Report: India’s H-1B Companies Ask Labor Department to Let Foreign Workers Stay amid Crash

In this Aug. 19, 2016 photo, young Indian entrepreneurs and freelancers work at Innov8, a
Altaf Qadri/AP Photo
Neil Munro

The India-based NASSCOM business lobby is asking the Department of Labor to help the lobby keep its huge workforce of Indian H-1B temporary workers in American jobs throughout the coronavirus crash, according to a report in the Times of India newspaper.

“Everyone that has been involved in the H1-B program … has skirted the rules to stay in the United States,” said one lobbyist. “These companies do not want to have to fire these [H-1B] workers and send them back home — they want to hold them here” so they can grab jobs in the recovery, he said.

Labor Department officials declined to provide any information about the NASSCOM lobbying and declined to say if the agency would help businesses change the paperwork that allows fired H-1Bs to stay in the United States. The Indian report did not say if the NASSCOM lobbyists met with Labor Secretary Eugene Scalia.

If the administration moves forward in relaxing regulations governing the H-1B program amid spiking unemployment, “get ready for the pitchforks,” said Kevin Lynn, founder of the U.S. Tech Workers group that opposes the H-1B program. “When people have nothing left to lose, they will lose it — and they will direct it at the elites.” He continued:

On March 27, a friend of mine was fired after giving an hour of “knowledge transfer” to her [H-1B] replacement who came from overseas. Now she’s unemployed at a time when ten million other Americans have filed for unemployment. She doesn’t get to participate in the American Dream. Instead of being a member of the middle class, she’s a member of the financially impoverished class. And in America, to be without a job means you’re out of the pecking order, you’re on the low run, and in American today, that could be years, if not decades. The pitchforks are coming out because people are nine meals away from revolution.

The NASSCOM business association asked Labor Secretary Scalia to allow their imported H-1B visa workers to work at home during the coronavirus epidemic, said the Times of India.

The request seems like a minor accommodation in the coronavirus epidemic. But it is political dynamite because any concessions will help the U.S. and Indian companies keep blocs of laid-off H1-B workers in the United States so they can take many good jobs when the nation climbs out of the coronavirus hole.

There is much evidence that President Trump recognizes the sensitivities of this issue. On April 2, his deputies reversed a plan to import more H-2B blue-collar workers in the crisis. The sudden reversal came after an April 1 press conference where Trump dodged two questions about white-collar visa workers.

NASSCOM’s request to change the H-1B process creates extra problems for politicians.

The H-1B is the largest of the many visa programs — OPT, H4EAD, L-1, TN, CPT, E-3, B-1,  — which keep roughly one million Indian contract workers, plus more than 200,000 migrants from China and other countries, in a wide variety of white-collar jobs throughout the United States. Few of the H-1Bs are more skilled than American graduates, and most are rated as “Entry-Level” or “Qualified” workers in the H-1B process.

Roughly 100,000 new H-1B workers arrive each year. These contract workers have to go home after six years unless their U.S. employer nominates them for a green card.

CEOs like to tout payroll savings when they announce H-1B contracts to Wall Street stick-pickers. But the short-term savings are typically wiped out by lower productivity, lower innovation, higher training costs, and massive featherbedding among Indian contractors, say Americans who have helped import H1-B workers. CEOs ignore those long-term costs because they are principally trying to jack up stock values, said one person in an office which tracked the costs of H-1B workers.

But managers and human resources (HR) staff also like to import blocs of H-1Bs because they are too complacent to bother recruiting and managing independent and innovative American professionals, said other U.S. managers and tech workers. NASSCOM’s H-1Bs workers are an easy temptation for the MBAs who prefer to spend more weekend time on their boats, he said.

There are at least four sides to the huge H-1B program, which is used by U.S. CEOs to keep about 900,000 foreign graduates in the jobs needed by the sons and daughters of America’s class of college graduates.

On the first side, major U.S. companies — including the companies’ Indian and Chinese managers — hire many, many H-1B workers. These companies include Microsoft, Google, Intel, Cisco, Facebook, Amazon, Citibank, JPMorgan Chase, Goldman Sachs, and various banks. These elite companies tend to pay their H-1B workers well and to hire the H-1Bs from U.S. universities via the little-known “Occupational Practical Training” program. In fact, many American technology grads say Indian hiring managers prefer to fill their offices with Indians, not Americans.

Secondly, a large number of U.S. firms import H-1Bs to provide services to other companies. These U.S. staffing firms include Ernst & Young, PWC, and Deloitte.

