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Businesses Programming News IT

How Outsourcing Companies Are Gaming the H-1B Visa System (nytimes.com) 284

New submitter shakah writes: The NY Times has a straightforward summary of how the H-1B Visa system is being gamed by companies inside and outside of the United States. Particularly interesting for me was their clarification on the argument that "VISA holders have to make prevailing wages, so they won't depress wages." Quoting: "Under federal rules, employers like TCS, Infosys and Wipro that have large numbers of H-1B workers in the United States are required to declare that they will not displace American workers. But the companies are exempt from that requirement if the H-1B workers are paid at least $60,000 a year. H-1B workers at outsourcing firms often receive wages at or slightly above $60,000, below what skilled American technology professionals tend to earn, so those firms can offer services to American companies at a lower cost, undercutting American workers."
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How Outsourcing Companies Are Gaming the H-1B Visa System

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  • A better idea (Score:5, Interesting)

    by alvinrod ( 889928 ) on Tuesday November 10, 2015 @02:46PM (#50902959)
    How about H1-B Visa holders get paid 110% of the prevailing wage so that only the companies who seriously need a specialist and legitimately can't find any local talent will hire them. Also, give H1-B holders a ten year window to work in the U.S. that isn't dependent on staying with a single employer. If someone else hires away your H1-B employee, that's your company's problem.
    • Re:A better idea (Score:5, Insightful)

      by khasim ( 1285 ) <brandioch.conner@gmail.com> on Tuesday November 10, 2015 @02:57PM (#50903059)

      I like that idea.

      The corporations would try to game it by using job titles that don't fit the job. Like "junior apprentice programmer" requiring 20 years of experience.

      So we need a way to correctly reflect either the job or the skills. We could base it upon the median salaries of the people with the same certifications living within 100 miles. But not everyone has certifications.

      Any better ideas?

      • Re:A better idea (Score:5, Interesting)

        by nine-times ( 778537 ) <nine.times@gmail.com> on Tuesday November 10, 2015 @03:11PM (#50903187) Homepage

        Pretty much plan isn't going to work if you allow for blatant rule-breaking. Make it so if you have a "junior apprentice programmer" that has 20 years of experience and is running the project, the company gets fined and the hiring manager risks jail time. Have random audits to confirm people are following the rules. Enforce those rules.

        Besides, if someone is applying for an H-1B visa for a "junior apprentice programmer" on the basis that they need a specialist that isn't available in the US population, that application should be rejected on it's face.

        • Re:A better idea (Score:5, Insightful)

          by fahrbot-bot ( 874524 ) on Tuesday November 10, 2015 @03:19PM (#50903235)

          Have random audits to confirm people are following the rules. Enforce those rules.

          Sure, but that requires *more* government -- to enforce those rules and punishments -- and, as we all know, that would be bad and a "job killer", unlike easy access to cheap, foreign H-1B workers ... oh, wait.

          • Isn't that really the point? Add in so many rules and regulations so that eventually the government can change the management (and ownership) of a company at any time for any number of reasons. Communism, fascism, medieval feudal system, they are basically all the same under different names and the basically all mean that everybody works for the government and buys everything from the government.

        • Re:A better idea (Score:5, Interesting)

          by taustin ( 171655 ) on Tuesday November 10, 2015 @03:25PM (#50903297) Homepage Journal

          Pretty much plan isn't going to work if you allow for blatant rule-breaking. Make it so if you have a "junior apprentice programmer" that has 20 years of experience and is running the project, the company gets fined and the hiring manager risks jail time. Have random audits to confirm people are following the rules. Enforce those rules.

          And watch the auditors start buying expensive boats and cars, and taking long vacations in exotic resorts, because then the game is to get your competitor in trouble with accusations of wrongdoing, true or not.

          There is no rule that can't be gamed. The only benefit to changing the rules is that it forces the game players to learn the new rules. Sometimes, it might even change the winners. But it'll still be gamed, and still to the advantage of those at the top.

        • Re:A better idea (Score:4, Interesting)

          by Hognoxious ( 631665 ) on Tuesday November 10, 2015 @04:07PM (#50903717) Homepage Journal

          The solution to that is to have the worker own the visa, not the employer.

