the truth about the Durbin/Grassley H-1B/L-1 reform bill

Date: Friday, August 21, 2009 4:59 AM

<<<<< JOB DESTRUCTION NEWSLETTER No. 2050 -- 8/21/2009 >>>>>

Stephanie Overby wrote a rather cynical assessment of the H-1B and L-1 Visa
Reform Act of 2009 (S.887). The bill was introduced to Congress by Senators
Chuck Grassley (R-Iowa) and Richard Durbin (D-Ill.) Many people will think the
article is overly negative but it is actually quite objective and realistic.

In the spring of 2009 when S887 was introduced I didn't mention it with a
newsletter because I thought it was of so little consequence it wasn't worth
the bandwidth or the trouble. Let me explain why with a brief history lesson.

Durbin and Grassley originally introduced the bill in 2007 as S. 4169. My
assessment at that time was that the bill had more to do with placating angry
constituencies than solving problems. At the time I was about the only H-1B
activist that voiced any skepticism about the bill at all, except for Norm
Matloff, who was far more positive about the bill's merits than I was.

In response to S. 4169 the following two newsletters were written. (Go to the
archive and look up by date if the link is cut up too much).

http://www.jobdestruction.info/NewsArchive/2007-04-03%20Dubin%27s%20bill%20on%20H-1BL-1.htm
Dubin's bill on H-1B/L-1

http://www.jobdestruction.info/NewsArchive/2007-04-05%20hoopla%20over%20DurbinGrassley%20bill%20to%20reform%20H-1BL-1.htm
hoopla over Durbin/Grassley bill to reform H-1B/L-1

There was an attempt to place a variant of the amendment into the
Comprehensive Immigration bill in 2007. It was called the McCaskill-Durbin-
Grassley amendment, or S.A. 1468. The amendment was soundly rejected but
fortunately it was a moot issue since CIR was derailed.

S. 4169 showed up again during the TARP bailout. Senators Bernie Sanders
(I-VT) and Charles Grassley (R-IO) introduced amendment S306, which was a
smaller version of S. 4169. It put mild restrictions on H-1B hiring by banks
that receive bailout money. The amendment actually survived but AILA lobbyists
succeeded in watering it down to the point it was mostly meaningless. AILA
vowed to crush the amendment so the fact that it survived at all is somewhat
of a mystery. Cheap labor advocates still gripe about
S306 because they don't want us the pleasure of enjoying a small symbolic
victory.

To read more about S. 4169 read these newsletters:

http://www.jobdestruction.info/NewsArchive/2009-02-06%20Amendmet%20S306%20in%20Stimulus%20Bill%20Restricts%20H-1B%20hiring%20in%20banks.htm
Amendmet S306 in Stimulus Bill Restricts H-1B hiring in banks

http://www.jobdestruction.info/NewsArchive/2009-02-10%20Amendment%20S306%20watered%20down%20in%20Senate%20voice%20vote.htm
Amendment S306 watered down in Senate voice vote

http://www.jobdestruction.info/NewsArchive/2009-02-11%20AILA%20and%20Chamber%20of%20Commerce%20join%20forces%20to%20destroy%20SA306.htm
AILA and Chamber of Commerce join forces to destroy SA306

For Matloff's slant on the bill read these:

http://heather.cs.ucdavis.edu/Archive/DurbinBill.txt
major news--Sen. Durbin introduces H-1B/L-1 bill

http://heather.cs.ucdavis.edu/Archive/DurbinBillStatus.txt
status of Durbin/Grassley bill

S. 4169 didn't pick up a single co-sponsor in the 110th Congress. So far,
neither has the newer version S. 887. It would be easy to conclude that the
lack of co-sponsors is due to the fact that there are no Senators who want to
reform H-1B/L-1, and furthermore they are so intimidated by the business lobby
that they don't want to expend political capital on a bill that has absolutely
no chance of passing.

