Tag Archive for: Job Shops

Cyrus Mehta

WILL THE REVISED USCIS Q&A ON ESTABLSHING THE EMPLOYER-EMPLOYEE RELATIONSHIP IN H-1B PETITIONS SAVE STAFFING COMPANIES?

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By Gary Endelman and Cyrus D. Mehta

Since the issuance of the January 8, 2010 guidance memorandum by Donald Neufeld, concerning the employer-employee relationship in H-1B petitions (Neufeld Memo), especially when an employer places an H-1B worker at a third party client site, workers at IT consulting and staffing companies have been the most adversely impacted.  Indeed, it seems that the Neufeld Memo was designed to kill the staffing company.

The adverse effects of the Neufeld Memo have been felt most keenly by Indian nationals on H-1B visas who make up most of the workforce at such companies.  This legitimate IT business model, which has been readily embraced by US corporations, is associated with a distasteful term in immigration parlance, namely the “job shop,” whose presence has become ubiquitous with Indian beneficiaries of employment visa petitions. The heightened scrutiny, often leading to an arbitrary denial, is exercised even if the USCIS has approved the H-1B petition previously on the exact same facts. Most problematically, H-1B visa applicants face unreasonable and arbitrary treatment at US Consulates in India, and are subject to unnecessary demands for the same documentation even after they were submitted to the USCIS, resulting in denials or recommendations for revocation of their petitions. Most Indian H-1B visa holders are fearful of travelling to India presently out of fear that they will be denied a visa based on an approved petition.   CBP at ports of entry has also exercised this subjective scrutiny over Indian H-1B entrants in the IT consulting field at ports of entry.

On March 12, 2012, the USCIS issued a revised Q&A on the Neufeld Memo containing helpful language under Questions 5 and Question 13, which did not exist in the prior guidance dated August 2, 2011.

Q5: Am I required to submit a letter or other documentation from the end-client that identifies the beneficiary to demonstrate that a valid employer-employee relationship will exist between the petitioner and beneficiary if the beneficiary will perform services at an end-client/third-party location?

A5: No. While documents from the end-client may help USCIS determine whether a valid employer-employee relationship will exist, this type of documentation is not required. You may submit a combination of any documents to establish, by a preponderance of the evidence, that the required relationship will exist. The types of evidence listed in the memorandum are not exhaustive. Adjudicators will review and weigh all the evidence submitted to determine whether you have met your burden in establishing that a qualifying employer-employee relationship will exist.

Q13:  The memorandum provides an example of when a computer consulting company had not established a valid employer-employee relationship. Are there any situations in which a consulting company or a staffing company would be able to establish a valid employer-employee relationship?

A13:  Yes. A consulting company or staffing company may be able to establish that a valid employer-employee relationship will exist, including where the beneficiary will be working at a third-party worksite, if the petitioning consulting or staffing company can demonstrate by a preponderance of the evidence that it has the right to control the work of the beneficiary. Relevant factors include, but are not limited to, whether the petitioner will pay the beneficiary’s salary; whether the petitioner will determine the beneficiary’s location and relocation assignments (i.e. where the beneficiary is to report to work); and whether the petitioner will perform supervisory duties such as conducting performance reviews, training, and counseling for the beneficiary. The memorandum provides a non-exhaustive list of types of evidence that could demonstrate an employer-employee relationship.

It is heartening to know that the failure to submit direct document from the end client will not be fatal. It is often times very difficult to obtain such a letter from the end client, especially when there are multi-vendor arrangements between the end client and the H-1B petitioner. Moreover, the end client may not want to be involved in any way in the visa petitioning process, without realizing that its reluctance to submit a letter can result in a denial of the H-1B petition and deprive it of a crucial worker for its project. The revised Q & A states that the petitioner “may submit a combination of any documents to establish, by a preponderance of the evidence, that the required [employer-employee] relationship will exist.” It is hoped that USCIS will not willfully ignore this guidance. Also, consuls should note that the absence of direct documentation from the end client should not cause them to refuse the H-1B visa, and recommend to the USCIS that the H-1B petition be revoked.

