California Lawmakers Approve Anti-Offshoring Legislation - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Leadership

California Lawmakers Approve Anti-Offshoring Legislation

California legislators this month approved a bill prohibiting state universities from contracting for services performed by workers outside of the United States that would displace California employees.

The University of California’s decision to offshore some IT work at its San Francisco campus sparked a backlash. U.S. Sen. Chuck Grassley (R-Iowa), the chair of the Judiciary Committee, demanded answers from the university. News show 60 Minutes interviewed affected IT workers.

California state lawmakers have now responded.

The state Senate and Assembly this month approved legislation prohibiting the University of California (UC) and the California State University (CSU) “from contracting for services performed by workers outside of the United States that would displace a UC or CSU employee.”

Image: Shutterstock
Image: Shutterstock

The bill (AB 848) was introduced in February by Assembly member Kevin McCarty (D-Sacramento).  The Assembly this month voted 59 to 19, to approve it. The Senate vote was 33 to 6.

The legislation awaits Gov. Jerry Brown’s signature, and the vote margin makes that likely.

In September 2016, UC at San Francisco disclosed it had entered into a $50 million, five-year contract with India-based IT services firm HCL. The university said it expected $30 million in savings over this period.

The contract resulted in the loss of 49 IT career position and the elimination of 48 other positions that were either vacant or filled by contracted staff.

The legislation has potential loopholes. It doesn’t bar offshoring of work, just the displacement of university workers. A Senate amendment said that if the work is performed outside of the U.S., the universities “shall not, for the duration of the contract, displace an employee performing that specific work.”

Lawmakers approved the legislation knowing it might increase costs. CSU told lawmakers that it could “see higher bids in the range of 10% to 30% by contractors who wish to cover their increased risk.”

The cuts at UCSF amounted to a 17% reduction in staffing, according to the legislative analysis. "The same 17% loss ratio across UC's 10 campuses and five medical centers could result in a total of 613 lost positions. UC Berkeley, UC Los Angeles, and UC San Diego could each lose over 100 career IT positions," it said.

This legislation had broad goals.

Its sponsors pointed out that contractors and subcontractors “are using taxpayer dollars to create jobs in foreign countries. State taxpayer funds should be used to create jobs in the United States and California.”

A lawsuit was filed in California Superior Court by 13 of the affected UCSF IT employees alleging race, age and sex discrimination.

Their attorney, Gary Gwilliam in Oakland, said they were glad to see the outsourcing legislation win approval. “Our clients to a person strongly felt that this was wrong and they did not want the university to go out and do this in other cases,” said Gwilliam, in an interview.

Randall Strauss, an attorney who is working with Gwilliam on this case, said, “I think California should be angry that it took a bill to have the university not take away California jobs,” he said.

Patrick Thibodeau is a reporter covering enterprise technologies, including supercomputing, workplace trends and globalization. His work on outsourcing and H-1B visa issues has been widely cited, read on the floor of the U.S Senate, and has received national awards for ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Zman7
50%
50%
Zman7,
User Rank: Strategist
9/28/2017 | 11:13:37 AM
Offshoring vs Outsourcing
The email I received used the term Outsourcing in the title, but the article really refers to Offshoring. BIG difference!
moh1bs
50%
50%
moh1bs,
User Rank: Apprentice
9/27/2017 | 5:38:43 PM
Amazing
That's amazoing, motly because it's California.
Commentary
Enterprise Guide to Edge Computing
Cathleen Gagne, Managing Editor, InformationWeek,  10/15/2019
News
Rethinking IT: Tech Investments that Drive Business Growth
Jessica Davis, Senior Editor, Enterprise Apps,  10/3/2019
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
White Papers
Register for InformationWeek Newsletters
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
Slideshows
Flash Poll