New York Times
By Julia Preston
November 10, 2015
Théo
Négri, a young software engineer from France, had come up with so many
novel ideas at his job at an Internet start-up in San Francisco that the
American entrepreneur
who hired him wanted to keep him on.
So
he helped Mr. Négri apply for a three-year work visa for foreign
professionals with college degrees and specialized skills, mainly in
technology and science. With his
master’s degree from a French university and advanced computer
abilities, Mr. Négri seemed to fit the bill.
But
his application for the H-1B visa was denied, and he had to leave the
United States. Back in France, Mr. Négri used his data skills to figure
out why.
The
answer was simple: Many of the visas are given out through a lottery,
and a small number of giant global outsourcing companies had flooded the
system with applications,
significantly increasing their chances of success. While he had one
application in last year’s lottery and lost, one of the outsourcing
companies applied for at least 14,000. The companies were squeezing out
American employers like his boss.
“I had this great American dream that got broken,” Mr. Négri said, speaking by telephone from Lyon, France.
Congress
set up the H-1B program to help American companies hire foreigners with
exceptional skills, to fill open jobs and to help their businesses
grow. But the program
has been failing many American employers who cannot get visas for
foreigners with the special skills they need.
Instead,
the outsourcing firms are increasingly dominating the program, federal
records show. In recent years, they have obtained many thousands of the
visas — which are
limited to 85,000 a year — by learning to game the H-1B system without
breaking the rules, researchers and lawyers said.
In
some years, an American employer could snag one of these coveted visas
at almost any time of the year. But recently, with the economy picking
up, the outsourcing companies
have sent in tens of thousands of visa requests right after the
application window opens on April 1. Employers who apply after a week
are out of luck.
“The
H-1B program is critical as a way for employers to fill skill gaps and
for really talented people to come to the United States,” said Ronil
Hira, a professor at Howard
University who studies visa programs. “But the outsourcing companies
are squeezing out legitimate users of the program,” he said. “The H-1Bs
are actually pushing jobs offshore.”
Those
firms have used the visas to bring their employees, mostly from India,
for large contracts to take over work at American businesses. And as the
share of H-1B visas
obtained by outsourcing firms has grown, more Americans say they are
being put out of work, or are seeing their jobs moved overseas.
Small
companies like BuildZoom, a start-up in San Francisco that helps people
find construction contractors, are unable to compete for H-1B visas
with large outsourcing
companies that flood the system with requests. Credit Jason Henry for
The New York Times
Of
the 20 companies that received the most H-1B visas in 2014, 13 were
global outsourcing operations, according to an analysis of federal
records by Professor Hira. The
top 20 companies took nearly 40 percent of the visas available — about
32,000 — while more than 10,000 other employers received far fewer visas
each. And about half of the applications in 2014 were rejected entirely
because the quota had been met.
Two
of those applications came from Mark Merkelbach and his small
engineering firm in Seattle. For water projects in China, he needed
engineers and landscapers who speak
Mandarin, a combination of skills he could not find in the local
market. With his H-1B visas denied, Mr. Merkelbach had to move the jobs
to Taiwan. Another denial went to Atulya Pandey, an entrepreneur from
Nepal who founded an Internet company in the United
States and now can no longer work legally in this country for his own
business.
The
top companies receiving H-1B visas in recent years, Professor Hira
found, include Tata Consultancy Services, known as TCS, Infosys and
Wipro, all outsourcing giants
based in India; Cognizant, with headquarters in New Jersey; and
Accenture, a global operation incorporated in Ireland.
“They
have spent a lot of time and money creating a business model that fits
within the rules so they can use the visas to offer cheaper labor,” said
Bruce Morrison, a
lawyer representing an association of American engineers.
For
example, federal law requires global companies employing large numbers
of H-1B workers to sign a declaration saying they will not displace
Americans. But there is
a loophole: An exemption in the fine print cancels that requirement if
employers pay H-1B workers at least $60,000 a year — significantly less
than an experienced technology worker’s salary in many parts of the
United States.
Many
of the outsourcing firms’ temporary workers earn $60,000 or just a
little more, according to federal data compiled by Professor Hira.
How the H-1B Visa System Can Hurt American Workers
Congress
set up the H-1B visa program to help American companies hire foreigners
with specialized skills. But in recent years, many H-1B visas have gone
to temporary immigrants
who lacked special skills and displaced American workers from jobs.
Among
the immigration visas offered by the United States, the H-1B program
stands out for its peculiar rules. The annual quota includes 65,000
visas for foreign workers
applying for the first time, while the remaining 20,000 are for foreign
students graduating with advanced degrees from American universities.
Each year the period for applications opens on April 1, and they are
accepted first come first served.