Also welcome is the absence of the pejorative term “job shop” in the answer to Question 13, and the fact that the Q&A states that a consulting or staffing company can still demonstrate through the preponderance of the evidence that it has the right to control the work of the beneficiary, even though he or she may be at a third party client site. It also provides helpful tips on how the consulting or staffing firm can demonstrate a right of control through conducting performance reviews, training and counseling for the beneficiary. While the USCIS would doubtless prefer the daily assertion of actual control by the H-1B petitioner even though it has professed that the H-1B employer only exercise the right of control, it is encouraging to note that this latest guidance does indeed provide concrete examples that are truly indicative of “the right to control.” It would appear that, so long as the indicia of ultimate supervision are present, the absence of day-to-day review will not be fatal.  Such flexibility will not only restore a utilitarian suppleness to the H-1B but to other non-immigrant visa categories, notably the off-site L-1B intra-company transferee, where artificial notions of rigid control have also proved consistently at variance with contemporary business practice.

Beyond that, while the H-1B petitioner must always retain primary control, Neufeld redux does not demand total or exclusive control. This could mean, for example, that input from end users as part of performance reviews would not only be tolerated but sanctioned.  While the selection of locations and assignments remain the province of the H-1B petitioner, as they should, there is no reason why daily on-the-job consultations with end user management cannot take place consistent with retention of H-1B status. A distinction between first and last decisions as compared to every day tactical adjustments is good news for an economy still struggling to get back on its feet. Though this may not have been their intent, the drafters of this update have brought the Neufeld memorandum closer to what Judge Kessler had in mind when she dismissed the Broadgate complaint:

To summarize, the Court concludes the Memorandum establishes interpretive guidelines for the implementation of the Regulation, and does not bind USCIS adjudicators in their determinations of Plaintiffs’ H-1B visa applications

This latest guidance represents an unspoken but nonetheless enlightened attempt to align the Neufeld Memorandum with the way America works. If followed, it can help save H-1B petition requests from impending doom. The only remaining issue is whether this revised Q&A will be seriously followed by the USCIS officers, and in turn, by the US Consulates. Regardless,  an H-1B petitioner whose business model involves placing H-1B workers at third party client sites should actively rely on this revised Q&A when filing H-1B petitions or when responding to requests for evidence to assert its right of control over the beneficiary.

There is a larger reason why those of us who have so strenuously attacked the Neufeld Memorandum should welcome this revision. The absence of guidance is the lawyer’s worst nightmare. Without knowing how the game is played, the lawyer does not know when to advance or when to retreat. He or she is prone to putting in too much or not enough, placing undue emphasis on what is tangential while glossing over the truly essential. Some cases take an excessive amount of time to prepare while others are filed prematurely. Law becomes a high stakes poker game, justice by ambush. The USCIS adjudicator is also at sea. Uncertain what standards to employ, frustrated by  nagging suspicion that agile advocacy by an unscrupulous bar will win benefits for clients who do not deserve them, the line analyst at the Vermont or California Service Center faced with a subtle H-1B fact pattern looks in vain to Washington for clarity that does not come. The process becomes complex, complicated and expensive. Conflict replaces cooperation leading to litigation and micromanagement. There seems no exit. When nothing is certain, almost anything can happen.

That is where the Neufeld Memorandum and the August 2011 guidance left us (although the earlier guidance consistent with DHS’s policy to welcome entrepreneurs clarified how an owner of a company could get an H-1B visa). Not really knowing how the USCIS would interpret the third party placement of an H-1B temporary worker, we were left with a Hobson’s choice between bedlam and litigation. The only thing that was certain was the absence of certainty itself. That is why this most recent Neufeld Q&A is so welcome for it has within it the potential to restore clarity and stability to a singularly important question of law in the increasingly contentious H-1B debate at a time when both qualities were singularly lacking. Rhetoric is not reality, however, and the possibility that skeptical USCIS adjudicators will simply ignore this most recent guidance remains a disturbing possibility. We all know from bitter experience the gap between promise and performance. Good intentions in Washington DC can be frustrated quite well by sustained resistance in the trenches. If the wisdom of good men and women will prevail, this will not happen. Hopefully, the deliberate deployment and informed application of this newly minted wisdom will turn the Neufeld Memo from a symbol of intransigence into a  tool for nuanced adjudication. That will deserve the genuine approbation of all those who doubtless will wonder why the USCIS did not think of this earlier.

