H1B visa woes
Houston businesses that depend on foreign workers with specialized skills stuck in limbo.
Marlene Sarres was unable to hire Argentines on temporary work visas in 2014, forcing her to turn down projects and lay off half her personnel.
Her company, Gorham Group, refurbishes small fertilizer plants across the U.S., and the foreign engineers she wants to hire have specialized training that hasn’t been offered in the U.S. since the 1970s. Without them, her company suffered a 45 percent decline in income.
“I need these engineers,” she said. “Companies like ours can’t afford to hire inexperienced employees. It’s a liability to our clients.”
She recently reapplied for two H1B visas last week, but not much has changed about this program since her last application. While President Donald Trump ran his campaign on the promise of fixing the H1B visa program, critics say a key problem remains: Major companies abuse the program, using it to essentially outsource American jobs, and that makes it harder for smaller firms to get the visas they legitimately need.
IT outsourcing firms based in the U.S. and abroad, apply for three times as many visas as they need, critics of the pro-
Companies say they need foreign labor, but foes call program a way to ‘destroy the American tech workforce’
gram say. And there are only so many H1B visas to go around. Congress caps the total number at 65,000 a year for specialized, highly educated foreign labor. Then there’s an extra 20,000 set aside for foreign workers holding master’s degrees or higher from U.S. institutions. Beginning in fiscal year 2009, visas have been granted to employers through a lottery system.
And demand for the visas, mainly in the software IT and engineering sector, continues to grow. According to U.S. Citizenship and Immigration Services, since fiscal year 2014, the number of applications have exceeded the cap within the first week of filing. In fiscal year 2010 and 2013, by contrast, it took an average of seven months to meet the cap, an immigration services representative said.
Demand in Houston
Houston has consistently ranked among the top five cities with employers seeking H1B visas. Local immigration attorney Charles Foster said that by last Wednesday, his firm had filed close to 1,000 applications and expects the total number to grow.
He and Wilka Toppins, the immigration attorney overseeing Sarres’ visa applications, noted that this year’s uncertainty over the program’s future drove employers to seek legal counsel early.
“Most employers demand H1B because they understand it’s a global economy, so they need to hire the best-trained talent from wherever they can,” Toppins said.
Yet nearly 30 percent of available H1B visas went to only 10 IT firms in 2014, according to a report for the Economic Policy Institute by Ronil Hira, an associate professor of political science at Howard University.
Hira said much of the growth in H1B visa applications has been driven by these firms, which developed what he calls an offshore outsourcing business model in the early 2000s.
These companies offer foreign labor to Fortune 500 clients at cheaper wages where workers will get American training that they in turn can offer to colleagues abroad once their visas have expired, Hira said. The IT companies can then offer even cheaper labor through newly trained offshore workers.
While the H1B program stipulates an average wage of $60,000, Hira said there’s some wiggle room in actual pay given. Wage calculations ultimately depend on occupation, skill level and location. In Harris County for instance, the lowest wage employers can offer an H1B computer programmer is $52,478. In Brazos County, it’s $41,704, according to the Foreign Labor Certification Data Center.
Replacing Americans
Russell Harrison, director of government relations for the U.S. unit of the Institute of Electrical and Electronics Engineers, said that as employers pay H1B workers lower wages, they end up replacing American workers who can negotiate for higher wages and are subject to greater workers’ rights.
“This is how you destroy the American tech workforce,” Harrison said.
Companies that are among the largest beneficiaries of the H1B program defend their practices.
IT firm Cognizant, for example, said it employs thousands of U.S. citizens and that its H1B employees are “required by law to receive compensation competitive to their American counterparts.” Cognizant’s U.S. headquarters is in College Station, and it has about 3,500 employees in Texas.
“As we develop our annual business plans based on our assessment of our clients’ needs, we apply for H1B visas to fill talent gaps in the marketplace,” the company said in a statement.
Infosys, an Indian IT firm with a Houston office, offered a similar defense in a statement: “Our company policy demands adherence to all laws, rules and regulations everywhere we operate, and we take our compliance obligations seriously.”
Last week, both the Department of Justice and the U.S. Citizenship and Immigration Services published notices affirming their commitment to cracking down on H1B abuse.
“The Justice Department will not tolerate employers misusing the H1B visa process to discriminate against U.S. workers,” Acting Assistant Attorney General Tom Wheeler said. “U.S. workers should not be placed in a disfavored status, and the department is wholeheartedly committed to investigating and vigorously prosecuting these claims.”
Potential abuse
The immigration services noted it will ramp up efforts around on-site visits to H1B holding employers to ensure there are no cases of fraud, and it has created an email address where workers, American and otherwise, can submit tips, alleged violations and other relevant information about H1B fraud or abuse.
“Protecting American workers by combating fraud in our employmentbased immigration programs is a priority,” the department said.
While there are bipar- tisan bills in Congress offering reforms to the H1B program, many say they only offer cosmetic changes that do little to fully address outsourcing firms and H1B workers’ rights. Harrison for instance said his engineering association would prefer to see a better route to green-card access for H1B workers allowing companies to reap more benefits from their specialized skills while also granting these workers the opportunity to further contribute to the U.S. economy by starting their own businesses.
Sarres, whose company employs 50 people, is open to the idea of immigration reform around the H1B visas — particularly reforms that would allow smaller firms like hers to more easily access the program. A Honduran immigrant herself, she started Gorham Group in 2003 as an export packing company. She shifted operations to focus on mini-plant refurbishing in 2012.
With a Nebraska project lined up, she’s praying her H1B visas are approved so she can avoid travel expenses to and from Argentina seeking consultation she could have in-house through the visas.
“It’s the waiting game now,” she said.