Making Sure H-1Bs Actually Work for Their "Employers"

By John Miano on January 21, 2010

Read more on IBM and H-1Bs

A couple of news items have converged with research. Recently, I have been reading the legislative history of the H-1B program. It is interesting to see how some things have changed and other things keep repeating. The H-1B visa was created in the Immigration Act of 1990. From the House Judiciary Committee we have the findings that:

The Committee believes that increased immigration levels should not lead to a dependence on foreign workers. [Igor I. Kavass, Bernard D. Reams, Jr., "The Immigration Act of 1990: A Legislative History of Pub. L. No. 101-649 45 1997"]

Obviously, Congress was wrong. Now industry asserts it is dependent upon foreign labor. Giving more foreign labor to industry is like giving heroin to an addict -– it just creates greater dependency.

Further down the same page of the House Judiciary Committee report is this interesting statement:

Employers seeking foreign workers have a special obligation to ensure that obtaining workers from abroad is a last resort.

Unfortunately, Congress did not put this intent into legislation. Now H-1B labor is the first resort. The H-1B program created the business of importing foreign labor. As early as 1996, the Department of Labor warned:

We found that 6 percent of the 54,867 H-1B aliens who worked for the employer were contracted out by the petitioning employer to other employers. Some of the petitioning employers operate job shops -- companies which hire predominantly, or exclusively, H-1B aliens then contract out these aliens to other employers. The current H-1B law does not prohibit this practice; however, there is a concern that these job shops are paying the H-1B aliens less than prevailing wage, making contracting out with job shops more appealing to the U.S. employer. While we did not specifically audit for job shop contractors, in our opinion, the H-1B program was not intended for an employer to establish a business of H-1B aliens to contract out to U.S. employers. [U.S. Dept. of Labor, Office of Inspector General, Office of Audit, "The Department of Labor's Foreign Labor Certification Programs: The System Is Broken and Needs To Be Fixed," May 1996]

Now it is possible that that the majority of H-1B workers are contracted out in this manner.

The way the system now works is a foreign worker pays the employer the visa costs up front. Since paying certain visa fees is illegal, this payment is called a "deposit." The employer then searches job web sites until it finds actual work for the employee. When the "employer" finds a job for the "employee," it has the "employee" enter the country. The "employers" can simply of what the actual job pays. Clearly this is not what was intended but it has been allowed to go on by a failure of congressional oversight and abusive agency interpretations.

The Obama administration has
just announced it is taking the step of requiring that H-1B workers actually be employees of their H-1B employer.

At least one immigration lawyer has raised alarm that DHS might will insist "that there must be an employer-employee relationship at all times during throughout the requested period of H-1B employment." He goes on to say, "We do not need another restrictive memo, which will kill the spirit of innovation and entrepreneurship, which also brings with it expertise, that the U.S. so vitally needs." It was that same "spirit of innovation" that brought the White Lion slave ship to Virginia in August 1619. Now, instead of privateers and slave markets, we have immigration lawyers and bodyshops profiting from the exploitation of workers.

The spin is the H-1B violators are the small fly-by-nighters. Here is an excerpt from a posting for a Database Administrator Job located in Sunnyvale, Calif., posted to the Internet (full posting now gone –- summary remains here:

1) Only valid H1 Holders who are currently in the US with relevant and valid Payslips

2) We will not consider any Green card Holders for the requirements.. IBM does not take Green Card Holders. IBM does not process Green Card for any H1 holders. Pls communicate this point to the candidates clearly if they question..

3) Pls Target Indian Citizens are they will be hired on the Payroll of IBM India

4) Pls target Indian Citizens as the candidates might be required to return back to India In case IBM is unable to place them with any other client/project, after the assignment for which they are hired gets completed and hence will need to a citizen to return back and work at IBM India..

5) Please ensure to check with the candidates if they are Open for relocation to Any other location within the US.

When you read ads like this, you understand why we have record high unemployment for U.S. tech workers.

We will have to see if USCIS actually intends to start enforcing the law, after 19 years of deliberate neglect under previous administrations.