployment rate continues to climb. The H-1B program, which started in 1990, was set up to allow U.S. companies to import the best and brightest in technology, engineering, and other fields when such workers are in short supply domestically. Critics say the program is displacing Americans by bringing in workers from overseas who are paid less.
Senators Chuck Grassley (R-Iowa) and Richard Durbin (D-Ill.), who have been among the program's chief critics, say they plan to reintroduce legislation to change the program by the beginning of April. That bill would require all companies getting H-1B visas to try to hire Americans first and place restrictions on companies that attempt to use H-1B visas for outsourcing. "I am not against immigration…but I don't want H-1B to be used as subterfuge," says Grassley. "I want to make sure that every employer searches to make sure there is no American available to do the job." They introduced a similar bill in 2007, but it was not enacted.
Four India-based companies topped the list: Infosys Technologies (INFY) was the top recipient on the USCIS list, receiving approval for 4,559 visas—the same number it received in 2007. Next was Wipro (WIT) which received approval for 2,678 H-1B visas in 2008, up from 2,567 in 2007.
Microsoft Is No. 5
Third on the list was Satyam (SAY), which remains embroiled in a scandal where the company's chairman admitted to inflating its earnings. The company got approval for 1,917 H-1B visas in 2008, significantly more from the 1,396 it received in 2007. Tata (TCS.BO) came in fourth with approval for 1,539 visas last year, nearly double the 797 it got in 2007.
Microsoft was fifth on the list, winning approval for 1,018 visas, 59 more than it got in 2007. Among other U.S. companies, Google (GOOG) received 248 visas and Lehman Brothers, which failed late last year, received 130 visas.
In fiscal year 2007, six of the top 10 visa recipients were based in India; two others among the top 10, Cognizant Technology Solutions (CTSH) and UST Global, are headquartered in the U.S. but have most of their operations in India.
Visas Used Differently
There are differences between U.S. tech companies and Indian outsourcers in the way they use H-1B visa workers. U.S. companies like Microsoft and Google often try to keep visa workers in the country and help them become American citizens, while the outsourcers typically employ visa workers in the U.S. on a temporary basis. The U.S. companies argue that they use the visas to hire software programmers or computer scientists with rare skills, improving competitiveness and keeping jobs in the U.S. Outsourcing firms, critics say, bring workers to the U.S. at a low cost, train them in the offices of U.S. clients, and then rotate them back home so they can provide tech support and other services from abroad.
Microsoft continues to advocate for more H-1B visas, citing a shortage of highly skilled workers who can fill jobs like software designer. That position drew the attention of Senator Grassley when the company announced it would lay off 5,000 employees. Grassley wrote to the company and urged it to give U.S. workers priority over H-1B visa holders in keeping their jobs.
While controversy surrounding the program has been building for years, the dire state of the U.S. employment market has heightened the tone of the debate, and lawmakers have followed suit. The $787 billion federal stimulus bill Congress approved earlier this month imposed restrictions on H-1B use by financial-services firms that receive bailout funds.
At the same time, federal agencies are stepping up enforcement efforts. Earlier this month, federal agents said they had arrested 11 people in six states in a crackdown on H-1B visa fraud.
Recession May Temper Demand
USCIS will begin taking H-1B applications for the next fiscal year on April 1 and will distribute the new visas on Oct. 1. Applications have been exceeding the visa cap in the last few years, but demand this year may be lower because of the financial crisis and recession.