Homeland Security probes L-1 visa abuses
Office of the Inspector General finds significant flaws in overseas hiring program

By Ephraim Schwartz
March 21, 2006 l

In the course of my research for a column on misuse of the L-1A and L-1B visa program for temporary workers in the United States, I was alerted to the Inspector General’s report published in January of this year by the Department of Homeland Security (DHS), titled “Review of Vulnerabilities and Potential Abuses of the L-1 Visa Program."

First, some background on what the L-1 visa program is. The program allows a foreign worker employed by a company overseas for at least one year to enter the United States temporarily, “in order to continue to render his services to the same employer or a subsidiary or affiliate … in a capacity that is managerial, executive, or involves specialized knowledge.”

According to Frank Robinson, CFO at Darwin Partners, insurance companies are bringing in foreign workers under L-1, providing food and lodging, but are paying the guest workers at the salary they were getting back home. If a typical programmer in the United States makes $60,000 to $80,000 per year, these workers are being paid as little as one-quarter of that. And they can stay as long as five to seven years.

These workers may be employees of the insurance company; or worse, they could be employees of IT services companies, known as “body shops,” who hire them out for a fee.

I called some leading insurance companies and got a response from one.

“There is a lot of internal sensitivity to this,” my source -- whom I won’t name -- says. “It involves some displacement of people. We have done our best to keep a low profile on that.”

Using foreign workers and paying them below American scale is only one abuse. A second is bringing in workers for training. In this case, there is no way to pretend that these workers have skills that the company needs. I am told that many high-tech companies do this and that I should ask Intel (Profile, Products, Articles) about it, especially at Intel’s Folsom, Calif., location. I called three or four Intel public relations people I know but got no response.

The irony here is that when workers are brought in like this for training, the American workers are in essence training their own replacements, according to Kim Berry, president of the Programmers Guild.

Finally, that DHS report I mentioned calls L-1 “The Computer Visa,” saying nine out of 10 companies that use the L-1 are “computer- and IT-related.” The report says that it is “difficult to be confident that a firm truly intends using an imported worker” as a manager or executive. It suggests that the term “specialized knowledge” is so broad that “adjudicators believe they have little choice but to approve almost all petitions.” And while L-1 workers must be employed by the importing company abroad for at least a year, the report finds that the United States has “little ability to evaluate the substantiality of the foreign operation” and even allows “petitioners to transfer themselves into the United States.”

There are a lot of things wrong with this. But what bugs me the most are the statements made by our leading high-tech CEOs about the poor quality of American education and the fact that there aren’t enough U.S. workers to fill the jobs. All the while, these same CEOs bring in outside workers -- not because the education is so much better abroad, but because doing so benefits their own bottom lines.