Photographer: Drew Angerer/Bloomberg

Tech industry backs H-1B bill to detriment of Indian companies (Correct)

August 25, 2016 Danielle Bernstein
A bipartisan group of House members is seeking to amend the high-tech visa program to make it more difficult to hire cheaper foreign workers at the expense of qualified Americans.

“This bill is about protecting American jobs,” Representative Darrell Issa, a Republican from California, said upon unveiling the legislation.

Joining him in sponsoring the bill, H.R. 5801, is co-author and fellow Californian Scott Peters. a Democrat. Also signing on are Republicans Blake Farenthold and Lamar Smith of Texas,  Duncan Hunter of California and Democrats Susan Davis and Juan Vargas of California and Jared Polis of Colorado.

The measure would raise salary thresholds for companies to declare to the federal government that they’ve hired foreign workers after seeking Americans for the job. Currently, a company that has more than 50 workers, at least 15 percent of whom are in the U.S. on H-1B visas, must tell the Labor Department it couldn’t find Americans for the job if it’s paying H-1B workers less than $60,000 a year.

Issa’s bill would raise the threshold for these so-called H-1B-dependent companies to $100,000. It also would remove an exemption for employees who have master’s degrees or equivalents.

H-1B visas have been a lifeblood for tech giants such as Microsoft Corp.,Google Inc., Intel Corp., Amazon Inc., IBM Corp. and Apple Inc., as well as forWalt Disney Co. and Toys ‘R’ Us Inc. Supplying many of those temporary workers are Indian firms Tata Consultancy Services, Wipro Ltd. and Infosys Ltd., among other offshore companies. The trade association representing Indian companies is resisting changes to the system.

Another player is U.S.-based Cognizant Tech Solutions, which supplies H-1B visa workers to other companies. In addition, Ireland-based Accenture uses H-1B visas to transfer its employees into temporary assignments in the U.S., said Accenture spokesman Jim McAvoy.

The window for action on Issa’s bill — or any legislation — is narrow. Congress returns after Labor Day with a focus on crafting a stopgap spending bill to keep the government running after Sept. 30. Calvin Moore, a spokesman for the congressman, said attaching the bill to an omnibus, a broader spending that Congress may take up after the election, is an option. The omnibus typically becomes the vehicle for riders such as Issa’s proposal.

Last year, language to raise fees for H-1B visas was added to the omnibus,Public Law 114-113. The same law allowed more low-skilled foreign workers into the U.S. through the H-2B visa program. Under the omnibus, foreign workers who came in to do temporary non-agricultural jobs in the past three years are able to return without counting against the cap of 66,000 H-2B visas allowed to be issued in fiscal 2016. That change increased the effective cap to 264,000 this year, raising objections from organized labor.

With comprehensive immigration overhaul stalled in Congress over partisan divisions, tech and consulting groups long have urged Congress to raise its cap on H-1B visas, which stands at 85,000 per fiscal year. In 2015, Southern California Edison and Disney’s use of H-1B worker visas to replace Americans with cheaper labor — even having American workers train their lower-paid replacements — heightened public scrutiny.

Though Issa’s bill as introduced wouldn’t change the number of visas that could be legally issued, the legislation suits tech companies, said Ronil Hira, a Howard University professor who studies visa programs.

“The tech industry realizes it has to cut a deal in order to get the cap raised, so I think they’re just playing smart politics,” Hira said.

Issa and his allies say the current rules contain a loophole because companies can displace American workers by paying visa holders more than $60,000, allowing them an exemption for the declaration while paying a salary well below what a skilled American worker would make.

Issa, mindful of the impasse over broader immigration legislation, said he approached Peters and said, “Well, how about we just fix the most egregious part of H-1B?”

Raising the salary threshold to $100,000 is “not what we might call the cure-all and end-all, but it certainly is an amount that we’re comfortable will change the abuse,” Issa said.

In a perfect world, “everyone would have to make the attestation that there was a void,” he said, because companies that currently aren’t H-1B dependent don’t have to file a declaration that they’ve sought Americans for the jobs.

Issa’s bill has support from American tech industry lobbyists Compete Americaand FWD.us, whose spokeswoman Leezia Dhalla said the bill “will help our country stay economically competitive.”

Compete America represents a coalition of tech businesses, including Microsoft, Intel and Google; FWD.us, the brainchild of Facebook Inc. founder Mark Zuckerberg, advocates for immigration overhaul. Michael Bloomberg and Rupert Murdoch’s Partnership for a New American Economy, which has been active in this debate, also supports the bill. Bloomberg is the founder and majority owner of Bloomberg LP.

Tech’s Support

The tech industry’s stance suggests the bill won’t hurt companies, Hira said.

“They know it doesn’t fix the problem, and they may be throwing Infosys and Tata under the bus, but those guys aren’t really members of that group,” Hira said.

That’s because, instead of replacing Americans with H-1B hires from Infosys and Tata, companies would get temporary workers from non-H-1B-dependent outsourcing firms like Accenture, Hira said.

“It’s a patch on what needs surgery,” Representative Bill Pascrell, a New Jersey Democrat, said.

Issa’s bill is the latest among others in the legislative hopper:

  • Pascrell has introduced a bill with Dana Rohrabacher, a California Republican, that mirrors a 2015 bill from Senators Chuck Grassley, an Iowa Republican, and Dick Durbin of Illinois, the Senate’s No. 2 Democrat. The bills would prevent firms with more than 50 employees from hiring more H-1B workers if more than 50 percent of their employees hold H-1B visas or L-1 visas, another type of work permit.
  • Republican Senators Ted Cruz and Jeff Sessions, of Texas and Alabama, respectively, introduced a bill in December that would raise H-1B worker payments to $110,000. The bill hasn’t attracted Democratic sponsors.
  • Sessions and Florida Senator Bill Nelson, a Democrat, introduced a bill that would lower the fiscal year H-1B cap to 50,000, while Democratic Representative Zoe Lofgren, of California, is drafting a bill on H-1B worker pay.

Increased attention to the H-1B visa program may improve chances for changes, Durbin said, citing its mention in the presidential campaign.

Republican presidential nominee Donald Trump, whose wife, Melania, has spoken about her need to get her visa stamped as a young model from Slovenia, has repeatedly criticized the program. Melania Trump was granted an H-1B visa, which covers fashion models. Trump has said he will institute a requirement to hire American workers first. Hillary Clinton, the Democratic standard-bearer, has sought to reassure Silicon Valley she’d uphold the H-1B program.

Outsourcing Threatened

The National Association of Software and Services Companies, a trade association of India’s IT and software services industry which counts Infosys, Wipro and Tata as members, says efforts to rein in the H-1B program are targeting Indian firms.

Calling such proposals “discriminatory,” NASSCOM President R. Chandrashekharsaid they put “Indian companies in particular at a disadvantage.”

“It’s not the job of the government, whether Indian or American, to alter a level playing field,” Chandrashekhar said.

India plans to contest the Pascrell-Rohrabacher bill at the World Trade Organization if it passes, saying it would violate the General Agreement on Trade in Services. India did the same in March when the U.S. raised visa fees. The Indian government has yet to respond to Issa’s bill.

Chandrashekhar maintained that U.S. businesses are facing labor shortages.

“There are plenty of instances where companies have tried to hire locally,” he said.

Ultimately, the fate of any of the H-1B proposals will come down to conflicting agendas and lawmakers’ priorities in an election year.

“I don’t think the road’s any clearer,” Grassley said.

(Corrects description of Accenture’s use of H-1Bs in the seventh paragraph.)
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