Business & Finance
02:07 PM

Politicians Mull H-1B and L-1 Visa Reforms

Can they tweak the law without driving more IT work out of the country?

A growing backlash among Tech workers against the use of foreign nationals to fill IT jobs is gaining political steam, with lawmakers proposing changes to visa laws that let companies import IT talent.

U.S. Rep. John Mica, R-Fla. -- Photo by Newscom

Rep. Mica wants to ban transfers of L-1 visa holders to third-party companies, saying current use violates spirit of the law.
U.S. Rep. John Mica, R-Fla., introduced a bill last week that would prohibit companies such as Tata Consultancy Services and Infosys Technologies Ltd. from using L-1 visas to transfer a worker from their Indian headquarters to their U.S. subsidiaries, then hire that person out to U.S. companies. Mica says that violates the spirit of the law, which was to let multinational companies transfer specialists to the United States. He wants to ban transfers of L-1 holders to third-party companies. "Folks like Tata have gone beyond the intent of the law and created shell operations to meet requirements of the law--and displace American workers," Mica charges. Tata, in an E-mail to InformationWeek, wrote that it "complies with both the letter and the spirit of all relevant employment and immigration laws."

U.S. Rep. Nancy Johnson, R-Conn., took note of the controversy, querying insurance companies in her state about their use of foreign workers on H-1B visas. H-1Bs are general visas that are more restrictive than L-1 visas. Johnson concluded the companies aren't violating the law, but she believes the restrictions should be tightened because of rising U.S. unemployment.

The efforts show that the heavy lobbying of organizations and activists opposed to the use of H-1B and L-1 visas is getting noticed. In the late 1990s, Congress raised the caps on H-1B visas twice after lobbying from the tech industry, which said it couldn't find enough qualified workers. An InformationWeek analysis of U.S. Bureau of Labor Statistics found the unemployment rate among IT workers rose to 5.2% in 2002, from 3.7% in 2001. Mica's office says there are more than 325,000 L-1 visa holders in the United States, and the U.S. Immigration and Naturalization Service issued 79,100 H-1B visas in 2002--well below the 195,000 cap, which will drop to 65,000 in 2004.

Activists argue that's not low enough, and those jobs could be filled by U.S. citizens. "This is a complete fraud our government has inflicted on American citizens," says Mike Emmons, who says he was about to lose his job as an IT contractor with Siemens AG to a Tata employee before leaving last year.

The fervor of this backlash puts business-technology managers in an uncomfortable position, as many are committed to cutting costs using low-cost offshore outsourcers. A Siemens spokesman says the company's telecommunications division, where Emmons worked, whittled IT staff from 106 employees to 30 and contracts 12 employees from Tata. Aetna Inc., which responded to Johnson's query, has cut IT staff 13% to 2,500. It employs 13 H-1B visa holders and contracts about 90 workers through India-based Infosys for what a spokesman calls "a contingent, on-demand workforce."

Lawmakers understand that asking companies to use fewer foreign workers is tricky. "We don't want to create a situation where [companies'] costs become so prohibitive that they don't have some alternatives and move the whole operation offshore," Mica says. That's already happening at many large companies. Just last week, Hewlett-Packard said it would continue to slash U.S. jobs while growing operations at its Indian subsidiary.

Photo of U.S. Rep. John Mica, R-Fla. by Newscom

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of July 17, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.