Immigration Laws: October, 2003 - Number #03

Print-Friendly Version There were 197,537 H-1B admissions in FY02, but not all of these admissions counted against the 195,000 annual ceiling on people coming in with new H-1B visas. Multiple entries by a single individual are in the 197,537 total, likewise renewals of visas of people already present. The entries of foreigners with H-1Bs to work for non-profits and universities are also in the total though they do not count against the ceiling. Thus in the end only 79,000 of the 197,537 admissions counted against the 195,000-a-year ceiling on new H-1B admissions.

On October 1, 2003, the annual ceiling on H-1B admissions fell to 65,000, the $1,000 per worker fee for hiring H-1B workers expired, and 6,800 H-1B visas are reserved for workers from Chile (1,400) and Singapore (5,400) under new free trade agreements. H-1B visas allow foreign workers to remain in the US up to six years.

DHS reported that the number of H-1B visas for initial employment in technology industries fell from 105,692 in 2001 (52 percent of all new H-1B visas issued) to 27,199 in 2002 (26 percent of all new H-1B visas issued). There are an estimated 900,000 H1-B employees in the US; 35 to 45 percent are from India. DHS reported that H-1Bs earned a median $60,000 in 2002, compared to $58,500 for all computer systems analysts. Another report put the mean salary of H-1B workers at $55,000 a year, and the average for US BA-degree holders at $46,000. (www.bls.gov/oes)

Intel Corp. Chairman Andy Grove in October 2003 said the US could lose the bulk of its information technology jobs to overseas competitors in the next decade, largely to India and China. IT professionals in India earn $5,800 a year and in China, $8,900 a year; India has about 350,000 engineering college graduates a year. The Wall Street Journal reported that: "white-collar, free-trade opponents are linking up with organized labor and old-line manufacturers, deepening the opposition in the US to liberalized trade and making Congressional passage of any trade pact more problematic."

Several bills aimed at tightening admissions under the H-1B and L-1 visa programs were introduced in Congress. The L-1 visa program allows an unlimited number of managers, executives, and workers with "specialized knowledge" of a company's operations to transfer within multinational firms operations in the US for up to seven years. Some 57,721 L-1 visas were issued in 2002, and their number is rising as multinationals realize they do not have to file paperwork for each worker.

The AFL-CIO in August 2003 issued a call for changes in the H-1B and L-1 visa programs: "Employers, especially in high tech, are abusing temporary visa programs to allow hundreds of thousands of guest workers with no rights and no job security to take job opportunities in the U.S." The AFL-CIO wants to limit H-1B workers to three years in the US, down from six, to establish an economic needs test to be met before an employer can have H-1Bs admitted, to prohibit US employers from laying off US workers and hiring H-1Bs, and to prohibit H-1B workers from changing US employers.

The related L-1 debate started when a Siemens subsidiary in Florida outsourced its software maintenance to Tata, a Indian software company with a branch in the US. About a year ago, in Florida, Siemens' US workers trained Tata's Indian workers, and were subsequently themselves laid off and most of the software maintenance work transferred to India. But when Tata in India could not perform all the tasks that Siemens needed done, Tata's US branch brought some
Indian workers to Florida on L-1 visas and assigned them to Siemens. Lawyers and government agencies disagree on whether Siemens' actions were lawful but Rep. John Mica (R-FL) said: "Certainly the intent of Congress in creating H1-B and L-1 visas was not to replace American workers." BICE reported 316,699 L-1 visa admissions in FY02, down slightly from FY01.

In July 2003, S. 1452 and H.R. 2849 were introduced to add a $1,000 fee for each L-1 visa, require companies to pay the prevailing wage to L-1 visa holders, and prohibit L-1 visa holders from working for any employer other than the one who got them the visa. Co-sponsor Rep. Nancy Johnson (R-CT) said: "More and more, American workers are being escorted out the back door while foreign workers carrying H-1B and L-1 visas are walking in the front door."

A third visa issue arose when Polish workers installed equipment in an expanding Mercedes-Benz assembly plant in Alabama on B-1 business visitor visas. The Polish workers, who say most of their $1,100 a month wages are deposited in Poland, remain in the US for three to six months. Mercedes received $253 million in incentives to build the plant in the mid-1990s, and an additional $119 million in state and local subsidies for the current $600-million expansion.

Revenue from business process outsourcing, or moving traditional office jobs overseas, is projected to be $1.8 billion in 2003, as more US firms move software development, call centers and other jobs to lower-wage countries such as India. However, an IBM IT worker laid off when IBM shifted work overseas was denied benefits under the Trade Adjustment Assistance program because, DOL ruled, he did not make a product that could be imported. TAA provides cash payments of about $200 a week and training for up to two years to workers who lost their jobs because of increased imports, but the $400 million a year program has primarily benefited laid-off manufacturing workers. In 2002, TAA was expanded to include new categories of workers (but not service workers), lengthen the period of cash benefits, and give tax credits to help buy health insurance, which may boost its cost to
$1.2 billion a year.

Between the fourth quarter of 2001 and the fourth quarter of 2002, nominal wages for tech workers rose by 1.7 percent, which was below the inflation rate of 2.2 percent. San Jose had the highest unemployment rate among metro areas, 9.9 percent in summer 2003, and middle-income jobs paying $40,000 to $80,000 a year continue to leave the area.

J-Visas. In FY02, some 253,841 foreign students came to the United States on temporary J-1 work/travel visas, up 61,000 from 1998. Most come from Eastern Europe and Latin America, and earn far more working
long hours in resort jobs than they could earn at home, and US hotel and restaurant employers praise the foreigners "work ethic" in jobs that pay the minimum wage or a bit more.

Most of the foreign students arrive in debt, owing $500 or more to agencies who find them jobs and obtain the visas, and up to $1,000 for airfare to their US jobs. Many US employers provide them with housing, and some charge the students for housing and meals, but most
report saving $5,000 or more after three to four months in the US.