(The views expressed by guest author, Gary Endelman, are his and not of his firm, FosterQuan LLP)

Cyrus Mehta

THE WORLD ACCORDING TO SENATOR SCHUMER: IF IT’S NOT A CHOP SHOP, IT’S A BODY SHOP

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By Gary Endelman and Cyrus D. Mehta

Dear Senator Schumer:

We know that you and your colleagues with great aplomb approved a border security bill, H.R. 6080, that would provide $600 million in funding for putting $1,500 border security to prevent illegal immigration, which will be paid for by raising fees on certain H-1B and L-1 visa petitions. The hike in fees, $2,000 for an H-1B and $2,500 for an L-1, will be paid by a company that has 50 or more employees if more than 50% of these employees are admitted in H-1B or L status. Most of the companies that will face these punitive hikes will be Indian IT companies. The President signed the bill on August 13, 2010. What Indian IT consultants have to do with border security remains a genuine head scratcher. In a letter to U.S. Trade Representative Ron Kirk, India’s Commerce Minister Anand Sharma said the bill unfairly targets Indian companies and estimated it would cost the country’s firms an extra $200 million a year. “It is inexplicable to our companies to bear the cost of such a highly discriminatory law,” Sharma wrote. Perhaps the fact that these same companies subsidize US social security solvency to the tune of $1 billion per annum without any benefit flowing the other way might also raise hackles in Bangalore. http://www.indiapost.com/india/8922-India-protests-bill-raise-H1B-visa-fees.html

India bashing is a potent political strategy these days as you probably know. In the recent contest over the Democratic Party’s nomination for the Arkansas Senate seat held by your colleague Blanche Lincoln, business lobbyists funded controversial television ads attacking her challenger, Lieutenant Governor Bill Halter, for allegedly profiting from a software company that supposedly outsourced American jobs to India. (Halter denied the charge.) What did Senator Lincoln do? Take a listen:” With Indian music playing in the background, one of the ads featured several Indians thanking Mr. Halter for sending jobs to Bangalore. Although Ms. Lincoln condemned the ads as racially offensive, her campaign distributed mailers, emblazoned with pictures of the Taj Mahal, making the same charge.”http://india.foreignpolicyblogs.com/tag/indo-us-relations/ . Of course, this will not prevent President Obama from visiting India this coming November to highlight its importance to the United States. Will there be room for you on Air Force One?

Hopefully, Senator, the Indian Government will not retaliate against your visa fee hike in advance of the President’s arrival. Consider for a mement a warning by Azim Premji, the executive chairman of Wipro, one of the companies you singled out in your bill:

“I think the United States must realize that today 60 to 70% of the growth of the revenues of large American companies comes from India and China. These are the growth markets. It’s a simple thing for our government to raise tariffs. It’s a simple thing for our government to say no American corporation will get central or state government contracts, or defense contracts. On the other axis, we’re so open to global corporations to bid on exactly the same terms as Indian corporations. You’ll get a spate of protectionism coming, I have no doubt. You can see it in China, but they do it very subtly. Nearly 55% of the economy of China is government.”

http://www.businessweek.com/globalbiz/blog/globespotting/archives/2009/05/wipros_premji_o.html

Senator, your 50/50 rule, which is modeled after what Senators Durbin and Grassley have long advocated, https://blog.cyrusmehta.com/News.aspx?SubIdx=ocyrus20099111575, could trigger a formal complaint by the Indian Government to the World Trade Organization on the grounds that the United States is failing to abide by its obligations under Mode 4 of the General Agreement on Trade in Services (GATS) that regulates services provided by “one Member through the presence of natural persons of a Member in the territory of any other member.” GATS Training Module: Chapter 1: Basic Purpose and Concepts, WTO Web site available at http://www.wto.org/english/docs_e/legal_e/06-gatt.pdf_e.htm. A recent study by the National Foundation for American Policy did not dismiss this possibility but expressed genuine concern that the United States would be deemed guilty of a restrictive trade practice, thus leaving us with the Hobson’s choice of revising our immigration laws or risking WTO discipline, not to mention a severe Indian response. http://www.nfap.com/pdf/GATSLegalAnalysis_NFAPPolicyStudy_June2010.pdf
We all make our living in a global village, Senator, and your fee hike is a boomerang that is going to come back around to hurt the very workers you want to protect. That is why business leaders are muttering in their martinis. US India Business Council President Rom Somers speaks for many:

“It is totally outrageous in this day in age, when the world is so interconnected by the Internet, that draconian measures would be floated by the US Congress that tarbrushes Indian companies as ‘chop shops’…Our companies are creating value around the clock thanks to tie-ups with India, keeping us ahead of the global competition…Cutting our nose off to spite our face by imposing restrictions on movement of high-tech professionals will hobble American companies’ ability to compete in the global marketplace,” he said….Value addition is being provided by Indian companies 12 hours a day, 7 days a week for US companies, complimenting the value being generated by the American work force. When our day winds down and our workforce shuts the lights off, the Indian workforce awakes for their morning to continue adding value,” Somers added.”

http://www.deccanherald.com/content/87773/us-industry-outraged-senators-chop.html.

