H-1B visas going fast

Date: Tuesday, January 27, 2004 1:17 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

Unemployment of US high-tech workers isn't improving but that doesn't mean companies aren't hiring. Companies are in a mad rush to hire as many H-1Bs as they can before they reach the annual visa cap. It's like a cheap labor garage sale!

In the past, whenever the limit reached it's limit, lobbyists used this as justification for raising the limit. Let's take a brief look at some H-1B history:

----- 1997 -----

http://www.usvisanews.com/memo213.html
1997: The H-1B cap is reached for the first time in mid-August, six weeks before the start of the next Fiscal Year.
1998: Increased filings and carry-over from 1997 cause the cap to be reached on May 11, 1998, five months before the start of the next Fiscal Year. The INS has estimated that if Congress does not act to increase the cap on H-1B admissions, next year's cap could be reached by as early as December 31!

RESULT: The visa cap was raised to 115,000 in 1998.

----- 1998 -----

The Wall Street Journal, September 15, 1999 Last June the program reached capacity in record time -- less than seven months after Congress raised the annual limit to 115,000 from 65,000. At that time, the consensus among lawmakers from both parties was that there was little likelihood the cap would be raised again soon.

RESULT: The visa cap was raised to 195,000 in 2000.

So what are bodyshops and US companies going to do if the limit isn't raised? An article from the India Times provides an answer:

One way Indian companies like Wipro and Infosys --which
win many of these projects -- are beating the H1-B roadblock
is to apply for what is called the L1 visa for short-term
consultants, a category on which there is no limit.

I have said many times that L-1 visa holders can avoid paying taxes.
The American press seems reluctant to publicize this, but not the India Times. Their argument falls apart under scrutiny because they don't mention the fact that unemployed US citizens don't pay taxes either.

But the upshot of L1 is that the United States is deprived
of taxes which the H1-B visa holders pay, not to speak of
their other contributions to the United States when they
live here (L1s do not pay taxes). Tax contributions by the
vast army of H1-B visa holders in the U.S, numbering perhaps
a million, fund the social security system in a big way.
Either way, Uncle Sam will be a loser.

Outsourcing is very difficult without H-1B and L-1. They need to bring in the nonimmigrants to learn our technologies before they can move overseas. CEOs such as Andy Iyengar, CEO of Sysfour Solutions, understand the value of H-1Bs when it comes to moving our industries out of the U.S.

Iyengar says big U.S companies which have contracted work out
to firms in countries like India will be hard hit when the
H-1B quota fills up early. ''There will be projects that are
half complete and suddenly they cannot bring in Indian techies.
And they cannot scrap the project midway,'' explained Iyengar.
If they stop outsourcing, their costs go up and they still end
up laying off people.''

There is one other hope for companies that hunger for cheap labor and easy visas - the Bush guest-worker visa. In the last article, Ed Frauenheim explains that Bush's proposal might affect high-tech workers, but he only got part of the picture when he said that nurses and teachers were mentioned as possible workers covered by the program.
Margaret Spellings, assistant to the president for domestic policy, specifically mentioned that high-tech workers would be affected. Read the 1/17/2004 newsletter "How Many Spellings are there for Disaster?"
for details.

H-1B visas going fast

By Ed Frauenheim

Staff Writer, CNET News.com
ed.frauenheim@cnet.com

http://news.com.com/2100-1022-5147447.html

Story last modified January 26, 2004, 11:50 AM PST

This year's cap of 65,000 H-1B guest-worker visas is already close to being reached, as employers snap up the controversial visas.
Last week, U.S. Citizenship and Immigration Services posted notice on its Web site that in the first quarter of fiscal year 2004, 43,500 H-1B visas had either been approved or are "pending in the queue for adjudication."

The federal fiscal year started Oct. 1, 2003. This year's quota for the visas, which allows skilled foreign workers into the country for up to
6 years, is a drop from the annual limit of 195,000 that was in place for 2001, 2002 and 2003.

Chris Bentley, a spokesman for USCIS, said the pace of applications is "somewhat accelerated" from last year, "but not greatly."

