BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                     AJR 12

                                                                     Page A

          Date of Hearing:   June 24, 2015


                               Roger HernŠndez, Chair

          AJR 12  
          (Eduardo Garcia) - As Amended May 26, 2015

          SUBJECT:  H-1B Visa program: investigation of misuse.

          SUMMARY:  Urges the United States Department of Labor and  
          Congress to investigate the alleged misuse of the H1-B Visa  
          program.  Specifically, this resolution makes the following  
          legislative findings and declarations:

          1)The H-1B Visa program allows businesses to temporarily hire  
            highly skilled foreign workers with specialized knowledge  
            where a qualified United States worker cannot be found.

          2)The H-1B Visa program was never intended to be used as a  
            catalyst for laying off United   States' workers and replacing  
            them with H-1B workers.

          3)The granting of H-1B Visas should never result in the creation  
            of a virtual pipeline for outsourcing United States workforce  

          4)California's average unemployment rate in January 2015 was 6.9  
            percent with Imperial County's unemployment rate being 20.6  


                                                                     AJR 12

                                                                     Page B


          5)Some companies are misusing the federal H-1B Visa program,  
            including the documented misuse by one California public  
            utility to replace 400 California workers.

          6)Senate Bill No. 477 (Chapter 711 of the Statutes of 2014)  
            seeks to end the exploitation of foreign, temporary,  
            nonimmigrant workers brought to California under various  
            federal work visa programs.

          7)Displaced American workers are being exploited through the  
            misapplication of the H-1B Visa program.

          In addition, this resolution makes the following resolutions:

          1)That the Legislature respectfully urges the United States  
            Department of Labor and the Congress of the United States to  
            investigate this alleged misuse of the H1-B Visa   program.

          2)That any company that has engaged in this improper practice is  
            urged to immediately cease the practice of replacing  
            California employees with foreign workers under this, or any  
            other, program.

          3)That the Chief Clerk of the Assembly transmit copies of this  
            resolution to the President and Vice President of the United  
            States, the Speaker of the House of Representatives, the  
            Minority Leader of the House of Representatives, the Majority  
            Leader of the Senate, the Minority Leader of the Senate, and  


                                                                     AJR 12

                                                                     Page C

            each Senator and Representative from California in the  
            Congress of the United States.

          FISCAL EFFECT:  None.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          Overview of the H1-B Visa Program

          The H-1B program applies to employers seeking to hire  
          nonimmigrant aliens as workers in specialty occupations or as  
          fashion models of distinguished merit and ability.  A specialty  
          occupation is one that requires the application of a body of  
          highly specialized knowledge and the attainment of at least a  
          bachelor's degree or its equivalent.  The intent of the H-1B  
          provisions is to help employers who cannot otherwise obtain  
          needed business skills and abilities from the U.S. workforce by  
          authorizing the temporary employment of qualified individuals  
          who are not otherwise authorized to work in the United States.

          The law establishes certain standards in order to protect  
          similarly employed U.S. workers from being adversely affected by  
          the employment of the nonimmigrant workers, as well as to  
          protect the H-1B nonimmigrant workers. Employers must attest to  
          the Department of Labor that they will pay wages to the H-1B  
          nonimmigrant workers that are at least equal to the actual wage  
          paid by the employer to other workers with similar experience  
          and qualifications for the job in question, or the prevailing  
          wage for the occupation in the area of intended employment -  


                                                                     AJR 12

                                                                     Page D

          whichever is greater.

          Prospective employers must obtain a certification of a Labor  
          Condition Application (LCA) from the U.S. Department of Labor  
          (DOL).  This application includes certain attestations, a  
          violation of which can result in fines, bars on sponsoring  
          nonimmigrant or immigrant petitions, and other sanctions to the  
          employer.  The application requires the employer to attest that  
          it will comply with the following labor requirements:

                 The employer will pay the beneficiary a wage which is  
               no less than the wage paid to similarly qualified workers  
               or, if greater, the prevailing wage for your position in  
               the geographic area in which you will be working.

                 The employer will provide working conditions that will  
               not adversely affect other similarly employed workers. At  
               the time of the labor condition application there is no  
               strike or lockout at the employer place of business. 
          The duration of stay under an H1-B visa is three years,  
          extendable to six years.  The current law limits to 65,000 the  
          number of foreign nationals who may be issued a visa or  
          otherwise provided H-1B status each fiscal year.  Laws exempt up  
          to 20,000 foreign nationals holding a master's or higher degree  
          from U.S. universities from the cap on H-1B visas.  In addition,  
          excluded from the ceiling are all H-1B non-immigrants who work  
          at (but not necessarily for) universities, non-profit research  
          facilities associated with universities, and government research  


                                                                     AJR 12

                                                                     Page E

          Recent Allegations of Abuse of the H1-B Visa Program and  
          Southern California Edison

          Recently, Southern California Edison (SCE) announced plans to  
          lay off hundreds of employees and hire foreign workers.  SCE  
          announced that it was laying off about 400 information  
          technology employees, with an additional 100 leaving  
          voluntarily.  SCE said that it was outsourcing some tech-related  
          work to two Indian companies, Infosys in Bangalore and Tata  
          Consultancy Services in Mumbai, after looking at multiple firms.  
           According to SCE, about 70% of the work would be done by Tata  
          and Infosys will be completed offshore, but did not know whether  
          or not foreign workers would be brought to the US to complete  
          the remaining 30% of the work.  SCE said the layoffs are  
          necessary to stay competitive. 

