Senators claim offshore IT firms are 'abusing the system' on L visas

Durbin, Grassley say outsourcing vendors among top users -- just like with H-1B

The two U.S. senators who have been raising questions about H-1B visa use by offshore outsourcing vendors charged Tuesday that offshoring firms are also "abusing the system" through the use of another category of visas.

Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) released a list of the top users of L visas as well as a companion list that they said points to a connection between use of those visas and the H-1B by offshoring companies.

The L visas, which include the L-1 and other lesser-known cousins, can be used by multinational companies to transfer employees from overseas locations to offices in the U.S. They don't have some of the restrictions that H-1B visas do, such as a requirement that workers be paid wages that are on par with the prevailing salaries of American workers.

As the demand for H-1B visas increases, use of L visas has been growing as well, according to data that was produced by the U.S. Citizenship and Immigration Services at the request of Durbin and Grassley.

In the federal government's 2006 fiscal year, which ended last September, applications for more than 53,000 L visas were approved. That was up from about 49,400 in fiscal 2005 and about 47,700 the year before that.

And like the H-1B, the L visas are being heavily used by outsourcing vendors that transfer application development, help desk services and other IT work to offshore locations, according to the list posted online by Durbin and Grassley.

Topping the list of L users for fiscal 2006 was India-based Tata Consultancy Services Ltd., which received 4,887 of the visas. Tata, which also was awarded 3,046 H-1B visas last year, had been given 5,517 L visas in fiscal 2005, Durbin and Grassley said.

The two senators said that Teaneck, N.J.-based Cognizant Technology Solutions Corp., which has offshore facilities in India, received 2,226 H-1B visas and 3,520 L visas during fiscal 2006. The latter figure was up from 1,888 visas the year before.

India-based Wipro Ltd. received 4,002 H-1B visas and 839 L visas last year, Durbin and Grassley said. Infosys Technologies Ltd., the No. 1 user of H-1B visas in fiscal 2006 with 4,908, needed relatively few L visas by comparison: just 294 last year.

In statements, both Durbin and Grassley expressed concern about the use of the L visas, which can be issued in batches to companies that submit blanket petitions.

"The L visa is designed to give multinational companies the freedom to transfer managers and specialists within the company to their U.S. offices," Durbin said. "But some of these companies have hundreds, and in some cases thousands, of L visa workers. I find it hard to believe that any one company has that many individuals that are legitimately being transferred within a single year."

It's even harder to believe, he added, that the L visas are being used properly when many of the companies that are big users of them also employ large numbers of H-1B workers. "It's clear that foreign outsourcing firms are abusing the system, and we can't let that continue," Durbin said.

Ron Hira, an assistant professor of public policy at Rochester Institute of Technology in New York, said that among the steps Congress could take to better regulate the use of the L visas is to add prevailing wage requirements. Other possible constraints include prohibiting the use of the visas to displace American workers, he said.

Hira said that based on his review of the data posted by Durbin and Grassley, 14 of the top 20 users of L visas during fiscal 2006 were offshore outsourcing firms.

Durbin and Grassley released a similar list of the top users of H-1B visas last month. The two senators also have proposed legislation that would toughen the provisions of both the H-1B and L-1 visa programs.

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