Federal
officials allow only one application for each foreign worker. But there
is no limit on the number of visas a single company can seek. A company
with thousands
of employees can submit many applications. By law, if applications
quickly exceed the quota, officials turn to a computer-run lottery to
select the visa recipients.
Recently,
demand for the visas has soared; each year since 2013 the selection
went to the lottery. This year, 233,000 applications were received in
just seven days, and
about two-thirds were denied because the quota was already met.
Immigration
officials do not acknowledge the outsourcing companies’ advantage. “The
selection process is completely random,” said Shinichi Inouye, a
spokesman for United
States Citizenship and Immigration Services, the federal agency in
charge of the visa program. “We cannot speculate as to why one company
has more petitions selected in the cap.”
But
Mr. Négri, who is now 27, wanted to understand it. He had been hired by
David Petersen through an open job search after he posted his
professional profile online.
Mr. Petersen was looking for engineers to expand his start-up,
BuildZoom, which helps people find construction contractors.
“I
was just looking for great people,” said Mr. Petersen, in San
Francisco. “And Théo had been building cool stuff since he was a
13-year-old.” Mr. Petersen said he hired
several other local tech workers at the same time, and Mr. Négri,
rather than displacing Americans, later brought in more.
Then
his visa was denied. So Mr. Négri combed through public documents that
employers file with the Department of Labor as a first step in an H-1B
application. For the
limited quota of visas, Mr. Négri discovered, the outsourcing companies
had submitted far more applications than a small company like BuildZoom
could manage or afford — each application costs up to $4,000.
Together
the top five outsourcing companies had prepared as many as 55,000 H-1B
applications. TCS, the company that had prepared applications for at
least 14,000 visas,
won 5,650 of them.
Mr. Négri is now working on a tech start-up of his own — in France.
American
titans like IBM, Microsoft, Facebook and Google also use H-1B visas and
have pressed Congress to increase the annual quota.
A
representative of The New York Times Company said it had about 70
employees on visas, most of them skilled technology workers. This year,
the company obtained an H-1B visa for Mark Thompson, the president and chief executive, who is
British.
Lawmakers
have largely overlooked the outsourcing companies’ role in the visa
process. On Sept. 30, Congress allowed an extra fee of $2,000, which it
imposed five years
ago on H-1B applications from the biggest outsourcing companies, to
lapse.
(Atulya
Pandey, right, an entrepreneur from Nepal who founded an Internet
company, Pagevamp, in the United States with Vincent Sanchez-Gomez,
left, in New York in September.
Mr. Pandey, who was denied an H-1B visa, had to set up shop back in
Nepal to try to manage the growing company, which is based in New York.
Credit Richard Perry/The New York Times)
Most
of the global firms focus on technology, offering services to American
companies to upgrade their systems and help them compete amid rapid
change in the international
marketplace.
The
global companies say they are following all of the rules when they
apply for the visas. Benjamin Trounson, a spokesman for TCS, one of the
largest consultants, with
325,000 employees worldwide, said the company serves its customers
“using our U.S. and global talent pool that most effectively meets their
needs.”
Several
consulting companies said H-1B workers were only a small part of their
work force in the United States. Cognizant said in a statement that it
regularly recruits
experienced American workers and qualified students, and uses H-1B visas only “to supplement our U.S. hiring in order to fill talent gaps
in the market.”
Still, Cognizant was the second-largest recipient of H-1B visas in 2014, getting more than 4,200.
The
outsourcing companies say they are hiring more Americans and
contributing to the economy. In August, TCS announced a $35 million
donation to Carnegie Mellon University
for a new research center on its campus in Pittsburgh.
But
Mr. Pandey, after losing out in the H-1B lottery, had to set up shop
back in Nepal to try to manage a growing company based in New York.
As
an undergraduate at the University of Pennsylvania, Mr. Pandey
befriended an American classmate from Arizona, Vincent Sanchez-Gomez. By
their junior year, they were
running a start-up. In 2013, after graduating, they turned full time to
their venture, Pagevamp, which helps small businesses create and run
their own websites.
The
H-1B denial was a blow. “It was quite stressful, for me and for the
entire company, because it’s what we were counting on,” Mr. Pandey, 25,
said during a brief stop
in New York last month; now he can come to the United States only on a
visitor’s visa.
Document: Atulya Pandey’s H-1B Visa Is Denied
Mr.
Sanchez-Gomez, 24, has to handle investors, a staff of 10 and the
company’s plans for expansion through video calls with a business
partner halfway around the globe.
“I
would expect most people would feel Atulya was making a positive
contribution to the U.S. economy,” he said. “There is no American who
could do his job. Without Atulya,
there would be no company.”
For more information, go to: www.beverlyhillsimmigrationlaw.com
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