Third, the India-based U.S. and Indian firms in NASSCOM use the H-1B program to operate a vast ecosystem of large, small, and very small staffing companies that keep hundreds of thousands of H-1Bs in gig-worker contract jobs throughout the United States. These NASSCOM H-1Bs are usually used as gig workers to quickly grab and keep large and small software contracts from Fortune 500 companies in the insurance, banking, manufacturing, software, and other sectors. For example, Genpact is part of NASSCOM, but it was created by U.S. investors to bring Indian labor into U.S. workplaces, including Walmart finance centers.

Lastly, many U.S. companies each import small numbers of H-1Bs to avoid hiring young American graduates. These employers include architecture, dental, design, media, therapy, and even fashion firms.

All of these companies get their H-1B workers by first declaring they are needed at particular work sites. The declarations were made in the Labor Condition Application (LCA) documents that are rubber-stamped by the Labor Department under laws that forbid anything more than cursory checks.

So any close review of the LCAs will expose massive fraud by India-based companies, said one former manager at an Indian-run company.

For example, if an American company signs a contract for an Indian company to supply four workers for a three-year project, the Indian company will submit an LCA to the Labor Department declaring that 104 H-1Bs are needed at the American company, he said.

The next year, the company uses the inflated LCA to ask the Department of Homeland Security (DHS) for 100 extra H-1Bs. A few months later, it gets about 40 H-1Bs from DHS. Those 40 H-1Bs are kept in India until the Indian company wins other software management contracts, he said. “They build up their inventory [of H-1Bs], and once the [H-1B] person is in the country, they can move them around the country. They have a mobile workforce that lives in apartments to undercut American companies that have to have an employee from one site to another. ”

This predatory strategy has wrecked the labor market for American software professionals, just as China’s hidden subsidies help Chinese manufacturing companies to push American factory workers out of jobs, he said.

The Indian companies are so contemptuous of the LCA process that they hire Indian workers for $4 an hour to fill masses of fake LCA documents, he added.

But the LCA process is the political foundation of the H-1B program — because it allows the companies and the media to pretend that the government agrees that no Americans are available to take the H-1B jobs.

Despite its importance, the LCA process is very inflexible. “Our H-1B system simply does not contemplate this [mass shutdown] scenario that is happening right now,” immigration lawyer Charles Kuck told Breitbart News.

The LCAs do not give employers the needed flexibility to flip their H-1Bs between working at Fortune 500 offices to their home offices. This means the NASSCOM companies may end up violating their LCAs when their Fortune 500 clients down their offices detailed in the LCAs because of the coronavirus.

“In order to ‘work from home’ a new H-1B would have to be filed with a new employer,” Kuck said. “There is no way around this. AND, if their ‘home’ is not in the same MSA as their H-1B, they would also need a new LCA, and thus a new filing of an amended H-1B if the employee remains with the employer.”

“If an employee works from a home which is within commuting distance of the workplace, then there is no need to file an amendment,” sais a post by Cyrus Mehta, a very pro-migration immigration lawyer. But, he added, “if an employee works from a home which is NOT within commuting distance from the workplace, the employer should obtain a new LCA for that location and file an H-1B amendment,” Mehta said.

The phrase “a new LCA for that location and file an H-1B amendment” means that the NASSCOM companies to file new applications at both the Department of Labor and the Department of Homeland Security.

The Labor Department has suggested it will relax the process.

A March 20 statement by the Labor Department says employers can move their workers home, providing they post a notice in the original workplace within 30 days:

Because OFLC [Office of Foreign Labor Certification at the Labor Department] acknowledges employers affected by the COVID-19 pandemic may experience various service disruptions, the notice will be considered timely when placed as soon as practical and no later than 30 calendar days after the worker begins work at the new work site locations. [Emphasis added]

Employers with an approved LCA may also move H-1B workers to unintended worksite locations outside of the area(s) of intended employment on the LCA using the short-term placement provisions. As required for all short-term placements, the employer’s placement must meet the requirements of 20 CFR 655.735.

But that apparent concession may be far too little for NASSCOM because the 20 CFR 655.735 rule says that the H-1Bs must be fired if they are kept at the alternative address for more than 60 days:

(2) Immediately terminate the placement of any H-1B nonimmigrant(s) who reaches the workday limit in an area of employment. No worker may exceed the workday limit within the one-year period specified in paragraph (d) of this section.