          If they have 20 years' genuine experience and you try to pay them like a junior they'll soon sling their hook and fuck off somewhere else if the option's open. And all power to their elbow.

        • by Gr8Apes ( 679165 )
          Make it this simple - any US citizen with the requirements can apply for the job at the stated 100% pay. All H1Bs must be posted. If that makes an H1B position unpleasant for the H1B folks, maybe they won't take those jobs either.
          • by rtb61 ( 674572 )

            H1B corporate code for training is expensive and they don't want to pay for it. So the US government screws students with massive rip off loans for higher education training, then screw them over by stealing the training paid for by other countries who do not rip off the higher education students with loans and thus be a lot cheaper. Basically US corporations having their caking and eating but simply keeping their cake and stealing everyone else's to eat.

            Can not find trained citizens - THEN FUCKING TRAIN

        • The simple answer -- have a specific list of job titles and matching skills requirements that are determined to be in short supply. This list gets reviewed annually. Any unemployed IT worker could register their skills, and would get first crack at new positions when an H1B worker is requested.

        • Like anyone cares about breaking labor rules. The watchdogs (as many on here fondly point out) are an aging dinosaur.

          There are plenty of cases of industrial accidents with thousands of labor board complaints that no-one did anything about, and during a conservative regime its even worse.

      • by mileshigh ( 963980 ) on Tuesday November 10, 2015 @03:12PM (#50903193)

        How about a flat $50K/year tax payable straight to the gov't? Think of that as a tariff or duty. This would have several advantages:
          - Simple & stupid, can't game a flat fee
          - That kind of revenue wold keep the gov't interested in enforcing the program
          - Makes the process of hiring offshore much more expensive. Remember, the idea is that hiring offshore is supposed to be a *last* resort, so $50K wouldn't deter someone who truly needed a particular skill.
          - Makes it impractical to hire offshore lower-level employees, the kind that we already have plenty of and who are blatantly being replaced with foreigners just to save money.

        • by khallow ( 566160 )
          You also probably want the employee to have the ability to job hop. My view is pay money to get a green card for your employee.

          Remember, the idea is that hiring offshore is supposed to be a *last* resort

          Let's not waste our time with this. It's clearly not true or enforced.

        • by ThomasBHardy ( 827616 ) on Tuesday November 10, 2015 @03:48PM (#50903517)

          Flat fee issue:

          Do you really want to incentivize the government to have offshore workers by making them profit centers for the government itself? How is that an incentive to avoid destroying domestic jobs?

          I'd think more like saying "H1B hires cost 3x the prevail wage for a job as determined by industry". Anyone not willing to pay up triple the cost can hire back the same folks they are firing now to save a buck. Anyone claiming this is not about companies saving a buck is being disingenuous. If there is truly not a single domestic worker able to fill the role, then paying extra for it should not be a problem. Looking at employment rates, and layoff/offshoring announcements I think these problems would fix itself pretty quickly given the right financial incentive.

          • by vovin ( 12759 )

            Because you can lie about the prevailing wage.
            You can't fudge your way around a flat fee.

          • by swb ( 14022 ) on Tuesday November 10, 2015 @05:38PM (#50904489)

            Do you really want to incentivize the government to have offshore workers by making them profit centers for the government itself? How is that an incentive to avoid destroying domestic jobs?

            You earmark the flat fee to go towards funding the enforcement of the H1B program rules. Any surplus goes to fund worker re-training programs.

            This way enforcing the rules of the program is self-funding, and congress can't defund enforcement "because business" and the larger and more popular it is, the more enforcement can be funded.

            Plus, you're basically forcing employers who "need" to hire cheap offshore help to also (provided there is a surplus, and at $50k per, there should be) fund worker retraining so the people needed to do the job can be found at home.

          • Of course this about companies saving money. They have bought the rules, as set by government, in such a way that there's some sort of fig leaf protection for American jobs, but really the system is designed to drive the cost of labour down.
      • by AK Marc ( 707885 )
        The fix is to reverse auction all jobs open to H-1B visa holders. The pay for the job would be published and listed. The lowest bidding American (if any) would get the job, and no foreigners would get the job if there was an American willing to take it. The employers should like the system because it will depress wages, and the employees should enjoy the system because it will be open and fair.

