Thread: Senators target visa abuse

Posted on Fri, Jun. 15, 2007

Senators target visa abuse
Outsourcing services' use of specialized work permit raises particular concern

RICK ROTHACKER
rrothacker@charlotteobserver.com

Worried about the loss of American jobs to foreign workers using special visas, two U.S. senators on Thursday called on immigration officials to step up efforts to stop fraud and abuse in the program.

In recent months, Sens. Charles Grassley, R-Iowa, and Richard Durbin, D-Ill., have been probing potential misuse of H-1B visas, which allow technology and other specialists to work in the U.S. They have expressed particular concern about their use by firms that provide offshore outsourcing services to U.S. companies.

Last month, the senators requested employment and other information from the top nine foreign-based users of H-1B visas, companies largely involved in outsourcing.

Charlotte's Bank of America Corp. and Wachovia Corp. outsource work to two of the firms -- Tata Consultancy Services and Infosys Technologies, both based in India.

Under certain circumstances, companies that employ H-1B visa holders are prohibited from displacing American workers. But Grassley and Durbin question how well this is enforced.

H-1B visas are one of the flash points in a simmering debate over how the U.S. controls its borders. Technology companies want more of the visas because they say the U.S. has a dearth of skilled workers. Critics say the visas are used to replace Americans with lower-paid foreign workers.

A now-stalled immigration reform bill in the Senate would raise the annual base cap on H-1B visas to 115,000 from 65,000, with the potential to increase to 180,000. Lawmakers are still working to revive the legislation.

In a letter Thursday, Grassley and Durbin asked Emilio Gonzalez, director of U.S. Citizenship and Immigration Services, to provide information about the agency's enforcement efforts by Wednesday. The senators did not release information compiled from the nine companies, but said it was evident the firms' U.S. work forces had minimal American workers.

"We've begun to question how many companies are complying with H-1B visa requirements," Durbin said in a statement. "I look forward to hearing back from Director Gonzalez on what the government is doing to enforce the law."

Job-loss concerns

Charlotte's big banks are among many financial services companies looking to cut costs and tap skilled workers by shifting technology and processing work to India. This has raised concerns about the loss of white-collar jobs in the U.S.Bank of America has its own subsidiary in India, where about 2,500 employees handle technology and other tasks for the bank. The Observer also reported last month that Bank of America had hired Tata, better known as TCS, to perform software work for its wealth and investment management unit.

In recent years, Wachovia Corp. has transferred some technology work to three firms: Bangalore-based Infosys, New Jersey-based Cognizant Technology Solutions and New York-based IBM Corp. The bank also is sending processing work to Genpact Ltd., an Indian outsourcer now handling more than three dozen functions for the bank, according to a recent securities filing. Wachovia also works with TCS from time to time.

According to the U.S. Labor Department, three of the firms that do work for the banks -- TCS, Infosys and Cognizant -- fall in a category known as "H-1B-dependent." These firms generally have at least 15 percent of their U.S. work forces using H-1B visas.

These companies are required to make a good-faith effort to hire U.S. workers and cannot displace similar U.S. workers over a six-month period. The companies also cannot use H-1B visa holders to displace a U.S. employee at another company over the same period.

Bank of America has said some jobs in the U.S. have been lost by sending work to India, but hasn't given a number. In the latest shift of work to TCS, it said 15 employees would move to other jobs in the bank.

Wachovia has said jobs eliminated through offshoring would be part of 4,000 cuts associated with a broader three-year efficiency effort.

Spokespersons for both banks said they could not comment on specific vendors, but both said they require the companies they work with to follow all laws and regulations.

TCS spokesman Michael McCabe said the Mumbai-based company has responded to the senators' request, but declined to share details. He said the company follows all laws and regulations, adding: "We have never displaced U.S. workers at our company as a result of using the H-1B program."

Infosys and Cognizant did not respond to the Observer's request for comment.

`The outsourcing visa'

NASSCOM, a trade association that represents Indian software and services companies, last month came out in support of the nine firms, sending a letter to the senators on the companies' behalf.

"H-1B visas are beneficial to both U.S. and Indian companies and the U.S. economy," the group said in a statement, while pledging to cooperate with the senators.

Ron Hira, a Rochester Institute of Technology professor and offshoring critic, said Grassley and Durbin's request highlights problems with the H-1B visa program. In a briefing paper Hira published earlier this year, he concluded that 15 of the top 20 companies that requested H-1B visas in fiscal year 2006 counted offshore outsourcing as a significant part of their business.

"The rationale behind the H-1B program is to prevent outsourcing," he said. "In fact, the top users of the H-1B program are offshoring companies. It's actually speeding up the practice."

In an interview with The New York Times this year, India commerce minister Kamal Nath acknowledged the importance of the H-1B program to the offshoring business. "It has become the outsourcing visa," Nath said.

In April, Grassley and Durbin introduced a bill that aims to reform H-1B and so-called "L visas," which are used by multinational companies with U.S. offices. The legislation would require all companies that employ H-1B visa holders to seek American workers first and not displace U.S. jobs. The bill would also give the Labor Department more power to investigate fraud in the program.

The senators, who have added some of their proposals to the stalled immigration package, said they need more information on the H-1B program to better inform the debate. They would push the provisions if a broad immigration bill is resuscitated, but it would be difficult to move a stand-alone bill, Grassley spokeswoman Beth Levine said.

http://www.charlotte.com/business/story/160707.html

Banks should not be able to outsouce or hire H-1B personnel. Americans should handle american accounts.

Beckyal wrote:

Banks should not be able to outsouce or hire H-1B personnel. Americans should handle american accounts.

Mortgage companies have started outsourcing the job of processing the loan packages to India. Ihink of all of the information is available in that little bunch of papers!!!!!