The Labor Department and DHS declined to answer questions from Breitbart News. But a department official provided this answer:

The Wage and Hour Division’s (WHD) enforcement of the labor provisions of the H-visa programs continues, and reflects our commitment to safeguard American jobs, level the playing field for law-abiding employers, and protect guest workers from being paid less than they are legally owed or otherwise working under substandard conditions.  Workers or employers who have questions, or would like to file complaints with the Division should call 1-866-487-9243 or visit https://www.dol.gov/whd/. They will be directed to the nearest WHD office for assistance.

NASSCOM’s lobbyists in Washington, DC, declined to respond to questions from Breitbart News.

The NASSCOM companies face a second big and expensive LCA-related problem — they are not allowed to stop paying their H-1B workers unless those workers have been formally laid-off.

But the NASSCOM companies do not want to lay off their H-1B workers because the law clearly says that laid-off workers must leave the United States in 60 days. If their workers are recognized as laid off, they exit the country and cannot be slotted back into their jobs as the economy recovers. But if those workers are not laid-off, the companies have to continue paying them as the rates stated in the LCA.

“The H-1B are REQUIRED, by law, to be paid there full wages, as listed on the LCA,” Kuck said, adding:

Any reduction in wages, in fact, makes the employer liable for the wage in a wage claim by the H-1B worker with the DOL. For an employer to reduce the wages of an H-1B (convert them to part-time), they have to file a new LCA, AND file an amendment with the USCIS, THEN they can reduce the wages go part-time (this can go very low, although how low, e.g. 2 hours, is unclear).

“An employer is not permitted to bench an H-1B worker for a temporary period due to economic hardships without risking liability for back wages and other draconian sanctions,” said Mehta. “If the employer decides to temporarily suspend employment, bench or furlough the employee, the required wage must still be paid notwithstanding the sudden economic downturn caused by the COVID-19 pandemic.”

Bloomberg Law reported:

“Employers are required to pay H-1B workers the wage offered on the LCA, and that includes having to pay them for any nonproductive periods,” said Marketa Lindt, partner at Sidley Austin LLP’s labor, employment and immigration practice in Chicago. “Obviously we’re in a different environment, but the regulations are the regulations,” said Lindt, who also serves as president of the American Immigration Lawyers Association.

The NASSCOM companies can change their workers’ hour and pay by changing their LCAs, said Mehta. “Converting the employment from full time to part-time employment would be considered a material change as the employer must obtain a new LCA.”

Kuck says DHS can quickly solve the problem:

I think this [coronavirus shutdown] is more of a “we didn’t consider that scenario” kind of thing, rather than anything intentional. The fix is easy. Allow employers to Furlough H-1B workers WITHOUT accruing liability for their wages. Treat them the same as US workers. USCIS COULD issue an emergency reg on that tomorrow.

The third problem for the NASSCOM workforce is that fired H-1Bs must leave the country in 60 days, according to a January 2017 regulation.

The Times of India reported that NASSCOM as the labor department and DHS “for a 90-day grace period for professionals to depart the U.S. following expiration the H-1B [or] L-1 visas.”

NASSCOM’s push for a longer grace period is matched by a public petition for a 180-day grace period. “We request the government to temporarily extend the 60-Day grace period to 180 days and protect the H1B workers under these difficult times. Thank you!,” says the White House petition signed by almost 20,000 people. An Indian H-1B employer created the petition in New Jersey, and it says:

The Covid-19 situation is getting worse with massive lay-offs expected. The economic conditions may have a significant impact on H1B Workers.

Under regulations, H1B workers have a 60-Day grace period of unemployment time during each authorized validity period to stay in the USA legally. They must find new work within 60 days; otherwise, they have to leave the country. Most H1B workers are from India and can not travel home with children who are U.S Citizens as many nations announced an entry ban, including India.

H1B workers cater to the economy at large, mainly supporting the I.T Industry with high tax contributions.

DHS declined to answer questions about the grace period.

But DHS officials are suggesting they may help the NASSCOM firms. A senior DHS official told an Indian reporter March 23:

Honestly, your H-1B telecommuting [working from home] question is a really good question that I have not been asked before, and that’s one I would want to check with USCIS before suggesting anything in any particular direction.  We do — we are supporting, across the department, steps for safer working environments in light of the coronavirus, so I would be expecting to see that extended to the terms and conditions enforced with respect to H-1B visas.  But having not dealt with that specific question before, I’d have to defer to USCIS on that.  But again, it’s the same agency making those decisions as I — my previous question, and for those of you who don’t know, I was the [position] of USCIS before I took on the role of the acting deputy secretary for Homeland Security.  So I’m very familiar with that work, and I think you can expect to have a very reasonable consideration from USCIS in all of these sort of circumstances that are only caused by the coronavirus. 

