Too Many Visas for Techies?

U.S. workers gripe that lax rules may cost them their jobs

Bob Simoni has been fuming ever since Toshiba (TOSBF ) America Inc. replaced him last year with a foreign worker. Simoni recently found a short-term gig, but he wants Congress to do something about the H1B visa program that allows companies to bring in skilled foreign workers. The 39-year-old software engineer says he lost his job to such a person, in his case an Indian. Toshiba says the outsourcing of jobs "enables us to be more efficient." But to add insult to injury, says Simoni, Toshiba asked him to train his replacement: "I never thought this could happen in my field."

A battle is brewing over foreign professionals in America. On one side are people like Simoni, who say visas created for specialized workers such as the H1B and the L1 -- granted to foreign employees transferred to U.S. operations -- are being used to bring in rank-and-filers on the cheap. On the other side are multinationals and such groups as the American Electronics Assn. in Washington. They argue that strangling the visa program could undermine U.S. competitiveness and prompt American employers to send more jobs overseas. Says AEA President William T. Archey: "We still want to have access to the best talent."

Rising joblessness has made visas a hot-button issue. There are an estimated 700,000 holders of H1B and L1 visas in the U.S., and critics say the number may be closer to 1 million. In the past two months, Congress has introduced four bills aimed at reforming the visa system. The proposed changes range from imposing new limits on existing programs to scrapping them altogether. While some of the bills are too draconian to pass, Representative Donald A. Manzullo (R-Ill.), who held a hearing in June on the loss of white-collar jobs, says some re-form is "going to happen."

The L1 is generating the most controversy. Instituted in 1970, the L1 has no numerical cap, unlike the H1B. Since 1998, the number of L1 holders has surged 58%, to 58,000 last year.

Critics say the visa has become the preferred tool to replace well-paid Americans with lower-wage foreigners. Partly, that's because the rules governing the L1 are far less restrictive than those for the H1B. While the H1B is filed for individuals, companies can file L1 petitions on behalf of dozens of workers at once. This, say critics, makes it hard for authorities to scrutinize each application. And unlike H1B holders, workers with L1 visas need not be paid "prevailing wages," nor must employers attest that attempts have been made to recruit a U.S. worker for the post.

So how could the visa program be reformed? Although legislation is unlikely to be passed until next year, a bill proposed by Representative Rosa L. DeLauro (D-Conn.) is starting to gain support from lawmakers, activists, and immigration experts. It would impose an annual cap of 35,000 L1 visas, ban the filing of several applications at once, and require companies to pay prevailing U.S. wages. "I believe the situation is reaching crisis proportions," says DeLauro. "We have every opportunity to do something about the L1."

As for the H1B, the quota is set to fall on Oct. 1 from 195,000 to 65,000. Congress had temporarily raised the quota in 2000 under pressure from the tech industry, which was trying to staff up during the Internet boom. The change should placate many critics.

Yet the H1B battle is far from over. Critics say the government needs to do a better job of enforcing existing rules, especially the requirement that companies pay prevailing wages. They also say people applying for visa extensions should be counted against the cap. Owing to peculiarities of the immigration system, only 40% of the 200,000 H1B visas approved last year counted.

But tech-industry groups in favor of the visas are not backing down. Some argue that the government should retain the current quota of 195,000 and not tinker with the program. "If there are more restrictions, then we'll see a lot more offshoring," says Kiran Karnik, president of the National Association of Software & Service Cos., an Indian tech trade group. Either way, Simoni figures his future in software looks grim. He's making plans to leave tech and become a teacher.

By Spencer E. Ante in New York, with Paul Magnusson in Washington

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