Information technology services companies with much of their operations in India may be among the biggest applicants for the visas, according to Lakshmi Narayanan, CEO of Cognizant Technology Solutions. Cognizant, an IT services company, is based in New Jersey, but most of its employees work in India. "Companies like us are applying like crazyto get a greater proportion of the cap," Narayanan said in a recent interview with CNET News.com.

India-based companies with operations in the United States are significant users of the H-1B visa program as well as the L-1 visa program, which allows companies to temporarily bring in employees from other countries for managerial or executive work, or for work that entails specialized knowledge.

Indian companies' use of the visa programs has drawn fire amid layoffs of large numbers of U.S. technology workers in recent years. Critics also say the visas have fueled the shift of technology work overseas, another hot-button topic for U.S. programmers.

Besides a lowered visa cap, another change to the law in October was the expiration of rules affecting so-called "H-1B-dependent employers."
Those rules required companies with a large proportion of H-1B workers to attest that they sought U.S. workers before applying for another H-1B visa, among other requirements.

Ron Hira, an H-1B visa critic and a public policy professor at the Rochester Institute of Technology, has predicted that India-based firms are likely to apply for H-1B visas in greater numbers with the elimination of the H-1B dependent category.

Companies pursuing H-1B visas also now can get them more cheaply. A $1,000 application fee expired in October. Employers now must pay a fee of $130.

A number of proposals have been made to reform the H-1B and L-1 visa programs, including legislation from Sen. Christopher Dodd, D-Conn., and Rep. Nancy Johnson, R-Conn.

Defenders of the visas warn that even more IT work would go offshore if the visas are eliminated.

The H-1B visa program could be affected or even rendered obsolete by President George W. Bush's proposal for a new temporary worker program.
A Bush administration official has indicated that the new program would apply to skilled workers.

The 65,000 cap does not apply to visa extension requests for workers who are completing their initial three-year stay in the country. H-1B petitions approved for employment with U.S. universities and nonprofit research organizations also are not counted against the annual cap.

Last year, a total of 105,000 H-1B applications were approved for initial employment, with 78,000 counting against the cap, according to USCIS.

http://timesofindia.indiatimes.com/cms.dll/articleshow?msid=447545

US sets up H-1B road block for techies
CHIDANAND RAJGHATTA

TIMES NEWS NETWORK[ TUESDAY, JANUARY 27, 2004 09:49:14 PM ]

WASHINGTON: The United States will shut the door on foreign tech workers - a majority of them from India - early this election year amid a growing debate on job loss and outsourcing .

The US Citizenship and Immigration Services (USCIS) has announced that this year's cap of 65,000 H-1B guest-worker visas is nearly two-thirds taken within the first quarter of the fiscal year, which began on October 1, 2003. Some 43,500 visas have either been approved or are ''pending in the queue for adjudication.''

This means that U.S embassies and consulates across the world will not be able to issue H-1B visas after February or March, by which time the full quota would have been reached, till the new fiscal year 2005 begins in October 2004.

This years reduced quota of 65,000 is a sharp drop from the annual limit of 195,000 that was in place for 2001, 2002 and 2003. Critics of the program forced the administration and the Congress to bring it back to the pre-2001 quota of 65,000, saying the higher quota was helping replace American workers with immigrants.

The six-month shut-off period could possibly help dampen criticism of the Bush administration for the job loss heading into the November election.

But industry experts say the squeeze will hurt the United States and American companies more countries such as India, the highest recipient of H-1B visas. US companies which have already outsourced work to Indian firms and which need Indian techies for onsite work or consultations in the U.S will find a roadblock when the H1-B visa is filled up.

One way Indian companies like Wipro and Infosys --which win many of these projects -- are beating the H1-B roadblock is to apply for what is called the L1 visa for short-term consultants, a category on which there is no limit. Wipro, for instance, had 850 workers in the United States on H-1B visas as against 1,401 employees on L-1 visas as of Sept. 30, 2003, according to a filing with the SEC.

But the upshot of L1 is that the United States is deprived of taxes which the H1-B visa holders pay, not to speak of their other contributions to the United States when they live here (L1s do not pay taxes).

Tax contributions by the vast army of H1-B visa holders in the U.S, numbering perhaps a million, fund the social security system in a big way.