        Or both would hate it. Unqualified people depressing wages for all. If nothing else, it would discourage the
      • Re:A better idea (Score:4, Insightful)

        by ranton ( 36917 ) on Tuesday November 10, 2015 @03:46PM (#50903499)

        How about H1-B Visa holders get paid 110% of the prevailing wage

        The corporations would try to game it by using job titles that don't fit the job. Like "junior apprentice programmer" requiring 20 years of experience.

        Just enforce the rules. The IRS can take the time to determine if a company is abusing tax law during an audit, so a government agency should be able to determine in a company is gaming the H1-B program. I think most people would be willing to accept some small abuses would happen, as long as blatant abuses are prosecuted.

      • by RelliK ( 4466 )

        I think just removing the requirement that a H1B visa is tied to a specific job would go a long way towards solving the issue and would, in effect, be self-regulating. If an employee is underpaid or mistreated he can vote with his feet -- unless of course the company can keep him on a leash via H1B visa. Remove the leash and situation self-corrects. Suddenly, it's no longer cheaper to hire H1B workers.

        I also like the idea of a H1B tariff, or making the cost of the visa substantial, say 10% of the prevailing

      • Immigration grants work visas based on projected requirements. People with those skills apply for a visa and get pre approval which allows them to apply for jobs and enter for interviews. Once an offer is made then if conditions are met (market wage, not a fly-by-night company, guarantee of minimum term, more intensive background checks, etc) then the work visa is granted. Allow the person a certain amount of time to find another job if they lose theirs or to transfer easily as long as it's in the same

    • Re:A better idea (Score:5, Interesting)

      by tempmpi ( 233132 ) on Tuesday November 10, 2015 @03:31PM (#50903349)

      The real prevailing wage is hard to check. Companies will just not mention some of the special skills of that person and then they can hire a very skilled person for more than 110% "prevailing wage", when they are really paying 80% prevailing wage. Or they are paying 110% prevailing wage but expecting 200% working hours.

      I think a much simpler solution would be to change the random lottery to a list that is ordered by wage and give the H1B only to people on the top of that list. That would make it hard to abuse H1Bs to drive down wages and give priority to the people that would likely really contribute the US economy. It could also potentially drive up wages for us workers: If companies are required to offer 200k per year to a foreigner with a certain skillset to guarantee him a H1B, then us workers with the same skillset will also notice what their skills are worth and will demand higher wages. And if the lowest wage that still qualified for a H1B is too low, then you just reduce the number of H1Bs.

    • Re:A better idea (Score:5, Interesting)

      by Raseri ( 812266 ) on Tuesday November 10, 2015 @03:54PM (#50903579)
      We all know that this won't change, and the only vote that matters is the one you cast with your wallet. The actual solution is to not do business with companies that use H1-B workers at all, whether those workers are employees of the company or "contractors" who are actually employed by InfoSys, Tata, and so on. For example, Harley-Davidson got rid of its IT department and contracted InfoSys to do the work. And, of course, InfoSys brought in nothing but Indians for the jobs. Not surprisingly, someone brought a discrimination suit against them, but I don't know how that turned out; more than likely InfoSys bought the judge. H-D can then claim that they just hired InfoSys, and InfoSys is the one hiring the workers. In this way, H-D's hands are clean, legally.

      What we actually need is a comprehensive list of companies that have done this (think Disney, etc), to facilitate boycotting those companies.
      • by sconeu ( 64226 )

        Wasn't that was Disney did? Hire Infosys, not H1-B directly?

        • by Raseri ( 812266 )
          Yes, in fact, this is what most of them do. It allows them to play innocent. It is also how many manufacturers in the United States employ illegal aliens.
      • We all know that this won't change

        That's what happens when you don't have a union or professional association who can lobby on your behalf. Sometimes the smartest people are the biggest idiots.