You might be interested to read a 2008 report from the US India Business Council concerning Indian investment in the United States. Covering 12 states, Indian corporate titans handed out paychecks to 30,000 Americans; the Tata Group, by itself, operated 16 businesses with 19,000 workers and an estimated total investment of $3 billion. http://www.expressindia.com/latest-news/Indian-firms-employ-over-30k-US-citizens-Study/332089/.

Senator Schumer, we are not sure whether you read our blog that we posted the night before you approved HR 6080 in the Senate on August 12, 2010, http://cyrusmehta.blogspot.com/2010/08/silence-in-time-of-torment-throwing.html, where we reminded you that the use of pejoratives such as “chop shop,” or even “job shop” with regard to Indian’s crown jewel IT company, Infosys, were racist terms, which have been legitimized in public discourse much as racist terms found acceptance in the Jim Crow era. You clarified the next morning, August 12, 2010, that the use of “chop shop” was not appropriate, but then indicated that the more appropriate term ought to have been “body shop,” which continues to rub salt in the wound and demonstrates an ignorance of the very real value that firms like Infosys, Wipro, Tata and other smaller companies with similar business models bring to American business. In your August 12 speech, you referred to the so called “good” H-1B folks at Oracle, Cisco and Apple who create products and technologies. But IT development is not just about making products such as iPhones or iPads. The same skills and ingenuity are used in efficiently providing IT services to major American businesses that run the economy. You later said, “If you are using the H-1B visa to run a glorified international temp agency for tech workers in contravention of the spirit of the program, I and my colleagues believe that you should have to pay a higher fee to ensure that American workers aren’t losing their jobs because of unintended uses of the visa program.” But Infosys and similar companies are not temp agencies and have ingeniously taken advantage of a global around the clock business cycle. They have been made possible by high speed internet, and the concept of software as a service is a unique Internet driven strategy. Moreover, they have efficiently provided these services to American businesses in a time of rapidly aging populations in the United States and Europe, which will result in a significant shortage of IT workers in the near future, http://www.visalaw.com/00feb2/11feb200.html.

As Angelo Paparelli astutely noted in his latest blog, “Temp agencies, whether domestic or foreign, supply temporary workers to fill short-term needs, sometimes at lower costs. Global sourcing enterprises use a legitimate business model that significantly benefits governments, businesses, citizens and customers by offering better quality, 24/7 service across time zones, and speedier start-up and delivery, while allowing customers to focus on core competencies. Global service providers are not ‘glorified international temp agenc[ies].’ They are no less vital to American businesses than are the hundreds of private contractors who serve the federal government, including the Departments of Justice and Homeland Security. Regrettably, the border-law’s definition of businesses that must pay the ramped-up H-1B and L-1 filing fees is not carefully tailored to reach only temp agencies engaged in body-shop activities. It unjustly imposes a protectionist tax on legitimate multinationals in the global sourcing industry,” http://ping.fm/hl1sO.

Senator Schumer, you focus only on the alleged exploitative aspects of the “job shop” business mode, but ignore completely the extent to which American companies are partnering with these Indian IT giants to create new business models that will transform the way services are provided to consumers on the most important issues facing them in their daily lives. Here is a great example, http://www.moneycontrol.com/news/business/satyamcisco-announce-collaboration-for-health-solutions-_311005.html. We know that you are too busy to find out much about the business model that these Indian companies use so perhaps we can do some of your research. These “glorified international temp; agencies” actually are some of the best run companies in the world . They are pioneers in workforce development and much of their mushrooming growth is not based upon smoke and mirrors but rather upon a holistic engagement with employees, treating them not as a cost to be controlled but a capital asset to be developed. During your upcoming recess, we recommend that you crack open a terrific book on this very subject called The India Way by Peter Capelli, Harbir Singh, Jitendra Singh and Michael Useem. http://hbr.org/product/india-way-how-india-s-top-business-leaders-are-rev/an/12037-HBK-ENG It’s a real page turner! Just take a look at one of the malefactors you mention in your speech, Infosys. In 2002, they had 10,700 employees and total revenues of $545 million. Seven years later, they employed 104,900 with gross revenues of $4.6 billion. Since the H quota has been set at the artificially low level of 65,000 during this time, maybe they were doing something else right?