The current head of DHS, Chad Wolf, formerly served as a lobbyist for NASSCOM. Under his watch, DHS has continued the process to import another 85,000 H-1B workers into jobs, starting on October 1.

NASSCOM can use other loopholes in the complex immigration law to keep fired workers in the United States. “We have come across a few cases where people have lost their visa status and are advising them to apply for a B-1/B2 tourist visa which gets them six more months in the country legally,” Matthew Maiona, an immigration attorney at Boston-based Maiona Ward, told the Times of India.

The report by the Times of India included quotes from NASSCOM about European governments’ willingness to extend work permits for NASSCOM’s visa workers. “We are requesting for other operational waivers and proposing to the U.K. government to publish a web page including information for Indian nationals in the U.K.,” NASSCOM told the newspaper.

There is growing evidence on message boards, Twitter, and lawyers’ question-and-answer sites that many H-1Bs are being laid off by American and NASSCOM companies, alongside the American graduates who are being fired in the coronavirus crash.

But few or no U.S. companies or NASSCOM companies have announced that they are firing H-1B workers.

Instead, a review of online discussion boards shows many Indians who say they and their friends have been fired individually or in groups as large as 500, that they are being forced to take vacations, or that their 40-hour weeks are being cut to 32-hour weeks. In the Midwest, one major NASSCOM company has summarily fired the H-1Bs provided by its many Indian subcontractors, leaving those workers with no pay for their last three months of work, two sources told Breitbart News.

NASSCOM companies are trying to hide the mass layoffs, said another close observer of the H-1B economy. By hiding the layoffs, they can keep them in the United States to get new contracts and jobs when the recovery arrives, he said. “That’s what they want to do,” he told Breitbart News.

American professionals have organized to lobby against the H-1B program via the American Workers Coalition, U.S. TechWorkers, and ProUSworkers, and White Collar Workers of America.

The new TechsUnite.US site was created to help U.S. graduates anonymously collaborate while shielded by encryption.

In turn, these groups are backed up by a few sites that track the scale and location of the outsourcing industry in each legislator’s district. The sites include SAITJ.org and H1BFacts.com. Other sites document the conflicts created by diverse foreign business practices in the United States. The non-political MyVisaJobs.com site also provides much information about H-1B outsourcing and green card rewards in multiple industries.

Breitbart News has spoken to many Americans who have been sidelined by the H-1B program.

“Fiona” lives in Florida, and she earned two college degrees in the early 2000s after she left the real estate industry following the 2007 collapse. Since then, she has worked a series of contract jobs, most recently at a seven-month stint at an insurance company run by an imported workforce of H-1B workers from India. She said her job ended when she was forced out by Indian managers, in part, because of her excellent performance reviews embarrassed her Indian office peers.

She is in her 50s, has been unemployed for several months, and fears the Indian-dominated recruiting business will blackball her if she speaks on the record.

She told Breitbart News, “I’m not eligible for unemployment. So I have lived off my savings, and I’m living with my son. I’m still applying for jobs, but they’re very few and far between. I can’t relocate again because when they cut my contract job, I had to cut my lease off early, so now, my credit is bad. My lease history is bad. I can’t go and take the risks that I did before. I was getting ready to go and look for a minimum wage job until this coronavirus came here, you know. Come next month, you know what? I can’t pay my bills because I’ve gone for like eight months on my savings.”

She added, “To be honest with you, I have given up on American companies. I have given up on being able to be hired by America because I’m American, and Americans don’t matter. And I’m sorry I’m going to get a little bit emotional here … Americans don’t matter. I hear politicians, you know, saying, ‘Okay, you know what? We’re going to open our borders, and you can have free health …’ I don’t have health insurance. You know, Americans don’t matter. All that matters is foreign workers. All that matters is if the foreign individuals … I mean, it’s like we don’t matter. America doesn’t matter.”

In the 2016 election, Trump tried to win votes from college graduates who have been struck by the H-1B program. In March 2016, after much zig-zagging, Trump declared:

The H-1B program is neither high-skilled nor immigration: these are temporary foreign workers, imported from abroad, for the explicit purpose of substituting for American workers at lower pay. I remain totally committed to eliminating rampant, widespread H-1B abuse and ending outrageous practices such as those that occurred at Disney in Florida when Americans were forced to train their foreign replacements. I will end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers for every visa and immigration program. No exceptions.

Trump has not fulfilled that campaign promise, said Lynn, adding, “We’ll know President Trump is doing his job when someone here on H-1B trains an American on his job after his visa has expired.”

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