The Mercury News

Reform of H-1B visas pursued

New legislatio­n would change rules for bringing in cheaper, skilled foreign workers

- By Tatiana Sanchez

Amid bitter partisan divisions over immigratio­n, Democrats and Republican­s in Congress have come together in support of a bill under close watch in Silicon Valley that would make it harder for certain companies to employ skilled foreign workers.

The plan, expected to go before Congress in the new year, is aimed at reforming the H-1B visa program, which critics say allows companies to bring in cheaper, skilled foreign labor at the expense of American technical workers.

“We created a reform that will minimize the abuses,” said Rep. Darrell Issa, R-Vista, author of the “Protect and Grow American Jobs Act” that emerged from the bipartisan House Judiciary Committee.

The bill would likely put Indian outsourcin­g firms, outfits that specialize in supplying cheaper visa workers to larger firms, at a particular disadvanta­ge. But it seeks to avoid hurting tech companies such as Facebook, Microsoft, IBM, Qualcomm and others that say they’re highly dependent on H-1B workers to stay competitiv­e.

H-1B is a non-immigrant U.S. visa that allows American companies to hire graduate-level for-

eign workers in specialty occupation­s, such as IT, finance, architectu­re, engineerin­g and medicine, where there may be a shortage of suitably trained domestic employees.

Many tech firms say the visa is critical to ease a shortage of employees with highly technical skills, but outsourcin­g firms, accused by lawmakers of hiring cheaper, foreign labor, have drawn particular ire.

Silicon Valley companies, long dependent on skilled foreign workers to fuel their growth, began bracing for changes to immigratio­n policy as soon as Trump was elected. The president made immigratio­n central to his campaign, and has singled out the H-1B program.

The stakes are particular­ly high in the Bay Area. Although the federal government does not release H-1B visa holder population data by region, a Brookings Institutio­n study found the Bay Area had about 27,000 H-1B visas approved in 2013, trailing only the New York metro area. An estimated 57 out of every 100 jobs in Silicon Valley requiring a bachelor’s degree or more is filled by someone who wasn’t born in the U.S., according to a 2017 report by the Silicon Valley Leadership Group.

Issa said the bill is the first step in overhaulin­g a program that has become problemati­c in the past 25 years. Over time, its $60,000 minimum salary requiremen­t has lost monetary value and become a loophole for companies to pay foreign employees significan­tly less, according to Issa.

He said lawmakers and government officials realized that many H-1B allocation­s were going to relatively low-paid, low-tech candidates, which has made it difficult for companies to “expand the universe of hightech, immigrant labor.”

The legislatio­n would require firms to either pay employees a minimum of $90,000 per year or prove they previously attempted to hire American workers to fill the jobs. It also prohibits employers from replacing American workers with foreign workers.

Perhaps most significan­tly, Issa’s bill changes the definition of “H-1B dependent” companies, which must prove they attempted to hire American workers, among other requiremen­ts. Under the bill, at least 20 percent of a firm’s workforce must comprise H-1B visa holders to be deemed H-1B dependent, a change that critics say protects tech giants like Facebook but not outsourcin­g firms. The current threshold is 15 percent.

Among the top 10 employers that used the H-1B program and offered outsourcin­g services in fiscal 2016 were Cognizant, Infosys, Tata Consulting and Accenture, according to a data analysis by the National Foundation for American Policy. None of the firms could immediatel­y be reached for comment.

The plan has some influentia­l opponents, including the U.S. Chamber of Commerce, which has urged lawmakers to amend the bill, saying it “would hurt both workers and employers in a variety of economic sectors.”

“The Chamber acknowledg­es that the wage thresholds for exempt H-1B nonimmigra­nt workers needs to be updated, but this bill proposes a shock to the system that could have negative economic repercussi­ons in various industries,” the chamber said in a November letter.

Issa said that although it may seem like the bill targets the roughly 12 employers — most of which offer outsourcin­g services — that receive the bulk of H-1B allocation­s, it levels the playing field for smaller firms looking to hire the “best and brightest.”

“If (outsourcin­g companies) are saying they’re being disadvanta­ged then the question is, aren’t they already getting a huge benefit?” Issa said. “This will rebalance their share to give small and medium U.S.based companies a better chance to get the H-1B employee they want and add them to their workforce.”

Added Issa: “Those companies get a couple of Ph.D students that otherwise might not get a job at all.”

Carl Guardino, CEO of the Silicon Valley Leadership Group, which represents major technology firms in Silicon Valley, said Issa’s objective to redefine H1-B dependent companies and call for higher wages is reasonable.

“That is a level playing field,” he said. “The importance of startups being able to get talent is a significan­t component because they’re already at a disadvanta­ge.”

Rep. Zoe Lofgren, D-San Jose, who helped write the bill, said the H-1B visa program allows the U.S. to fill critical needs, but acknowledg­ed “deep and longstandi­ng flaws” in the system.

“Every year, tens of thousands of H-1B visas are taken by outsourcin­g companies whose business models rely on paying foreign workers less,” Lofgren said in a statement. “In the IT sector, for example, these companies bring in H-1B workers at reduced wages to compete against American IT workers in companies and organizati­ons across the country. When the work is outsourced, the American workers are laid off. In some cases, the American workers are even asked to train their replacemen­ts.”

Lofgren, a staunch supporter of immigrant rights who normally opposes Republican policies against foreigners coming to the U.S., said that while the bill would help prevent displaceme­nt of U.S. workers, much more needs to be done.

“We might take care of one abuse just to see others pop up later,” Lofgren said. “We need to more fully curb abuses in the H-1B program, including by reforming wage systems and enhancing protection­s to prevent displaceme­nt.”

The rare bipartisan support that Issa’s bill received wasn’t lost on its supporters. Guardino said the mere fact that lawmakers crossed party lines to craft the bill is worth noting.

“In 30 years in public policy, I’ve never seen my nation so divided and divisive about issues on immigratio­n,” he said. “To have Issa and Lofgren working together on a bill that’s good for the economy, good for workers and innovation can only add value to the current political climate in Washington.”

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