While we applaud and admire your commitment to Comprehensive Immigration Reform, and realize that you had to pass the border bill to show Republicans that you did something to control the border in order to get some bipartisan support, and we do hope your trust in them was not misplaced, we think it is a fatal mistake not to challenge you on this point and concede that the business model used by Infosys and others is bad for America. This is what The Economist has to say, “What’s also funny about all this chest-thumping service-sector protectionism is that it comes from the world’s leading exporter of commercial services, who you’d think would understand the need for open markets in an industry where it is the world’s biggest player. In 2008, the last year for which the WTO has comprehensive worldwide data, America’s exports of commercial services were around 5 times India’s (and about 28% of its total exports). And while latecomers like India have been playing catch-up, America’s service-sector exports have not exactly done badly: they more than doubled in value between 1999 and 2008, when the US had a big surplus in its commercial-services trade.” http://www.economist.com/blogs/freeexchange/2010/08/trade_1. A great point. If all countries were to adopt your approach, guess who would be the big loser, Senator Schumer?

The wellsprings of American prosperity Senator are watered not by keeping talent out but by inviting talent in so that invention is encouraged, ideas are shared, and new technology developed . That Senator is what gives America its edge in the information age and keeps us a step ahead of our competitors. Why give that up? You are 100% right to worry that not enough American kids are studying computers on campus; as a result largely of the dot.com bust, the Computer Research Association that tracks these things reports that, at its nadir, the number of computer science majors undergraduate degrees at 170 institutions shrank to 8,021 in the 2006-2007 academic year. But, cheer up Senator! Since then, assisted by the advancement of computer research into emerging fields, enrollments have soared by 14%. http://www.computerworld.com/s/article/print/9180646/Senator_Schumer_H_1B_use_und

And here’s an interesting piece in Fortune Magazine, “It would be easy to imagine Reno, Ohio, as the type of place that would be hit hardest by outsourcing – a small American town losing out to the invisible hand shifting jobs to places like Bangalore and Guangzhou. Instead, outsourcing is bringing the jobs to Reno. Across the street from an Army Reserve center and next to a farm, a customer-service call center hums, its 250 workers answering phones for online travel agency Expedia. The center’s owner? Indian conglomerate Tata Group.” http://money.cnn.com/magazines/fortune/fortune_archive/2007/08/06/100141303/index.htm?postversion=2007080305. Senator Schumer, do you really oppose this?

Finally, while you admirably corrected the record by indicating that the Indian firms that you mischaracterized as “chop shops” were not engaged in illegal behavior, you still seemed to imply that the so called staffing agencies were responsible for reducing wages and cite to a flawed and biased study of the Economic Policy Institute, http://www.epi.org/analysis_and_opinion/entry/enforcement_needed_in_h-1b_visa_laws/. This study fails to take into account that employers must pay wages in accordance with DOL recognized prevailing wage surveys. If H-1B workers constitute a miniscule fraction of the employed population of the US, and wage surveys must take into account a broad cross section of employers, how can H-1B workers depress wages? Moreover, H-1B dependent employers, in order to escape the more onerous attestations, pay H-1B workers $60,000 or more, even if they may be entry level programmer analysts working in Minot, North Dakota! Perhaps, you could have looked around and referred to a recent peer reviewed study by Professors Lucas and Mithas of the University of Maryland School of Business by Professors Lucas and Mithas of the University of Maryland’s Business School, which demonstrates quite the opposite. H-1B and L visa workers in the IT Industry were paid 6.9% more than their American counterparts, and green card holders took home more than 12.9% than their American counterparts. This study confirms what we immigration lawyers have always known – that US employers seek out workers on H-1B and L visas because they are really good and not because they can get away by paying them cheaply. We also know that employers are not going to go through the hoops and hurdles of filing an H-1B or L visa petition, pay filing and attorney fees, take pains to comply with all of the complex regulatory requirements (including paying the prevailing wage for H-1B workers and those being sponsored for green cards through labor certification), and respond to burdensome requests for evidence, unless they believed in the worth of this foreign worker, http://cyrusmehta.blogspot.com/2010/05/study-shows-that-h-1b-and-l-1-workers.html.

