Visa program gives firms another way to import workers
When Celestica Inc. announced it was closing its Salem plant last month — and laying off 420 workers because it could manufacture more competitively on foreign soil – a curious fact wasn’t mentioned. During the last three years, the high-tech manufacturing firm imported 54 foreign employees into New Hampshire, supposedly because it couldn’t find such specialized workers here, according to data released by the U.S. Citizenship and Immigration Services.
Indeed, Celestica leads the state in petitioning for such employees under the government’s L1 visa program, which allows intracompany transfers for as long as five years with no limits and few labor protections.
During roughly the same time period — from 2001 to 2003 – Celestica’s restructuring plan has resulted in the closure or consolidation of 27 plants in the Americas and Europe. By Dec. 31, 2003, the company eliminated 18,190 jobs, according to statistics in its most recent annual report.
Celestica said it needs the foreign employees to “apply technology” because of “the global nature of our workforce,” said Pam White, a spokeswoman for the company, which is based in Canada. The Salem office filed the petition for the workers because its human resources director is located here. The workers were sent to work at facilities all over the nation.
“It’s not like they are taking someone’s job,” said White.
But many laid-off high technology workers are suspicious that workers here on such temporary visas are doing just that.
They say the L1 visa program is used to import lower-paid high-tech workers to replace or drive down the wages of their American counterparts. They also charge that the program is secretive, run though CIS under the Department of Homeland Security and is a means to avoiding the more regulated, and more open, H1 visa program, which is partly managed by the U.S. Department of Labor.
Altogether, CIS granted 163 New Hampshire companies 506 L1 visa petitions during the last three years, according to a database obtained by New Hampshire Business Review from the CIS though the federal Freedom of Information Act. Some 121 of these visas are still in effect.
The list received by NHBR marks the first time CIS has released any names of companies granted L1 visa petitions, according to activists who have been trying for years to get such data nationwide.
The list is far from complete, because it doesn’t include foreign employees who work in New Hampshire but are brought in through the L1 program from companies in other states. It does include workers brought in to the state and farmed out elsewhere.
CIS won’t release actual petitions, which would say where the workers were supposed to work, though that could change under the recently passed LI Visa Reform Act, which goes into effect in June.
North of the border
While Celestica led the state list of L1 visa petitioners, not all companies importing foreign workers are high-tech firms. Indeed several small local construction firms are on the list, raising the eyebrows of local labor unions.
And the main suppliers of foreign labor under the program are not lower-wage countries like India, but Canada and the British Isles. And half of the employees don’t have specialized skills, but are in management, according to the database.
One such management employee is Robert Hollinger, president of Venture Construction of Pembroke, which uses robotic machines developed by GL Inc. in Canada to waterproof bridges throughout the nation. Hollinger moved to New Hampshire five years ago to start up Venture, a subsidiary of GL, and has since brought his wife and four children to live with him in Bow.
The rest of Venture’s L1 visas – 10, according to the database, though Hollinger puts the number at seven — are for specialized engineers who train locally hired union workers how to use the machines to work on the bridges.
Although the Canadian engineers are entitled to live here for three years – with an option to renew the visa for another two – most of them come to the United States for a few weeks to complete a particular project and then return home, Hollinger said.
Hollinger, however, said he is in the process of applying for his green card and wants to settle in the Granite State.
“We aren’t taking anyone’s jobs. We are creating jobs,” Hollinger said. “All our subcontractors and suppliers are American as well. We pay the same taxes as anybody else.”
GL&V is another Canadian firm with a New Hampshire subsidiary, the former Beloit paper company in Bedford, according to Robert Gaulin, vice president of human resources for GL&V. The company also has a facility in Nashua.
The firm is actually buying up plants around the country, and sends its chemical engineers – the database says about 30, but Gaulin thinks that the number is a third as much – to train new employees in its process.
“They bring the approach, the culture, the knowledge of the company to do the transitions in a technology that is very specific,” Gaulin said.
Is it ‘insourcing’?
Critics of the program say they have no problem with the way businesses like GL&V and GL Inc. employ the L1 program.
