Skip the navigation

H-1B loophole may help California utility offshore IT jobs

It is the second major utility in a year to announce IT outsourcing

April 17, 2014 05:41 PM ET

Computerworld - Southern California Edison is outsourcing part of its IT operations, and the jobs may be going overseas.

Edison (SCE) is working with Infosys, which is based in India, and iGate, a New Jersey-based company with major offshore centers, as it prepares to lay off workers, according to U.S. government records.

SCE said it is still actively evaluating outsourcing vendors, "and expects to select vendor partners by mid-year." It didn't say which vendors are in consideration.

Northeast Utilities, last fall, announced it was outsourcing part of its IT operations to Infosys and another Indian-based IT services giant, Tata Consultancy Services, and cut about 200 jobs. SCE isn't disclosing how many jobs may be cut, but the Los Angeles Times reports the number is in the hundreds.

NU employees have been training their replacements as a condition of their severance, a process that will likely occur at SCE, if it goes forward with its plan.

Edison said it expects to pick a vendor by mid-year.

The evidence pointing to offshore outsourcing, and to Infosys and iGate as at least two of the vendors, is based on government records. Edison runs some of its IT operations in Irwindale, Calif. As part of the hiring process for H-1B visa-holding workers, outsourcing vendors file a Labor Condition Application (LCA), a U.S. document with salary information and the address of the visa workers' worksite. There were as many as 130 LCAs filed by Infosys alone in the past year for the Irwindale address associated with SCE's offices, according to a large sampling of those filings collected by visa data analysis firm MyVisaJobs.

H-1B rules make it relatively easy for offshore outsourcing companies to replace U.S. workers, despite a rule to curb it.

If H-1B workers comprise 15% or more of an employer's workforce, the employer is classified as "H-1B dependent" by the U.S. government and subject to additional requirements. All the major offshore firms, including Infosys and iGate, are H-1B dependent.

H-1B dependent firms are required to take "good faith steps to recruit U.S. workers for the job for which the alien worker is sought" as well as to "offer the job to any U.S. worker who applies and is equally or better qualified than the H-1B worker," according to the government rules. But there's an easy workaround.

H-1B-dependent employers are exempted from U.S. worker protection rules if the H-1B worker is paid at least $60,000 or has a master's degree.

An annual salary of $60,000 is low for an IT professional, especially in the high-wage region of Southern California. The National Association of Colleges and Employers reported this month that the average starting salary for new college graduates -- nationally -- in computer science was $61,741.

The offshore companies, iGate and Infosys, both pay wages of more than $60,000 a year and therefore aren't obligated to meet the H-1B dependent rules.

Ron Hira, a public policy professor at the Rochester Institute of Technology, said H-1B-dependent firms are required to make three attestations: They must make a good faith recruitment of American workers prior to filing an LCA; they can't replace their American workers with H-1B workers; and they can't replace American workers employed with a client's company.



Our Commenting Policies