Over the long haul, India is more than a promising market for Silicon Valley, it is a strategic alternative. Just as economic prosperity in the 20th century required investment and raw materials, competitive dominance in the information age of the new millennium will depend, in no small measure, on who can prevail in the global hunt for the best technological talent. Those who want to protect US jobs by closing down the Indian pipeline are having precisely the opposite effect. By making it more difficult to work and remain in the United States, such policies will either enable the Indian IT industrial complex to reach critical mass much earlier than would have otherwise been the case or give our chief competitors in Europe, Japan and China a badly needed infusion of talent. Beyond this, there is a deeper point, namely this: India is on the rise. The question is not whether this development will take place but, rather, whether, when it does, the relationship with the United States will be characterizaned by partnership or competition. Senator Schumer, your brand of immigration protectionism will not prevent Bangalore from developing into a strategic alternative to Silicon Valley but it most certainly will destroy any chance for the kind of entrepreneurial amity and technological cross-fertilization that will allow America to reap the benefits of this Indian renaissance. Beyond that, IT wages in India will either fall or slowly rise since the supply of qualified workers will grow. This means, in turn, the US companies, under enormous cost pressures, will be unable to resist the obvious solution of sending IT jobs to India or simply establishing Indian subsidiary operations in the first place. Wages are transnational, not domestic, and what is a prevailing wage cannot be defined in only, or even primarily, a domestic context and make sense since the economic systems in which people work are increasingly global without much interest in, or respect for, national boundaries. Skill not geography counts. Immigration is an economic force not a political problem and must be dealt with as any other economic issue. In the long run, American jobs will hemorrhage if wages are kept artificially high when world markets offer attractive alternatives at high quality but much lower cost. If you think this serves US national interest, ask the thousands upon thousands of steel workers in Ohio and Pennsylvania whose jobs are now being done in Korea. The American economic miracle depends not on cheap labor but on productive labor capable of creating jobs in industries that have yet to be invented.

If you think that it is cheap for Indian workers to come here, Senator, how much cheaper would it be for them to stay at home and have US jobs come to them? We are, it seems, no longer the only game in town.Your bill will only serve to accelerate this change in the Indian IT business model so that, rather than coming to the customers, India’s IT giants will have the customers come to them. Infosys Technologies, the second largest software exporter in India with over 66 per cent of its revenues coming from North America , has already begun to plan for this transition. Kris Gopalakrishnan, CEO and ME of Infosys Technologies, predicts that, over time, as more US technology companies establish a presence in India, Infosys will be able to service them while cutting back on H-1B sponsorship.http://www.domain-b.com/infotech/itnews/20100814_models_oneView.html . You will have made the H visa irrelevant Senator but the jobs at issue will also have gone away, not just the H1B jobs but those of the American workers that are inextricably linked with them. Your bill forces India to respond for their failure to do so will only serve as a green light to the rest of their Western customer base to follow your example. That is the real fear. http://economictimes.indiatimes.com/articleshow/6285448.cms An expression of this anxiety over the future was immediately played out on the Mumbai stock exchange where shares of Infosys Technologies Ltd., Tata Consultancy Services Ltd. and Wipro Ltd. declined across the board. Tata Consultancy, the country’s largest IT concern fell l 1.7 percent; Infosys, the second-biggest dropped 1.6 percent and Wipro slid 2.1 percent on the Bombay Stock Exchange, compared with a 0.4 percent loss in the benchmark Sensitive Index. http://www.businessweek.com/news/2010-08-10/india-expresses-concern-on-discriminatory-u-s-bill.html. Change that was inevitable will now come more suddenly and with greater force. The thousands of Americans working in India will almost certainly be the collateral damage swept up by the coming Indian response.

Senator Schumer, we know that you have good motives because you desire Comprehensive Immigration Reform and pushed the border bill to eliminate any excuses that nothing was being done at the border first. I think you will find lots of people who are inherently anti-immigrant. They will continue to ask for more enforcement and will never agree on a CIR measure. I hope we are wrong, and that you did not give away a previous bargaining chip prior to passing a CIR proposal, and have it paid from a group of employers who have nothing to do with illegal immigration at the Mexican border.

Thank you for hearing us out, Senator Schumer. In case you are stuck and cannot get CIR passed, and see more jobs moving outside the US because of the hike in fees and other protectionist proposals, please do not hesitate to call upon us and we will be glad to write another letter of advice.

