Immigration Reform: Americans First?

Senator Dick Durbin is weighing a proposal that would require companies to try to hire Americans before bringing in temporary foreign workers

A battle is brewing in Congress over how to treat high-skilled foreign workers who want to come to the U.S. for jobs. Last week, Representatives Luis Gutiérrez (D-Ill.) and Jeff Flake (R-Ariz.) introduced a plan for immigration reform that includes a sharp increase in the number of visas available to skilled workers coming to the U.S. on a temporary basis. It's similar to a proposal that had been expected from Senators Edward Kennedy (D-Mass.) and John McCain (R-Ariz.), although the McCain-Kennedy legislation appears to be stalled at the moment.

But BusinessWeek has learned that Senator Dick Durbin (D-Ill.), is formulating an alternative proposal that could impose much tighter standards on such workers, in an effort to address concerns that some employers have abused the program. One key point Durbin is considering is whether companies that want to bring workers into the country on a temporary work visa should be required to try to hire American workers before considering non-U.S. laborers.

Bogged Down

Such a requirement would be controversial with companies but popular among employees. "I think it's important that someone of Durbin's stature is considering something like this," says Marcus Courtney, president of the Washington Alliance of Technology Workers, a union-backed group.

Durbin has not signed off on the final version of the bill, and it could change before it is made public. One Durbin staffer said the legislation is expected to be introduced later this week. Another said Durbin is still negotiating with other politicians and "the draft legislation is a work in progress."

Durbin's effort could complicate the outlook for immigration reform. McCain and Kennedy had been expected to introduce a joint proposal for comprehensive reform, addressing problems with the millions of undocumented workers in the U.S. as well as highly skilled foreign workers. But that initiative has bogged down over the controversial issue of whether to give illegal immigrants an opportunity to become citizens. If the proposals for high-skilled workers become contentious too, that could force Congress to handle immigration reform in two stages, one for low-skilled and another for high-skilled workers. Or it could doom immigration reform altogether (see, 2/27/07, "Fresh Ideas for the Immigration Debate").

Strong Teeth

Durbin is considering the tougher standards for companies that want to bring temporary foreign workers into the country under the H-1B visa program. According to a summary of Durbin's draft proposal, before they could use such visas, companies would have to give a written pledge, or "attestation," that they made a good-faith effort to hire American workers first and that they were not displacing any American workers by bringing in non-U.S. employees.

That would mark a substantial change. Today, companies can hire workers on the H-1B program simply by paying the prevailing wage in a certain job. The U.S. Customs & Immigration Service has said that there's an assumption companies will hire Americans first if there's no financial advantage to hiring foreign workers. But there's no requirement that they try to do so (see, 2/8/07, "Work Visas May Work Against the U.S."). A Durbin spokesman said no one in the office, including the Senator, was prepared to comment on details in the proposal because they are not yet finalized.

Durbin's plan may also make it much harder for companies to hire foreign workers under the H-1B program at lower wages than current workers. One of the most common criticisms of the visa program is that companies use it to hire foreign workers at lower wages than they would pay Americans.

The Durbin draft summary says that companies would have to pay workers the highest salary as determined by three different measures, including the local prevailing wage and the median wage for all workers in the particular occupation, according to one person who has seen the draft. That, in turn, would raise wages in many cases.

Durbin may also put more teeth into the enforcement of work visa standards. Today, companies that use the program are rarely, if ever, contacted by the Labor Dept. Durbin is considering giving the department the ability to conduct random audits of any company that uses the H-1B program and requiring it to conduct annual audits of companies with more than 100 employees that have 15% or more of those workers on H-1Bs. H-1B workers may also have a confidential complaint line and stronger whistleblower protections.

"Not Either Or"

In contrast, the Flake-Gutiérrez bill is aimed primarily at increasing the number of H-1B workers who can come into the U.S. rather than at tightening the criteria. It calls for boosting the cap on H-1B visas to 115,000, from 65,000. The cap also would increase over time, and certain workers would be exempt from the cap altogether.

American companies have been pushing hard for such an increase. They've been limited in their ability to bring foreign workers to the U.S. because of the cap. "We want to make sure that our immigration laws are consistent with our economic needs," says Robert Hoffman, vice-president for government and public affairs at Oracle (ORCL) and spokesman for Compete America, a trade group advocating for more visas. Compete America's other members include Intel (INTC), Motorola (MOT), and Hewlett-Packard (HPQ).

Hoffman says that a requirement for U.S. companies to try to hire American workers first doesn't make sense. "To focus on that is missing the whole point of the program," he says. Hoffman says that tech companies face a shortage of skilled workers so they should have the latitude to hire talented employees, wherever they're from. "It's not either or," he says. "We will need both [American and foreign workers]."

A requirement to hire Americans first would present particular problems for Indian outsourcing companies that operate in the U.S. Wipro (WIT) and Infosys Technologies (INFY) are among the most active users of H-1B visas, typically to bring Indian employees to work in their U.S. operations. "That kind of proposal may not work," says Sridhar Ramasubbu, chief financial officer for the Americas and Europe at Wipro. "Companies need to go and get talent wherever it is available."

Slim Middle Ground

The issue of how to treat high-skilled workers has broad ramifications for the U.S. economy. On Mar. 7, William Gates III, co-founder and chairman of Microsoft (MSFT), told a Senate committee, "America should be doing all it can to attract the world's best and brightest. Instead, we are shutting them out and discouraging those already here from staying and contributing to our economic prosperity" (see, 3/8/07, "Gates to Senate: More Visas").

But many U.S. workers are upset at the idea that people from abroad should be able to come into the country and compete for jobs. They fear that foreign workers will take high-paying jobs and drive down wages, while discouraging young people from pursuing college courses in key disciplines. "I can't imagine why a person going into college would want to study engineering or computer science if they have to compete with workers who take jobs through outsourcing and coming to this country," says Tim Jurgensen, a Unix systems administrator in the tech group at a manufacturing company in the Northwest. Jurgensen identified his company in an interview, but asked that it not be named in this story because the company did not approve his remarks.

He's bothered that the leaders of major American companies, including Gates, are calling for the government to let in more workers from other countries, particularly if the standards for admittance are not made tougher. "My personal opinion," says Jurgensen, "is that big business has way too much power on Capitol Hill."

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