          In addition, some of the foreign workers hired by SCE are in the  
          US because of the H-1B visa.  The H-1B visa allows United States  
          (US) companies to temporarily hire foreign workers in certain  
          occupations.  The number of visas is capped at 65,000 (plus  
          20,000 for workers with master's degrees) annually.  The visa is  
          a way to encourage foreign workers with specific expertise,  
          mostly in science, technology, engineering, and mathematics  
          related fields, to work in the US in areas where there is a  
          shortage of US workers.  In March 2015, the US Senate Judiciary  
          Committee held a hearing on "Immigration Reforms Needed to  
          Protect Skilled American Workers."  The hearing focused on  
          problems with the H-1B and other visa programs.  The hearing  
          noted that the visas are used to bring high-skilled workers into  


                                                                     AJR 12

                                                                     Page F

          the US so that companies can continue to attract world-class  
          talent and continue to lead on the global stage.  However, the  
          hearing highlighted troubling stories of abuses that have caused  
          the displacement of American workers, and noted that these visa  
          programs are to be used to complement the US workforce, not  
          displace it.

          The Los Angeles Times reported in April that the Department of  
          Labor was not planning to investigate alleged abuse of the H1-B  
          visa program by SCE.  However, on May 29, 2015, an official from  
          U.S. Citizenship and Immigration Services wrote to a Member of  
          Congress that the agency strives "to do our work with the  
          greatest possible integrity and efficiency." The letter  
          continues, "This includes following up on concerns such as those  
          you raise regarding Southern California Edison to ensure that  
          petitions are entirely consistent with our legal framework.  
          USCIS will work with the Department of Labor to review visa  
          petitions and labor condition and certification applications, as  
          appropriate. If we receive information that alleges violations  
          have occurred, the Department will take appropriate action to  
          maintain the integrity of our programs."

          Other Recent Criticisms of the H1-B Visa Program

          A recent article<1> in the New York Times raised similar  
          concerns about allegations involving the use of H1-B visa in  
          technology jobs at Disney, Fossil, and Northeast Utilities,  
          among others.  The article stated:



                                                                     AJR 12

                                                                     Page G

            "But the layoffs at Disney and at other companies, including  
            the Southern California Edison power utility, are raising new  
            questions about how businesses and outsourcing companies are  
            using the temporary visas, known as H-1B, to place immigrants  
            in technology jobs in the United States. These visas are at  
            the center of a fierce debate in Congress over whether they  
            complement American workers or displace them.

            According to federal guidelines, the visas are intended for  
            foreigners with advanced science or computer skills to fill  
            discrete positions when American workers with those skills  
            cannot be found. Their use, the guidelines say, should not  
            "adversely affect the wages and working conditions" of  
            Americans. Because of legal loopholes, however, in practice,  
            companies do not have to recruit American workers first or  
            guarantee that Americans will not be displaced.

            Too often, critics say, the visas are being used to bring in  
            immigrants to do the work of Americans for less money, with  
            laid-off American workers having to train their  

            'The program has created a highly lucrative business model  
            of bringing in cheaper H-1B workers to substitute for  
            Americans,' said Ronil Hira, a professor of public policy at  
            Howard University who studies visa programs and has  
            testified before Congress about H-1B visas?

            ?H-1B immigrants work for less than American tech workers,  
            Professor Hira said at a hearing in March of the Senate  
            Judiciary Committee, because of weaknesses in wage  
            regulations. The savings have been 25 percent to 49 percent in  
            recent cases, he told lawmakers."


                                                                     AJR 12

                                                                     Page H


          Supporters argue that the H1-B visa program was never intended  
          as a vehicle to replace skilled workers in the United States.   
          In some instances, the workers that were being laid off were  
          coerced into training their replacements.  They argue that this  
          is a violation of the letter and spirit of the program and such  
          behavior cannot be tolerated.



          AB 853 (Roger HernŠndez) would require an electrical or gas  
          corporation to use direct employees for any work associated with  
          the design, engineering, and operation of its nuclear,  
          electrical, and gas infrastructure, including all computer and  
          information systems, to the extent feasible.  Furthermore, AB  
          853 would prohibit an electrical or gas corporation from using a  
          non-direct employee, unless it files a Tier 3 advice letter with  
          the California Public Utilities Commission that demonstrates  
          that the work can be performed safely and securely, and without  
          jeopardizing the security of the utilities infrastructure.  AB  
          853 is currently pending in the Senate.  




                                                                     AJR 12

                                                                     Page I


          California State Association of Electrical Workers

          California State Pipe Trades Council

          Coalition of California Utility Employees (sponsor)

          International Union of Elevator Constructors

          Western States Council of Sheet Metal Workers


          None on file.

          Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091


                                                                     AJR 12

                                                                     Page J