Cyrus Mehta

SILENCE IN A TIME OF TORMENT: THROWING INDIAN IT FIRMS UNDER THE BUS

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By Gary Endelman and Cyrus D. Mehta

A Border Security bill, H.R. 6080, which was passed by the House on August 10, 2010, proposes to add 1,500 more border officers on the US-Mexico border. It proposes to pay for their salaries and other support systems by substantially raising the filing fees of H-1B and L petitions filed by companies that employ 50 or more employees if more than 50% of these employees are admitted on H-1B or L visas. H.R. 6080 is identical to S. 3721 passed in the Senate on August 5, 2010. When discussing the bill, Senator Schumer, who initiated the fee increase, indicated that the burden of the increased fees – $2,000 more for each H-1B and $2,500 more for each L – would fall on Indian IT companies and likened the largest Indian IT giant, Infosys, to a “chop shop,” http://blogs.wsj.com/indiarealtime/2010/08/06/us-senator-infosys-is-a-chop-shop/. It is unclear whether the Senator meant that Infosys was like one of those shady places where stolen cars parts are surreptitiously dismantled and sold, or whether it was a slip of the tongue and he actually meant “job shop.” Since a revenue generating measure must first be initiated in the House and S. 3721 is technically infirm, H.R. 6080 will again be sent to the Senate tomorrow for a vote

We ask that the Senate seriously consider removing the increased fee provision for a number of reasons. The very use of the pejorative term, be it “chop shop” or “job shop,” which has been legitimized in public discourse much as racist terms found acceptance in the Jim Crow era ignores the very real value that firms like Infosys, Wipro and Tata bring to American business. They lower costs, find top drawer talent and keep US competitiveness at a high level. That is why all major US corporations, and many governmental entities, use them and why not using them would make business more expensive and less able to maintain leading positions on the world economic stage. The use of this term reflects something more profoundly disquieting, a cultural insularity that is unworthy of a great power, a state of mind that insults the very nations whose good will we claim to be courting.

Our elected representatives ought to also consider that Infosys employs 1,300 citizens and permanent residents in the US and has been working towards hiring over 1,000 additional people over the past few quarters, http://www.financialexpress.com/news/chop-shop-reference-is-distressing-says-infosys/658222/. Also take note that 372 acquisitions worth $21 billion and 127 Greenfield investments worth $5.5 billion by Indian companies has created nearly 60,000 jobs between 2004 and 2009, a report said on August 10, http://www.india-us.org/?page=Publications. Also worth noting is an extract from the remarks Secretary of State Hilary Clinton delivered at a US-India CEO Summit on June 22, 2010 in Washington DC, http://www.state.gov/secretary/rm/2010/06/143535.htm

“As both President Obama and Prime Minister Singh have said numerous times in the last 16 months, the increased cooperation between the United States and India is the cornerstone of our 21st century strategic partnership. The President and the prime minister reinvigorated this forum last year based on the idea that Washington and Delhi need to catch up to the business and innovation cooperation that is already happening in New York and Mumbai. In the latest example of the growing links between our countries and our economies, just last week Congressman Jim McDermott unveiled a report by the India-U.S. World Affairs Institute showing that Indian investment in the U.S. grew by an estimated 60 percent in 2009, to over $7 billion. That same report indicated that trade in goods between our countries tripled between 2004 and 2008, and that since 2004 Indian acquisitions in the United States have supported approximately 40,000 jobs here in our country, with manufacturing exports to India linked to another 96,000 jobs. That’s great progress and it’s a solid base on which to build.”

Immigrant rights advocates are legitimately opposed to the bill as putting a few more troops on the border does nothing to solve our immigration problems and distracts from the main objective, which is to repair a broken immigration system through Comprehensive Immigration Reform. But advocates have also remained strangely silent about the penalties on India-based employers in this bill, and we wonder whether it reflects a tendency to throw Indian IT firms under the bus. Is it that by providing more disincentives to Indian firms, there will be less usage of H-1B numbers so others can enjoy them, along with the impact that the January 8, 2010 Neufeld Memo and the intensely prejudicial scrutiny of Senator Grassley has had on IT firms? http://cyrusmehta.blogspot.com/2010/01/new-uscis-memo-on-employer-employee.html This is all too reminiscent of the division within the pro-immigration community in 1996 when business groups remained moot on the sidelines while Congress shredded due process protections for the undocumented in the vain hope that they would somehow escape the whirlwind. Although the more onerous H-1B dependent employer provisions in the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) were targeted towards Indian companies, on February 17, 2009, these additional attestations have also been imposed on employers who received funds through the Troubled Asset Relief Program or under section 13 of the Federal Reserve Act, through the Employ American Worker Act (EAWA). There has clearly been an unspoken but transparently real anti-Indian animus that can be seen in much of US immigration policy. The impact of the priority date system shows it as we have demonstrated in The Tyranny of Priority Dates, http://drop.io/EndelmanMehtaTyrannyofPriorityDates/m. The refusal to accept 3 year Indian university degrees, regardless of how prestigious the institution is, shows it. We need to denounce this bias for what it is, and also because these biases generally come back to haunt all other immigration groups.

