U.S. lawmakers: L-1 visa program needs changes

But the head of the ITAA said the program 'is not broken in any fundamental way'

Two laid-off U.S. workers testified before a U.S. House of Representatives committee yesterday that they were fired by IT companies and replaced with cheaper labor brought to the U.S. under a worker visa program designed to fill jobs needing special skills.

Patricia Fluno, a programmer from Orlando, said she and about 14 other employees of Siemens Information and Communications Networks Inc. were laid off in mid-2002 and forced to train their replacements from India. "We lost our jobs, and we had to train our replacements so there would be little interruption to Siemens," Fluno told the House International Relations Committee. "This was the most humiliating experience of my life."

A Siemens representative didn't return a phone call seeking comment on Fluno's testimony.

Republican and Democratic House members beat up on the L-1 visa program, which allows companies to transfer to the U.S. their foreign employees with special knowledge of the company or managerial or executive skills. Lawmakers called for limits on the number of L-1 visas granted each year and new rules that would allow enforcement against abuses of the L-1 program, which is often used to fill technology jobs.

The L-1 visa program is making it easy for U.S. companies to move jobs overseas, lawmakers argued. "America is in danger of losing that level of prosperity which allows us to work as an agent for positive change in the rest of the world," said committee Chairman Henry Hyde (R-Ill.). "... Are we being lax in the offshoring of American jobs, often facilitated by 'in-shore' training first given to L visa holders right here in the United States, so they can take new skills -- and American jobs -- home with them?"

The lone voice defending the current L-1 visa program during the hearing said no evidence exists of widespread program abuse. Harris Miller, president of the Information Technology Association of America, said abusers of the program should be prosecuted, but he feared changes to L-1 rules would trigger a trade war that would hurt U.S. IT companies, which export more IT products than are imported into the U.S.

Miller called the L-1 program a "critical tool" for U.S. IT companies needing to fill key jobs. U.S. IT companies often prosper by bringing in specialists, resulting in more jobs for U.S. workers, he said.

The ITAA opposes limits on L-1 visas and most new rules designed to reform the program. Instead, Miller called for a better definition of the "specialized knowledge" needed by L-1 applicants, because some companies may have too broadly defined the category. An applicant is supposed to have specialized knowledge of the company's products, service, research, equipment or other functions, or advanced knowledge of the company's processes and procedures.

"The L program is not broken in any fundamental way," he said. "However, it can be improved."

Under the L-1 visa program, employees with specialized skills can stay in the U.S. for five years, and executives can stay seven. But unlike its cousin, the H-1B visa program, Congress hasn't limited the number of L-1 visas allowed each year, and the number has grown from just over 75,000 in 1992 to more than 328,000 in 2001, according to the Federation for American Immigration Reform. The ITAA's estimates are lower; it estimates that about 121,000 new L-1 visa holders entered the U.S. in 2001.

Rep. Tom Lantos (D-Calif.) agreed that the definition of "specialized knowledge" is too broad and called for additional changes. He said the House should support the L-1 Nonimmigrant Reform Act, which would require L-1 workers to be paid the prevailing wage and would prohibit L-1 workers from displacing U.S. workers. The bill, one of at least three pieces of legislation before Congress that are intended to reform the program, would also allow fines of up to $1,000 for each violation of L-1 rules.

Lantos accused some U.S. companies of using the L-1 visa to drastically lower wages. "What we are dealing with is high-tech indentured servitude," Lantos said. "We are dealing not only with a loophole of gigantic proportions, but also a scandal of gigantic proportions. It's up to the Congress to rectify the situation, and I fully anticipate we shall."

Rep. Brad Sherman (D-Calif.) also called for a tax of $2,000 to $3,000 per month paid by companies for each L-1 worker employed. The money could pay for investigations into L-1 misuse, Sherman said.

Programmer Sona Shah, a former employee of outsourcing service provider ADP Wilco, agreed with Lantos that abuses in the L-1 program exist. She accused her former employer of hiring Indian workers for a fraction of U.S. wages while declining to give work to U.S. employees in its New York office. Shah, fired in April 1998, and a former co-worker from India are now involved in a lawsuit against ADP Wilco, a subsidiary of Automatic Data Processing Inc.

A representative of ADP Wilco declined to comment on Shah's testimony.

U.S. workers weren't the only victims. Indian workers were paid about half the prevailing wage of U.S. workers doing similar jobs, according to information Shah provided the committee. "This is not an issue of Indians vs. Americans," said Shah, who was born in India but is a U.S. citizen. "This is not about being anti-Indian or anti-immigration. This is about reforming corporate abuse of unregulated visa programs that are out of control."

The ITAA's Harris called the stories from Shah and Fluno "isolated cases."

"We believe the program is fundamentally sound," he said. "If [companies] have violated the law ... then they should have the book thrown at them."

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