BILL ANALYSIS                                                                                                                                                                                                    ”





          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 (HernŠndez) 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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