Will the bill actually be able to pay for itself through the increased fees or will it increase the government’s debt? H-1B usage by the top Indian IT firms has been down in 2009, http://www.hindustantimes.com/world-news/americas/US-visa-curbs-aren-t-scaring-India-Inc/Article1-584874.aspx. As our esteemed colleague Angelo Paparelli has noted in his recent blog, no analysis has been undertaken as to how much revenues can be generated through increased fees from these companies, and it also likely that more jobs will move overseas “because America is obviously and increasingly hostile to global businesses,” http://www.nationofimmigrators.com/?p=346.

The increase in fees will only serve to lower IT wages in India and serve as an incentive for more American IT jobs to leave the US. Only by increasing the H-1B numbers can the wage differential between American and Indian IT workers be narrowed. This is a perfect opportunity to remind everyone that, despite India’s vast population, there is a real and growing IT talent shortage in India, http://blogs.hbr.org/kanter/2009/03/what-indias-talent-shortage-me.html. Current immigration policy undercuts the ability of US IT companies to remain in the US by choking off H numbers and L numbers so that there their Indian competitors can lower salaries and attract US business. Not only will this lower IT salaries in India and drive more jobs out of US but it will accelerate the ability of the Indian IT industry to develop a critical mass of IT talent so that, rather than just attracting jobs from the US, they will have the ability to present a strategic alternative to Silicon Valley. This is a quantum difference from simply enticing US IT jobs to migrate to India. This will make Silicon Valley strategically irrelevant so that, regardless of what the H quota would be, or how many restrictions are attached, the numbers will gather dust since the desire to use them will no longer be present. The irrelevance of Silicon Valley is neither beneficial for the US nor India since the growth of Indian IT was largely fueled by Indian immigrants who benefitted and thrived in Silicon Valley.

This latest action shows the continuing conflict or tension between the global economy in which the US, like all advanced nations, participates and a national immigration policy that responds to domestic pressures. While the former requires the regular, predictable yet controlled movement of all forms of capital, including human capital, the latter does an injustice to the very groups that it claims to protect by promoting the exodus of white collar jobs. This kind of anti-Indian bias can only serve to conflict with, and so limit the effectiveness of, US attempts to improve the overall US-Indian relationship, precisely in the way that the Chinese Exclusion laws complicate US relationships with Japan and other Asian nations in the run up to World War II. At a time when we have signed a nuclear cooperation pact with India, when we seek expanded access into many different sectors of the Indian economy, to pursue immigration policies whose underlying and barely concealed purpose is to keep Indians out of the US and make it difficult for those already here to stay permanently makes no sense, if only from the narrow perspective of US national interest, let alone our moral stature as a leader on the world stage.

This is our main critique of the punitive legislative proposal against Indian companies. We object not because it insults India, which it does or even because it legitimizes Indian bashing as acceptable political discourse which is most certainly true. Rather, we object because it conflicts with American foreign policy and, by making the US economy less competitive in the global marketplace, fails to achieve its stated objective of protecting US workers against the winds of change. We seek to sail with these winds, to make them our friend and to benefit from the warmth of their embrace. So should we all. In a post-9/11 world of societal anxiety and pervasive joblessness, it is not hard to understand why Indian IT companies make an irresistibly inviting target. To those who take refuge in this, and in the possibility that such nativist wrath will not come to focus its fury on them, we urge most fervently that they think again and consider the teaching of German pastor Dietrich Bonhoeffer who gave his life in the struggle against Nazism:

“First they came for the Communists, but I was not a Communist so I did not speak out. Then they came for the Socialists and the Trade Unionists, but I was neither, so I did not speak out. Then they came for the Jews, but I was not a Jew so I did not speak out. And when they came for me, there was no one left to speak out for me”

(We give credit to our friend and colleague, Laura Danielson, a noted immigration attorney, for sowing the seeds for some of the ideas in this post)