There is another conclusion that is equally possible: S. 4169 and 887 are
merely placebo bills that are intended to placate their constituencies and to
garner pro-labor media attention. If that was the goal then the bills are a
success -- even Lou Dobbs gushed all over Durbin and Grassley at the time 4169
was introduced. This theory gains credence because it would seem that if
Durbin or Grassley took these bills seriously they should have had enough
political power to pressure at least several senators to sign on.
They are, after all, senior members of the Senate! Perhaps senators have a
gentlemen's agreement that the D/G bills are nothing but placebos so there is
no reason to co-sign if doing so could get them in trouble with big business.

In conclusion, Overby's article is right on the money but it doesn't go far
enough. Overby did an excellent job and unfortunately she is probably correct
about the future of H-1B. In fact her article is so good that she must be
reading the "Job Destruction Newsletter" archive to get her information. LOL!

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.computerworld.com/s/article/9136799/Truth_About_the_H_1B_and_L_1_Visa_Reform_Act_of_2009?taxonomyId=72

Truth About the H-1B and L-1 Visa Reform Act of 2009 Stephanie Overby

August 18, 2009 (CIO) Since the H-1B and L-1 Visa Reform Act of 2009 was
introduced in Congress this spring, business and political leaders on both
sides of the non-immigrant visa issue have interpreted the bill to support
their respective causes. Thus, the proposed legislation is either a cure to
the job losses and salary declines afflicting American IT workers, or it's a
work of overzealous xenophobia destined to do irreparable harm to U.S.
global business relations, depending on who is providing the analysis.

The truth is, it's neither.

So as Congress spends its dog days of August in recess, CIO.com takes a closer
look at what the bill is and what it isn't.

It isn't a referendum on the H-1B and L-1 visa programs-or on offshore
outsourcing.

Sam Mittal, president of India's National Association of Software and Services
Companies (NASSCOM), has said that the H-1B and L-1 Visa Reform Act includes
"unfair trade practices" that will damage business relations between the U.S.
and India. Mittal's point is of course debatable, but the bill is actually
rather limited in scope.

The legislation, introduced by Senators Chuck Grassley (R-Iowa) and Richard
Durbin (D-Ill.) in April, targets loopholes in the H-1B and L-1 visa programs.
It does not propose lowering the annual cap on the non-immigrant professional
visas. In fact, Sen. Grassley has said in the past that he would support an
increase in the number of H-1B and L-1 visas granted each year "if and only if
the loopholes in the programs are fixed."

Some of the specific changes Grassley and Durbin propose to the visa programs
include:

* authorizing the Labor Department to review H-1B applications for fraud

and to conduct random audits of sponsoring companies (at least 1 percent of
all applications)

* requiring the Labor Department to conduct annual audits of companies who

employ large numbers of H-1B workers (those with more than 100 U.S.-based
employees, if more than 15 percent of such employees are H-1B visa holders)

* eliminating "H-1B only" job ads

* prohibiting employers from hiring additional H-1B and L-1 guest-workers

if they employ more than 50 U.S.- based employees and if more than half of
them are H-1B and L-1 visa holders (the so-called "50/50
rule")

It is only a bill.

That old Schoolhouse Rock song was right: It is a long journey to the capital
city and a long, long wait, sitting in committee. (Indeed, the H-1B and L-1
Visa Reform Act of 2009 is currently in committee.) But unlike the optimistic
Saturday morning cartoon jingle, most bills never make it past that point.

The last bill solely focused on H-1B and L-1 visas to break through was the
L-1 Visa and H-1B Visa Reform Act of 2004, which President George W. Bush
signed into law. It raised application fees, required employees to pay H-1B
workers 100 percent of the prevailing wage, and effectively increased the
number of visas awarded annually by exempting from the cap an additional
20,000 H-1B petitions for foreign nationals with advanced degrees from U.S.
institutions.

Among those bills that didn't survive were the USA Jobs Protection Act of
2003 from former Rep. Nancy Johnson (R-Conn.) and Sen. Christopher Dodd (D-
Conn.); the Bill to Abolish H-1B, introduced by former Rep. Tom Tancredo (R-
Colo.); the Defend the American Dream Act put forth by Rep. Bill Pascrell (R-
N.J.); and Grassley and Durbin's previous attempt at H-1B visa reform, the H-
1B and L-1 Visa Fraud and Abuse Prevention Act of 2007, which never made it
out of committee during the last Congressional session.

