A high-tech battle over immigrants Firms seek to import more professionals San Diego Union-Tribune, June 8, 1998 By Marcus Stern COPLEY NEWS SERVICE WASHINGTON -- The biggest immigration battle of the year is coming to a head this month, but the focus isn't on fences, farm workers or food stamps. Instead, it's on computer programs and the people who write them. For the past year, American high-tech companies have been working with Congress to expand an 8-year-old program that brings in 65,000 foreign professionals each year. The companies want the limit raised to 115,000. Because the visas are good for up to six years, the increase would mean that -- under this program alone -- as many as 690,000 foreign workers eventually could be employed in the United States at any given time. The lobbying has continued at a time when some of these companies have laid off American workers or imposed hiring freezes. Last month, Intel, one of the driving forces behind the program's expansion, said it would cut 3,000 positions because of slow computer sales. One crucial question is at the center of the upcoming congressional vote: Should lawmakers add protections to help American programmers and engineers who compete for these coveted jobs? Most of the foreign workers come from India and China, where they likely earned about $2,500 a year. In the United States, they stand to make almost 15 times that amount. U.S. employers say safeguards aren't needed. They say they hire foreign workers only when they can't find skilled Americans to do the job. "If we had rampant problems with the program, I probably wouldn't even be proposing an increase," said Sen. Spencer Abraham, R-Mich., chairman of the Senate immigration subcommittee and the high-tech industry's champion on this issue. "We don't have problems with the program, because we have very responsible employers who are truly playing by the rules." But the rules in this high-stakes game are extraordinarily loose: * Some of the top users of the program, which requires an H-1B visa, are foreign-owned firms that don't consider hiring American engineers or programmers. They recruit only from abroad. * Current safeguards, designed to make sure employers can't bring in H-1B workers at low wages, don't work because "prevailing wage" figures are often misleading. * Labor Department officials say their hands are tied and their eyes blindfolded under the current regulations. They've asked Congress for either a meaningful oversight role or no role at all. * The Immigration and Naturalization Service has so completely abdicated its H-1B responsibilities that it doesn't bother to check if the foreign workers go home when their visas expire. * Many of the most active H-1B importers are temporary staffing agencies that recruit foreign workers simply to lease them to U.S. companies. The U.S. companies like the arrangement, because they can hire for specific projects and then let workers go when the projects are over. This lowers their overall labor costs. High-tech companies were delighted last month when the Senate passed a bill that would increase the number of guest workers without tightening the regulations. But they reacted angrily to the bill that's now moving through the House. It would require employers to attest that they at least tried to find American workers, and that they hadn't laid off anyone to make room for an H-1B worker. The regulation would add two checkoff boxes to the current one-page Labor Department form. But some high-tech employers say that is too much. They'd scrap the H-1B increase entirely, rather than put up with new regulations. The final shape of the law that Congress passes in the coming weeks could determine the value of tomorrow's U.S. high-tech jobs. If companies continue their growing reliance on temporary foreign workers, will these prized jobs of the 1990s retain their luster in the 21st century? Or will wages and working conditions erode as the high-tech work force fills with foreign programmers willing to work longer hours for less money? *** Saju James sits nattily attired in a double-breasted blazer in the conference room of Tata Consultancy Services in the Washington suburb of Rockville, Md. Tata is an international technology firm based in India and one of the biggest users of the H-1B program. With its corporate cousin, Tata Infotech, it was the second-biggest recipient of H-1B visas last year at 1,128. Tata Consultancy, the larger of the cousins, has about 1,500 people working in the United States. The programmers are paid by Tata, but they actually work under contract for some of America's biggest and best-known technology firms. James' job is to obtain their H-1B visas. Upon request, he brings out files on 13 Tata employees working in San Diego on a project with UCSD. The H-1B law requires employers to make the files available for public inspection. All 13 were top graduates of India's premier technical institutes, he said, and each had 18 months of specialized on-the-job training in India before coming to the United States. The group at UCSD is working on a multimedia project that requires many of today's "hot skills." They are precisely the kinds of programmers in demand in today's labor market. Tata pays them an average of $35,300 a year. Although entry-level salaries in the high-tech industry fluctuate, that figure appears to be low. At a Senate hearing earlier this year, a CEO said his company gave a new car to one engineering graduate as a signing bonus. A University of Michigan dean told of a prevailing wage of $66,851 for someone with an applications programmer degree. Yet the Tata engineers, who have equivalent degrees, make only about half that much. The H-1B program's loose regulations, which the computer industry helped shape, make the wide range in salaries possible. Employers are required to pay their H-1B workers at least the "prevailing wage," a figure drawn from salary surveys of local businesses. But employers are allowed to pick and choose from a wide range of salary surveys, including some that are outdated or flawed. Naturally, they tend to pick the lowest prevailing wage available. The prevailing wage listed for the Tata employees at UCSD is $33,370. The source is