BILL ANALYSIS Ó
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: AJR 12 Hearing Date: July 13,
2015
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|Author: |Eduardo Garcia |
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|Version: |June 29, 2015 |
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|Urgency: | |Fiscal: |No |
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|Consultant:| Alma Perez-Schwab |
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Subject: H-1B Visa program: investigation of misuse
KEY ISSUE
Should the Legislature urge the United States Department of
Labor and Congress to investigate the alleged misuse of the H1-B
Visa program?
ANALYSIS
Existing federal law establishes the H-1B program which applies
to employers seeking to hire nonimmigrant aliens as workers in
specialty occupations or as fashion models of distinguished
merit and ability and defines a specialty occupation as 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 program is for 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.
Existing law establishes certain standards in order to protect
similarly employed U.S. workers from being adversely affected by
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the employment of the nonimmigrant workers, as well as to
protect the H-1B workers. Employers must attest to the U.S.
Department of Labor that they will pay wages to the H-1B 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 - whichever is greater.
This Resolution 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 U.S. worker cannot be found.
2) The H-1B Visa program was never intended to be used as a
catalyst for laying off U.S. 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 jobs.
4) California's average unemployment rate in January 2015
was 6.9 percent with Imperial County's unemployment rate
being 20.6 percent.
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, AJR 12 makes the following resolutions:
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1) That the Legislature respectfully urges the U.S.
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 each Senator and Representative from California
in the Congress of the United States.
COMMENTS
1. Background on 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.
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
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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 facilities.
2. Allegations of Abuse of the H1-B Visa Program and Southern
California Edison:
According to various news accounts, recently Southern
California Edison (SCE) announced plans to lay off hundreds of
employees. 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 visa program is a way to
encourage foreign workers with specific expertise, mostly in
science, technology, engineering, and mathematics related
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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 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."
3. Other Recent Criticisms of the H1-B Program:
A June 3, 2015 article in the New York Times titled "Pink
Slips at Disney. But First, Training Foreign Replacements,"
raised similar concerns about allegations involving the misuse
of H1-B Visa program in technology jobs at Disney, Southern
California Edison, Fossil, and Northeast Utilities, among
others. The article stated:
"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.
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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
replacements.
?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."
4. Need for this resolution?
Because of the various accounts of alleged misuse of the H1-B
Visa Program, the author and sponsors of the resolution
believe it is necessary to urge the U.S. Department of Labor
and the Congress of the United States to investigate. Many
American companies use H-1B visas to bring in small numbers of
foreigners for openings demanding specialized skills, however,
it appears that most top recipients of the visas have been
outsourcing or consulting firms based in India, or their
American subsidiaries brought on to cut costs. Critics say
that 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 replacements.
5. Proponent Arguments :
According to the author, the H-1B visa law was crafted to
prevent displacement of U.S. workers and adverse treatment of
the H-1B visa worker. (U.S. Department of Labor Wage and Hour
Division Fact Sheet 62A) Recent media reports have described
violations of both provisions of the law. The author argues
that this is particularly unfortunate with the U.S. and
California economies beginning to showing signs of economic
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recovery after years of turmoil. Proponents and the author
argue that the H1-B visa program was never intended as a
vehicle to replace skilled workers in the U.S. 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.
6. Opponent Arguments :
The California Chamber of Commerce and the California
Manufacturers & Technology Association oppose this resolution
arguing that it abuses the resolution process by making
accusatory statements implicating a company rather than
condemning a particular practice. Unlike most Joint
Resolutions which urge or encourage certain practices within a
specific industry, this resolution sites "one California
public utility," therefore, unfairly targeting one company.
They argue that the language of the resolution sets a bad
precedence for future legislation to single out a specific
person, company, organization, or entity, rather than focus on
general policies that impact multiple entities. They believe
this is unnecessary and unfairly incriminates a company that
has done business in California for over 128 years.
7. Related Legislation :
AB 853 (Hernández) of 2015: Pending in Senate Energy,
Utilities and Communications
This bill 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.
SB 477 (Steinberg) of 2014: Chaptered
This bill was aimed at ending the exploitation of foreign,
temporary, nonimmigrant workers brought to California under
various federal work visa programs by requiring foreign labor
contractors to register with the Labor Commissioner, as well
as follow additional contractual and bonding requirements, as
specified.
SUPPORT
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Coalition of California Utility Employees (Sponsor)
California State Association of Electrical Workers
California State Pipe Trades Council
International Union of Elevator Constructors
Western States Council of Sheet Metal Workers
OPPOSITION
California Chamber of Commerce
California Manufactures and Technology Association
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