So what are the chances that this bill will become law? Durbin and Grassley
both sit on the Senate Immigration Subcommittee, which means the bipartisan
tag team should have more influence on how the legislation proceeds than Dodd
and Johnson did, says Ron Hira, associate professor of public policy at
Rochester Institute of Technology (RIT) and co-author of the book Outsourcing
America.

Still, few expect the H-1B and L-1 Visa Reform Act of 2009 to proceed as a
standalone bill.

It is likely to be incorporated into larger immigration legislation.

Like it or not, lobbying works. Representatives from both the supply and
demand side of the IT outsourcing community publicly support efforts to reduce
fraud in the system. Privately, however, they're pressuring lawmakers to
reduce the scope of the legislation.

"There is likely to be continued opposition in the business community to some
of the provisions of the bill, which add more roadblocks into the H-1B
process," says Allen Erenbaum, a partner in the Los Angeles office of law firm
Mayer Brown.

As a result, says Elizabeth Espin Stern, a partner in the Washington, D.C.
office of law firm Baker and McKenzie, "we do not expect the bill to proceed
separately from overall, comprehensive immigration reform."

Senator Charles Schumer (D-N.Y.), chairman of the Senate Immigration
Subcommittee, announced his intention to introduce immigration reform later
this year. Onlookers expect Grassley and Durbin to tack the components of the
bill (or something like it) to that broader legislation. And don't be
surprised if some of the original bill's more hard line measures-like the
50/50 rule-get watered down or edited out entirely, says Shalabh Garg,
director of offshore outsourcing consultancy neoIT.

There's just one colossal caveat: A legislative agenda packed with such thorny
issues as healthcare, climate change, and regulation of the financial system
may delay immigration reform efforts.

"With the ongoing political controversy about the topic-since that type of
reform would have to address the 11 to 18 million undocumented workers in the
country-we do not expect to see passage of the bill anytime soon," says Stern.

It isn't the only effort to reduce H-1B and L-1 visa fraud.

Most recently, the economic stimulus bill introduced H-1B visa restrictions
for companies that received funds from the Troubled Asset Relief Program
(TARP).

What's more, some companies that sponsor foreign-born professionals for H-1B
and L-1 visas are already reporting more scrutiny in the visa application
process.

"We have seen an increase, particularly among IT companies, for [information
such as] proof of work availability for the full three-year period of the
petition and attestations from outside parties (such as
clients) that the company employs true workers in professional specialties,"
says Stern. She notes that such requests are thus far the exception rather
than the rule. "Proof of the nature of the job duties is more frequently
requested."

U.S. Citizenship & Immigration Services (USCIS), which administers the H-1B
and L-1 visa programs, has beefed up its anti-fraud auditing efforts recently
with surprise site visits to companies that employ temporary non-immigrant
visa holders. The unannounced audits come on the heels of a study conducted by
the Office of Fraud Detection and National Security, which estimates that more
than one-fifth of H-1B petitions violate program rules. Offenses range from
technical violations to outright fraud.

However, unlike the rules set forth by the Grassley-Durbin bill, compliance
with USCIS's worksite investigations-while advisable-is not mandatory.

It is a sign that the H-1B and L-1 visa programs are here to stay.

The H-1B visa program remains a hot button issue with some very vocal critics,
among them IT labor unions like Alliance@IBM, lobbying groups such as Bright
Future Jobs, and individuals including RIT's Hira and University of California
at Davis computer science professor Norm Matloff. They argue that the non-
immigrant visa programs injure the U.S. IT workforce.

Although the reform bill addresses some complaints about visa administration
and regulation, it is actually a clear signal that H-1Bs and L-1s will remain
an option for U.S. employers for the foreseeable future.
The annual limit on H-1Bs awarded has been lowered from a high of 195,000 in
2003 to 65,000 (not counting the 20,000 additional set aside for advanced
degree holders), but the reform bill indicates that middle-ground seeking
legislators may be willing to raise the annual cap on such visas if the
proposed changes to the visa programs pass.

Even if neither happens, these visa programs aren't going away anytime soon.

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