Laws: January, 2003 - Number #2

The US unemployment rate was six percent in November 2002-- 8.5 million workers were jobless and 134 million were employed. In California, the unemployment rate was 6.4 percent, reflecting 1.1 million jobless and 15.5 million employed.

An estimated 1.1 million workers were employed in the informal economy of Los Angeles county in 2001, up from 650,000 in 1989; their share of the labor force was 14 percent, up from six percent. Los Angeles county has 9.5 million residents (44 percent Hispanic), and employment in November 2002 of 4.6 million- 300,000 workers were jobless. The Janitorial Maintenance Task Force won convictions against several Palmdale-based janitorial firms in November 2002 that bid low to win cleaning contracts, and made money by not paying required payroll taxes.

Certifications. The US issues up to 140,000 immigrant visas a year for economic-employment reasons; 107,024 were issued in FY00 to principals (50,135) and their dependents (56,889). Most "economic immigrants" were already in the US and adjusted their status from nonimmigrant or unauthorized, 84,971 or 80 percent in FY00.

The fact that many foreigners in the US want to stay as immigrants has spawned an active consulting industry that helps them find employers to "sponsor" them for employment-based immigration visas. A few types of foreigners do not need a US sponsor to apply for an immigrant visa, such as "aliens with extraordinary ability" and "outstanding professors and researchers."

However, in most cases, a US employer must ask the US Department of Labor to certify that US workers are not available before an immigrant visa will be issued to an economic immigrant. The DOL process is called labor certification, and involves the employer advertising for US workers at prevailing wages, noting who responded and why they were not hired, and submitting the results to DOL.

DOL and state employment services do not check employer submissions carefully. In one of the largest labor certification frauds ever prosecuted, the owner of Capital Law Centers in the Washington DC area was convicted of submitting applications for immigrant visas on behalf of US employers who did not request them.

The foreigners paid $8,000 to $20,000 to be sponsored as needed workers, and Capital Law Centers submitted false employer certification requests to DOL, asserting that US workers were unavailable to fill the jobs for which immigration visas were requested, and that the foreigners had unique skills, such as cooking. DOL routinely approved the requests, most of which were for short-order cooks. The fraud was discovered only when DOL mistakenly sent an approved certification to one of the restaurants instead of Capital Law Centers; the restaurant called the INS to report that it did not request certification. The government estimated that Capital Law Centers made $10 million from the scheme.

Most labor certifications are requested for so-called third-preference immigration visas, often issued to foreigners with a BA but no advanced degrees. Up to 5,000 immigration visas are available for unskilled immigrants and their families- many go to maids sponsored by their US household employers. In FY00, some 4,600 immigration visas were issued to unskilled foreigners- 81 percent of the principals receiving these visas were in the US and adjusted their status to immigrant. In most cases, as soon as a foreigner in the US receives an immigrant visa because he is a needed worker, he quits working for the employer who sponsored him.

In most cases, penalties for immigration fraud are light. Two Korean American brokers bribed an immigration supervisor to obtain green cards for 275 Koreans, each of whom paid up to $30,000, received three-year jail terms, while the immigration supervisor got probation for his cooperation.

H-1B. Until 1998, a maximum of 65,000 H-1B visas were issued to foreigners with at least a BA arriving to fill a US job that requires a BA: the aim of the H-1B program was to "fill short-term needs for qualified professional staff." Each H-1B visitor could stay for up to six years. In the midst of the high-tech boom, the number of H-1B visas requested rose sharply, and the annual limit was raised twice, first to 115,000 a year and then to the current 195,000 a year-- the 8,000 to 10,000 H-1B visas a year issued to foreigners employed by universities and nonprofits are excluded from the 195,000 limit.

About 163,200 H-1B visas were issued in FY01, and 118,000 in FY02; including 44,000 to Indians, 7,600 to Chinese, 6,100 to British, and 3,800 to Japanese workers. About 900,000 H-1B workers were employed in the US in Fall 2002. US employers pay $1,136 to the government for each visa, and many pay US attorneys another $3,000 to $5,000 to prepare the applications.

