H-1B visa program reform moving forward

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 foreign 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 high-tech, 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 non-immigrant 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 long-standing 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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