the Economic Research Institute. An official with the institute freely admitted that its survey shows a higher prevailing wage -- $37,700. But, he said, a government survey lists a prevailing wage of $33,176. The rate is artificially low, he said, because it is based on 2-year-old data and lumps professionals with paraprofessionals. Tata's James concedes that $35,300 may seem low in today's hot job market. Especially when you're talking about people as highly skilled as the Tata engineers. But by Indian standards, $35,300 is a phenomenal salary, he said. At home, these programmers would make about $2,500 a year. "With the money they save here, they can go back to India and build a house," he said. As James sits surrounded by bare walls in Tata's sparsely furnished office in Rockville, he wonders aloud how the main safeguards in the House bill would affect Tata. The one requiring Tata to attest that it hadn't laid off any American workers would be no problem. Tata doesn't have any American programmers or engineers to lay off. It simply doesn't hire American. But the requirement that companies recruit American workers could spell trouble. All of Tata's recruiting is done in India. Of the 1,500 Tata employees working in the United States, James can think of only one, a vice president, who is American. *** Tata Consultancy isn't the only H-1B user without American engineers. Tata Infotech, its corporate cousin, has about 500 employees in the United States, also under contract with U.S. firms. About 95 percent of them are here on H-1Bs, a company official said. Most of the rest are here on L-1 visas, which are temporary visas for support staff. Another top user of H-1Bs, Mastech Systems of Oakdale, Pa., reports that the overwhelming majority of its engineers and programmers, also on contract to U.S. technology firms, are in the United States on temporary work visas. Mastech was the single-largest H-1B user last year, with 1,689. Rep. Bruce Morrison, a Connecticut Democrat who was chairman of the House immigration subcommittee when the H-1B program was created in 1990 and takes fatherly pride in the program, says the practices of companies like Tata Consultancy, Tata Infotech and Mastech raise questions beyond immigration law -- questions of hiring discrimination. "This isn't an H-1B problem, it's a Title VII problem," he said. *** Sen. Abraham and industry representatives are fond of saying the H-1B program is "totally transparent." Anybody can go to a workplace and see how much an H-1B worker earns. Theoretically, this ensures they're not paid less than other workers, thereby undermining the U.S. wage structure. That may be the law, but it's not how it works. When Qualcomm's Daniel L. Sullivan, senior vice president for human resources, appeared before the House immigration subcommittee to push for an expanded H-1B program, he also said that the program was well-regulated and that the proposed employee protections were unnecessary. San Diego-based Qualcomm has 10,600 employees in the United States. Of those, 572 -- about 5.5 percent of the company's work force -- are on temporary work visas. "Current regulations require Qualcomm and every other business to pay H-1B employees at the same rate we pay nonimmigrant personnel in the same job categories," Sullivan said, adding that he has seen "no evidence that employers are attempting to evade the prevailing wage regulation." Several weeks later, in an office at Qualcomm's headquarters, a company administrator opened an accordion file packed with information on all the company's H-1B employees. Last year, the telecommunications company brought in 122 H-1B workers. For many, the listed prevailing wage was $33,200. The source was the Radford Survey. Steve Radford is head of the Radford Division of Aon Consulting. He has been surveying high-tech compensation practices for 23 years. He said the "effective" prevailing wage range for an entry-level programmer in San Diego is between $38,000 and $45,000. Qualcomm's Bill Bold, who has lobbied in Washington to expand the H-1B program, said Qualcomm pays its foreign professionals more than the prevailing wage listed on the Labor Department forms stuffed into the accordion file. But he wouldn't say how much. He said the company "as a rule" doesn't pay less than $42,000 for entry-level programmers like the ones hired under the H-1B program and often offers a signing bonus and company stock. But he refused to disclose the actual wages of the H-1B workers. Initially, company officials had promised to, but after weeks of delays decided against it. Without knowing the actual wages, it is impossible to determine whether Qualcomm is paying foreign workers the same as its other entry-level programmers, or if the workers are lumped at the bottom of the company's salary ladder. *** Sen. Abraham may have confidence in the way the H-1B program is being run, but the officials who run it don't. Labor Department officials complain that regulations force them to rubber-stamp H-1B applications. They can reject the applications only when they aren't completely filled out and signed, or if the forms contain information that's clearly incorrect. Otherwise, approval comes within seven days. At the INS, spokesman Russ Bergeron said his agency's only role in the H-1B program is to count the number of visas approved and make sure it doesn't exceed the legal limit. Actually, the agency must approve each H-1B visa. But the process is so perfunctory that it's easy to see how Bergeron could overlook it. All the INS has to do is make sure the applicant's occupation qualifies under the program. Although employers must fill out a three-page form for the INS, only a small portion of the information is entered into a database. Most of it remains on the application form, stored in one of four INS service centers nationwide. The agency keeps track of how many visas are approved, but not of how many are actually issued. Nor does it keep track of when temporary workers arrive in the country, when they are supposed to leave, where they will be working, or what they will be doing while they're here. And who makes sure the workers eventually go home? "That's the responsibility of the employers," Bergeron said.