The annual ceiling is scheduled to revert to 65,000 in FY04. Instead of fighting to maintain the 195,000 ceiling, many high-tech firms want to exempt more firms from the ceiling. For example, it has been suggested that only H-1B dependent firms, those with 15 percent or more H-1B workers, be subject to the annual ceiling.

Early in 2001, the American Electronics Association estimated US technology employment at 5.7 million; most jobs were in manufacturing and the average wage was $70,000 a year. By the end of 2002, technology employment had declined to 5.1 million, and few expect a rebound with economic recovery because many technology jobs are moving overseas. Just as with other manufacturing, the movement of low-value computer chips and call centers abroad, usually to India and China, is expected to be followed by the movement of jobs filled by professionals, as firms shift engineering and other higher value work to cheaper locations.

Forrester Research Inc (www.forrester.com/) released a study projecting that 3.3 million white-collar US service jobs will be shifted overseas in the next 15 years, and that 550 of 700 service job categories will be affected as US employers seek "better quality work for 50 percent of the cost." According to Forrester, in 2000 some103,000 US IT-related jobs were outsourced; in 2015, some two million are expected to be overseas, including 1.6 million jobs such as answering help lines. US help-line workers cost about $40,000 a year in salary and benefits, compared to $4,000 a year in India, which is projected to get 50 percent of the outsourced jobs.

However, as American companies increasingly move their software development tasks out of their own offices to computer programming companies here and abroad, new concerns are being raised about the security risks involved. There is some nervousness about the possibility of abuse by hackers, organized crime agents and cyberterrorists in nations like Pakistan, the Philippines and Russia, with experts saying that secret bugs could be inserted into the code, so that companies would have to pay to avoid problems at a future date.

High-tech in the Dallas area meant telecommunications in Richardson, but employment fell from 200,000 to 170,000 in the past year. Many of those who thought the area was recession proof are now saying the high-tech bust is worse in the Dallas area than elsewhere.

Sun Microsystems was sued by an employee laid off in November 2001 for violating H-1B regulations, and a DOL administrative judge held a hearing to determine if Sun violated H-1B regulations. Sun and most US employers do not have to seek US workers before hiring H-1B workers, and can lawfully lay-off US workers to hire or retain H-1Bs. In October 2002, DOL concluded that Sun committed only minor violations- it did not properly post notices that it intended to hire H-1Bs. That decision was appealed by the laid-off Sun worker in December 2002.

J-1 Doctors. The J-1 visitor exchange program permits foreign doctors to do their residency training in the US-- they must normally return to their countries of origin for at least two years before returning to the US. However, if the foreign doctor agrees to work in medically underserved areas, they can remain in the US and eventually receive an immigrant visa. Beginning in 2003, each state can sponsor up to 30 J-1 foreign doctors a year for immigrant visas. Under previous rules limiting each state to 20 sponsorships, 3,000 foreign-trained doctors became immigrants between 1994 and 2001.

Unions/Discrimination. The US Department of Labor's Employment Standards Administration in December 2002 proposed rules that would require US unions to itemize expenditures on politics, lobbying, organizing and strike benefits. The Labor-Management Reporting and Disclosure Act of 1959 requires unions to report their finances to DOL, and DOL said it was updating LMRDA regulations.

There are two major economic theories of discrimination in labor markets. Taste-based discrimination argues that employers, customers, co-workers or supervisors have an aversion to minority applicants, even if they know that minorities are equally productive. Statistical discrimination, on the other hand, assumes that employers personally harbor no prejudice, but cannot perfectly predict workers' productivity, so they assess an applicant by comparing her to her racial group.

An experiment that sent almost identical resumes in response to job ads, some with names commonly given to Blacks, such as Tamika and Tyrone, and some with names commonly given to whites, such as Kristen and Brad, found that 10 percent of those with "white-sounding" names were called for interviews, compared to seven percent of those with "Black-sounding" names. There was no difference in the called-for-interview-rate between men and women. !-- Source -->