''Either way, Uncle Sam will be a loser. This is absolutely the wrong way to go about protecting the U.S economy,'' says Andy Iyengar, CEO of Sysfour Solutions, a New Jersey-based IT services company.

Iyengar says big U.S companies which have contracted work out to firms in countries like India will be hard hit when the H-1B quota fills up early. ''There will be projects that are half complete and suddenly they cannot bring in Indian techies. And they cannot scrap the project midway,'' explained Iyengar. ''If they stop outsourcing, their costs go up and they still end up laying off people.''

http://zdnet.com.com/2100-1103_2-5143807.html

Bush immigration plan could affect techies

By Ed Frauenheim

CNET News.com
January 20, 2004, 12:32 PM PT
URL: http://zdnet.com.com/2100-1103-5143807.html

Details of President Bush's plan to tackle illegal immigration remain fuzzy, but the program could create a new way for technology employers to bring in foreign workers.

If so, the stage will be set for another round of debates about the practice of temporarily importing guest workers for tech tasks--already a sore spot for critics of the H-1B and L-1 visa programs.

"Should the Bush proposal be implemented, it would be disastrous for American programmers, engineers and everyone in the country who can't make a living on the stock market alone," said John Miano, founder of software programmer advocacy group the Programmer's Guild.

Bush earlier this month announced his plan for a new temporary worker program. The program would "match willing foreign workers with willing U.S. employers when no Americans can be found to fill the jobs." In a speech announcing the plan, the president seemed to focus on less-skilled workers employed in the United States. "We see millions of hard-working men and women condemned to fear and insecurity in a massive, undocumented economy," Bush said. "The system is not working."

But in a speech last week at the Cato Institute, an administration official indicated the program could extend to highly skilled positions as well. Margaret Spellings, assistant to the president for domestic policy, said details of the program have yet to be worked out. But she said the program will be "non-sector specific" and mentioned nurses and teachers as possible workers covered by the program.

Nursing and teaching are relatively skilled job categories, which suggests that programmers or other tech professionals could be affected as well.

Harris Miller, president of the Information Technology Association of America (ITAA) trade group, said he has heard conflicting messages about the administration's new temporary worker plan. "It is still not clear whether the Bush plan will cover all worker categories or exclusively lower-wage categories for which there are no existing workable admissions programs," Miller said. "I have heard people from the administration state both sides, which makes me believe they are not clear themselves yet."

Miller said he would be surprised if the plan, when it is offered in detail, includes skilled worker categories. He noted that temporary employment programs for skilled workers already exist.

Two such programs are the H-1B visa and L-1 visa programs. The controversial H-1B visa program is designed to let U.S. employers import highly skilled workers, such as computer programmers, into the country for a period of up to six years.

The L-1 visa program allows companies to temporarily bring in employees from other countries for managerial or executive work or work that entails specialized knowledge. There is no annual cap for the number of
L-1 visas that the government can give out, nor is there a required pay rate. In the H-1B program, employers are supposed to pay a prevailing wage.

Both programs have been blamed for making it harder for domestic techies to find work in a grim job market. India-based companies in particular have come under scrutiny for making heavy use of temporary visas and for the way their use of the visas may have accelerated the shift of tech work abroad--another source of anxiety for U.S.
programmers and engineers.

ITAA's Miller defends the two visa programs, though he said he's heard concerns that L-1 visas have been given out to individuals without "specialized" knowledge. He thinks that if the Bush proposal does include skilled temporary worker programs, it "would include some provision to protect the wages and working conditions of similarly situated U.S. workers."

In his early January speech, Bush said: "Decent, hard-working people will now be protected by labor laws, with the right to change jobs, earn fair wages, and enjoy the same working conditions that the law requires for American workers."

But he did not mention a requirement that employers must pay a prevailing wage--nor does a White House document outlining the plan.

Miano of the Programmer's Guild doubted the Bush plan would garner enough political support to pass. Although he opposes it, he sees a silver lining to the proposal: It calls attention to existing guest worker programs and may derail attempts to raise the annual cap for H-1B visas from its current level of 65,000.

"It has publicized the H-1B and L-1 programs," Miano said. "Hopefully, Congress will be bogged down with this nonsense so much that they will not be able to expand H-1B."

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