    • Re:A better idea (Score:5, Interesting)

      by Copid ( 137416 ) on Tuesday November 10, 2015 @04:03PM (#50903677)
      My proposal is simpler: Just auction off the visas and allow them to be traded on a secondary market. If it's typical to underpay an H1-B holder by $10K per year, that $10K gets built into the price of the visa automatically, removing the incentive. The market price would also be a useful indicator of actual labor shortages (i.e. if companies are paying the equivalent of a $50K per year premium, it's a sign that there really is a shortage of a particular skill set). Having visas with different expiration dates on the market would even provide a skills "yield curve" that you could plot to get in idea of future demand for different skills. It also guarantees that scarce visa slots go to the most valuable workers.

      It wouldn't exactly be a visa at that point so much as fungible work authorization token, but I don't think that would be the end of the world. Markets are very good at solving these sorts of problems.
    • by shakah ( 78118 )

      Maybe change it so the H-1B visas are awarded based on annual salary?

      In other words, issue the visas for the jobs that will pay the most. My guess is a transparent market like that would quickly get rid of wage disparities (though how to combat the lobbying effort+money that supports the status quo is the next obvious question).

    • Re:A better idea (Score:4, Insightful)

      by parkinglot777 ( 2563877 ) on Tuesday November 10, 2015 @05:01PM (#50904245)

      ... to work in the U.S. that isn't dependent on staying with a single employer. If someone else hires away your H1-B employee, that's your company's problem.

      This part is a misinformation. Currently, this is already included in H1-B visa deal. A person who is holding H1-B visa CAN change employer; however, the new employer must file for another H1-B petition (or transfer) as if it is a new petition except the remaining visa time may stay the same or get extended -- http://www.immihelp.com/visas/... [immihelp.com]

    • That wouldn't solve the problem here.

      The problem is not that there isn't a law about prevailing wage - there is. The problem is that the prevailing wage of generic IT consultants is low, while the prevailing wage of highly skilled software engineering specialists is high. The outsourcing companies are hiring moderately skilled software engineering specialists, into generic IT consulting roles at generic IT consulting prevailing wages. They are then selling services to other companies and displacing the h

    • 110%? No, still room to somehow game the "work study" that determines the salary. I say 150% or more, and the wage doesn't get paid from the employer to the H1-B, it goes through a government agency who collects that 150% and then passes the actual salary along, then takes the other chunk and puts it into a worker training program targeted at the shortage. We've seen in Canada ways that the Temporary Foreign Worker program can be abused in a similar fashion, and one of the better tricks was employers arr

    • how about auctioning the visas instead of giving them out in a lottery. those companies that really need the visas can bid the price up and those companies that are simply looking for cheap, imported labor will find that they are ending up paying the prevailing wage anyway.

    • by Rinikusu ( 28164 )

      I'm okay with this, but I would also say get rid of H1B altogether and give them green cards. College Educated technically inclined immigrants are EXACTLY the sort we should be encouraging to come, live, and stay in the US.

    • by bsharma ( 577257 )
      An extremely simple "better idea" - just set the minimum offered salary to $100K; That should filter off a lot of unnecessary applications. And, nobody can argue that employers are importing low cost workers.
    • How about H1-B Visa holders get paid 110% of the prevailing wage so that only the companies who seriously need a specialist and legitimately can't find any local talent will hire them. Also, give H1-B holders a ten year window to work in the U.S. that isn't dependent on staying with a single employer. If someone else hires away your H1-B employee, that's your company's problem.

      Just kill the H1-B program. Companies will either pay market rate or if there's truly a shortage, which in most cases there isn't or train up their existing employees (which they don't like to do now) or even support training programs in schools to provide a future educated resource pool.

  • Ummmm ... DUH? (Score:5, Insightful)

    by gstoddart ( 321705 ) on Tuesday November 10, 2015 @02:56PM (#50903053) Homepage

    Now, show of hands ... who the hell is surprised to find out that this whole thing is being misused? Anyone?

    The whole bloody point is to drive down wages and replace American workers.

    Anybody who tells you otherwise is lying to you.

    How anybody could possibly be shocked at this 'revelation' is mind boggling.