“We are not saying that everybody is skirting the law,” John Bauman, president of The Organization for the Rights of American Workers (TORAW), an organization based in Meriden, Conn., and formed by several laid-off information technology workers. “The problem is that these body shops use the loophole in the law to allow some people to bring in people that can come in and take our jobs.”
They point to the poster boy of their movement, Michael T. Emmons, who in 2002 actually trained the L1 visa workers from Tata Consultancy Services who eventually replaced him at his job at a Siemens facility in Lake Mary, Fla.
“What Siemens and Tata Consulting did — ‘insourcing’ foreigners to replace Americans — is pathetic,” Emmons said.
Emmons eventually got an IT job with the Florida state government, but an outsourcing plan that could involve foreign workers might end his position there as well.
Testimony from people like Emmons caused Congress to reform the visa programs as part of the budget bill last December. The reforms were twofold. One was aimed at the H1-A program, which brings a limited number of specialized foreign workers into the United States. In addition to abiding by the nationwide cap – which increased from 65,000 to 85,000 at the end of last year – employers seeking such workers have to demonstrate that they could not hire these workers in the United States and that they would be making the prevailing wage rate.
Despite such safeguards, TORAW and other critics complain that companies haven’t made good-faith efforts to hire U.S. employees, paid foreigners lower wages and found loopholes to get around the cap.
The program was run by the U.S. Department of Labor, and it was easier to track how many workers worked and where they worked. In 2003, for instance, there were some 1,500 H1 workers in New Hampshire.
It also was possible to find out what companies were paying these workers. In 2003, Celestica, for instance, hired three H1-A specialty workers, including a process engineer who was paid $46,416 a year.
The H1-B reform act – aside from increasing the cap slightly and making some adjustments in the prevailing wage calculations – would substantially increase the fee for H1-B to as much as $2,185 per employee, depending on the company’s size. Most of that increase would go to retrain U.S. engineers displaced by the program, but another $500 would be set aside for fraud prevention.
The L1 program involves fewer workers than the H1 program because it requires a foreign parent company or subsidiary. But critics worry that some companies are hiring high-tech consulting firms with ties to other countries as a backdoor way of using the L1 program to get around the H1 caps, since the L1 program doesn’t have limits on the number of workers a firm can bring in. It also has no requirement to document need for a specialized worker or to match prevailing U.S. wages.
“Some are using the so-called L1 loophole to become the international equivalent of temp agencies,” said U.S. Sen. Saxby Chambliss, R-Georgia, when introducing the L1 reform Act in 2003.
How reform works
In New Hampshire, Geometric Software Solutions is the main consulting company bringing in employees from India – 23 in all – as “specialists in product life computer design” to “integrate our technologies,” explained Kalidas Surapaneni, vice president of business operations of the company, which is headquartered in India.
It has been difficult to hire locally, Surapaneni said, because U.S. workers “don’t want to wake up at midnight” to talk to company officials back in India. It has even recruited at local campuses, and has hired some engineers.
“We sincerely want to higher locally,” he said, “But many local people wouldn’t like the jobs, and they don’t always give quality work.”
The company has used the H1 visa program, but the nationwide cap prevented the company from importing more, he said, which led it to turn to the L1 visa program.
Surapaneni won’t say how much he pays his L1 visa workers, though he did say that some make $55,000 while others are paid as much as $96,000 a year.
The workers work two to five years at various locations, sometimes taking directions from his company and sometimes from those at the client site.
The L1 Visa Reform Act will affect companies like Geometric because it would forbid consultants from subcontracting out employees if they were not taking directions from the consulting firm itself.
But Bauman of TORAW has problems with the law because, he says, it doesn’t close all of the loopholes. He said it still allows consulting companies to set up shop at another workplace and subcontract out their work as a whole, rather than as individual consultants.
Chris Bentley, a spokesperson for CIS, defended the practices.
The CIS uses adjudicators to determine the management or specialized nature of the labor involved.
“If someone has received a petition, then they must have been fully eligible to do that. The adjudicators know the law, and we will stand by their decisions,” he said.
But critics aren’t mollified, noting that it is hard to determine whether the CIS is requiring companies to follow the law when so little information is available. The L1 reform act would require the release of more information, but it is unclear how much will be released until the agency completes the regulations to implement the law. And that could be long after June, when it is supposed to go into effect.