    • Agreed that H1-B is a gift to employers, but I'd take it a step further:

      Even if the Zuckerberg/Obama H1-B rhetoric were true, you have a politicized fed program attempting to address a market need. Markets react nearly instantly, feds react (depending on who controls House/Sen/Prez) in 2-6 years. So you have things like the antiquated $60K exemption (probably made more sense way back when rule was enacted). A "good" H1-B policy may be impossible given the way it is currently managed.

  • by linebackn ( 131821 ) on Tuesday November 10, 2015 @03:02PM (#50903123)

    If U.S. companies don't want to hire U.S. workers, then these companies need to stop pretending, and just get the fuck out of the U.S altogether.

    • If U.S. companies don't want to hire U.S. workers, then these companies need to stop pretending, and just get the fuck out of the U.S altogether.

      They are, but only to avoid paying taxes in the US. Of course they're happy to keep a subsidiary or two in the US that does the selling while the profits are shoveled out of the country.
      Tax Inversion:
      https://en.wikipedia.org/wiki/... [wikipedia.org]

  • I work for a large bank that rhymes with face. I have watched the area I work in go from 90% american workers to 90% H1-B workers. And that wouldn't be so bad, except on top of that, they are offshoring like crazy as well, and those guys on the other side of the planet do not do anything.

    Tickets come in during the night, and they sit on them. Then, when (we) the day shift comes in, they forward us all the tickets, meaning we start every day with a flood of work. What is the point of paying the offshore dwee

    • Chase feed work is out sourced as well to per job field people and when I used to call in at times the overseas phone people sucked and the tickets got mixed up quite a bit with alot of WTF going on as well.

  • Scrap H1B use EB-1 (Score:4, Interesting)

    by oh_my_080980980 ( 773867 ) on Tuesday November 10, 2015 @03:39PM (#50903425)
    The H1B program is broken in it's current form. It needs to be scrapped. Like other countries, e.g., Germany, the guest work visa program needs to be tightly monitored. No company should be allowed to flood the application process. No outsourcing or contractor companies should be allowed to apply, period. The reality is there is not shortage of STEM applicants. Plenty of qualified people. If you want to hire people from 3rd world countries, thereby undercutting labor rates, then locate your business there. You'll do more to help that country raise their standard of living by doing that. Not that you were truly interested in doing that.
    • by Ash-Fox ( 726320 )

      If you want to hire people from 3rd world countries, thereby undercutting labor rates, then locate your business there. You'll do more to help that country raise their standard of living by doing that. Not that you were truly interested in doing that.

      In my experience, what seems to commonly happens in the UK when larger companies can't get the talent they desire on visas (I get the impression it's for cost reasons), is they just outsource all the work to a consultancy in another country. They end up paying

  • Simple solution (Score:5, Insightful)

    by saigon_from_europe ( 741782 ) on Tuesday November 10, 2015 @03:40PM (#50903435)

    As there is currently more visa applications than available visas, the solution can be very simple. Instead of lottery as it is done now, I would simply give visas to companies that plan to pay the highest salary. That would make companies to raise salaries if they really need applicants. That would also solve problems with definition of "prevailing wage" etc.

  • by angel'o'sphere ( 80593 ) on Tuesday November 10, 2015 @03:45PM (#50903487) Journal

    Is it only me who always reads H-1B Virus?

  • by Gavrielkay ( 1819320 ) on Tuesday November 10, 2015 @03:49PM (#50903523)
    If there really were a shortage of tech workers, which I don't believe for a moment, the H1-B program is still about indentured servants. They should speed up/open up proper permanent residencies for these people so they come in with all the same rights and expectations of the Americans they are currently displacing. Holding them hostage to one company, training them to work well with Americans and then sending them home to lead off-shored teams is so bad for American workers that it's ridiculous.
    • by iamacat ( 583406 )

      If there really were a shortage of tech workers, which I don't believe for a moment

      I interview at least one person per week for a well known, desirable company. In the last year, not one has been able to write a half a page of code using two hashtables and rational thought - no gotcha insights required. I say there is in fact a huge shortage. Say, anyone wants to apply?

      • by eWarz ( 610883 )
        It's not that there is a shortage, it's that many folks with talent are already involved in other endeavors, and in addition, there is a huge influx of people who are new and simply want to earn more and are therefore are willing to apply to jobs beyond their skill level. Because of this, you need to be more aggressive about recruiting, and slightly less aggressive about the tests. You can't judge a good programmer by a half a page of code any more than you can judge a writer based on a half a paragraph o
  • > "Mark Merkelbach and his small engineering firm in Seattle. For water projects in China, he needed engineers and landscapers who speak Mandarin"

    You can not make knowledge of a foreign language a requirement for an immigrant visa.

    • Why not?

      • Because 90% of the employers would add knowledge of Hindi as a essential requirement to their job description and thereby make it much easier for the contracting firm to prove no American citizen meets the job requirements.

        • by tnk1 ( 899206 )

          Strictly speaking... they should be able to make a language a reason to hire overseas, that is a valuable skill.

          However, they should be challenging the company about why they need that for every programmer or admin, and that is the problem. The government is the gatekeeper, but it doesn't even know who to let through the gate. It just listens to the lobbyists tell them all about how there is a "shortage" of workers.

          Let the market decide by only giving H1-Bs to the companies willing to pay the most to fill

  • by swb ( 14022 ) on Tuesday November 10, 2015 @05:49PM (#50904577)

    Just what is the end game to gutting the middle class, anyway?

    Is the whole goal here just to have like 3 people who control 99.99999% of the wealth?

    Surely once the the middle class is denuded, they'll start going for the "HENRYs" (high earners, not rich yet) and find a way to strip them of their earning potential and wealth, too.

    At least in ancient Rome the emperors would stage feasts, festivals and games.

    • by tnk1 ( 899206 )

      The problem is that you believe it is a conspiracy. It is nothing of the sort. It is a mechanism that is off the rails, and everyone is going along for the ride. Some people get insanely rich off of it, the rest get run over.

      However, don't think for a minute that this is a plan. There is no plan, only short term gain and stupid investors.

      There are vast inequalities of opportunity in the world, and those can be used to the advantage of those who are willing to break down those barriers. The hope is that

    • Just what is the end game to gutting the middle class, anyway?

      Frighting that you do not already know this, sincerely.

      The -entire point- is to crate a have / have-not society; which BTW is the norm throughout human history. The concept of a "middle class" is but an aberration. Be it communism or fascism, by any other name it's feudal. In a democracy, people vote not for whom they like, but rather out of fear their "benefits" will be taken away. Think of it as indentured servitude.

    • by Xyrus ( 755017 )

      At least in ancient Rome the emperors would stage feasts, festivals and games.

      McDonald's, New Year's Eve, NFL.

      The end game of capitalism? The French Revolution. You can only push people so far. There's a point where the laws of society and morality lose their meaning, usually soon after the masses start starving and suffering. At that point it doesn't matter how many guns or gates you have. You're not going to stop an angry mob who thinks they have nothing left to lose and view death as a reprieve from a tormented life.

    • There is no grand plan, conspiracy or end game. There are just a bunch of people who would rather be the king of a mound of shit than a prince on a mountain of gold, enabled by a second bunch of people who would see the world go to hell in a bucket so long as they get to touch the handle.
  • by tompaulco ( 629533 ) on Tuesday November 10, 2015 @05:58PM (#50904637) Homepage Journal
    The job that they want an H1B for must be presented to the government and a $10k fee paid to the government to cover expenses. The government will interview qualified candidates and if the company does not take one of them, they do not get an H1B either. If no qualified candidates are found, the salary is raised until a qualified candidate is found, up to a maximum of 3 standard deviations from the average salary for the position. If there are still no qualified candidates, then you can have an H1b.
  • These H1Bs are an infusion of folks who are paid $60K, which is higher than average US income, into US population. They are now travelling, eating out in restaurants, sending their kids to daycare and buying computer hardware and software. When otherwise, they would spend their disposable income in India or whatever country they come from.

    The only practical downside is restriction on transferring between jobs, which depress wages for both H1B holders and US citizens. Give folks a year to either find another

    • by eWarz ( 610883 )
      Yes, but $60k/year is NOT the typical income for IT workers or software engineers. The median income for software engineers for example is around $92k.

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