The H-1B visa program is supposed to have safeguards against abuse, including rules designed to ensure that guest workers are not a significantly cheaper option for companies looking to save a buck. But Costa says 83 percent of the H-1B recipients are paid wages below the average for that occupation, because of flaws in the system.
February 22, 2016
Stuart Zwicke lasted eight years in the information technology department at Molina Healthcare of New Mexico, in Albuquerque, where he watched everyone on his original team let go.
“I did not apply to Molina,” he says. “They reached out to me because of my job skills and technical skills. They brought me in to design and build their data center, the heartbeat of the entire company here in New Mexico.”
The data center was miles from the company’s main headquarters in Long Beach, California, and Zwicke and two others were the only ones working there. Instead of bringing in permanent help, he said, the company would rotate in groups of workers for a week or so at a time, to be trained at the center.
“I would tell my senior management, ‘We have a really big problem here,’ ” Zwicke says. “At the time I was a senior administrator, and these guys didn’t have the basic 101 skill set. We did everything we could, we were doing eighty-, ninety-hour weeks and trying to groom them as we went along.”
The workers, Zwicke learned, were brought in by a contractor, Cognizant, on H-1B guest worker visas, supposedly issued for workers with specialized skills. But Zwicke says that, in fact, the new workers made his job harder. He’d ask to see the résumés for workers he was training, to gauge their skill levels, but says all he received were assurances that the workers were qualified.
Back in Long Beach, in 2010, eighteen workers in the company’s information technology department were laid off. According to attorney James Otto, who filed suit on behalf of those eighteen workers, the company turned around and brought in forty new workers via Cognizant. The employees who’d been let go had made an average of $75,000 a year; the guest workers would be paid much less, and receive no benefits.
“They’d say this is cost-effective, this is the way it is, get with the program or else,” says Zwicke, a combat veteran who, in August, after his second heart attack, was also let go. (Otto has filed a discrimination complaint on Zwicke’s behalf.)
To Otto, who also represents workers at Disney who were laid off and then required to train their replacements, the process of replacing American workers with H-1B temporary hires through companies like Cognizant is part of the further commodification of labor.
“Disney just doesn’t care about people, that’s the bottom line, which is funny for Disney because that’s the business they’re in,” Otto says. “Everybody they replaced was highly skilled, highly productive, and highly regarded because each one of them had performance evaluations for several years running that said they were exceptional.”
Otto has also filed a lawsuit on behalf of Yelena Kutepova, who worked in the information technology department at the Screen Actors Guild Producers Pension and Health Plans since 1998. As she recalls, “My reviews were excellent, I was very professional.” But she was surrounded by guest workers, some of whom would go back home after their visa ended, only to return again and again.
In 2012, Kutepova was diagnosed with breast cancer. At first, she says, she scheduled her medical treatments during her lunch hour so she could still work. When her boss complained about her being late returning from the doctor, she stopped going to treatments. Nevertheless, last summer she was let go. The written reason for her layoff was “to reduce the number of [SAG] employees in the IT Department.”
At the same time, a group of her colleagues were also let go. “All of us were over age fifty,” she says. Kutepova was two years from retirement. Last she heard, her job was being filled by more guest workers. “After you put in seventeen years, you feel like the place is your family,” she says. “I think, ‘Why did this happen to me? I didn’t do anything wrong.’ ”
“When they bring in these foreign workers, they don’t believe they have rights...what they want, what they demand, is subservience.”
The H-1B visa has its origins in the 1990 Immigration Act and was intended, according to Daniel Costa, director of immigration law and policy research at the nonprofit Economic Policy Institute, to bring in workers with specialized skills to complement, not replace, workers already in the United States.
The program has been capped at 65,000 visas per year (the visas normally, though not always, are good for three years), with an additional 20,000 available for workers who’ve attained advanced degrees at U.S. institutions. But there has been a push in recent years to raise that cap, as technology companies have put together a massive PR and lobbying blitz arguing that there are not enough Americans with the requisite skills in so-called STEM (science, technology, engineering, and math) fields.
That push made the H-1B question a huge—and hugely contentious—part of the 2013 immigration reform negotiations in Congress; the top ten H-1B donors spent $8.2 million on candidates in the prior election cycle. Tech companies, including Microsoft, Facebook, and Google, pushed hard for a hike in the cap, and, Costa says, “basically got almost everything they wanted,” though the bill ultimately failed to pass.
The H-1B visa program is supposed to have safeguards against abuse, including rules designed to ensure that guest workers are not a significantly cheaper option for companies looking to save a buck. But Costa says 83 percent of the H-1B recipients are paid wages below the average for that occupation, because of flaws in the system.
“The usual argument from proponents of H-1B expansion is these are the best and brightest workers,” Costa says. “Either that’s true and they’re just being paid really low wages, or they really are entry-level workers whose skills are new and cheap.”
Shannon Lederer, director of immigration policy at the AFL-CIO, notes that while the guest worker system is structured into narrow slivers, with different visa qualifications, it’s instructive to look at the system as a whole.
“It really does reveal a lot when you see how consistent the patterns of abuse are across wage and skill distinctions,” Lederer says. “The abuses that guest workers face really aren’t due to the fact that they don’t speak English well or aren’t well educated; they’re baked into the power asymmetries that the work visa programs institutionalize.”
Workers who dare to make demands on their employers are often told: If you don’t like it, find another job. But guest workers literally cannot do so. Like other guest workers, H-1B workers are tied to the employer who brings them in, and have an added incentive to behave on the job since an H-1B employer can sponsor them for an eventual green card. Their choice is to stay at the job or get on a plane home.
“When they bring in these foreign workers, they don’t believe they have rights,” says Otto. “Every employer who imports these foreign workers, what they want, what they demand, is subservience.”
Jim Roepp, deputy legal director of the Immigrant Justice Project at the Southern Poverty Law Center, notes that this works to the disadvantage of other workers as well. “It’s awfully hard for a U.S. worker to compete with somebody who has to work at that employer regardless of what the conditions might be,” he says.
Even when H-1B workers aren’t much cheaper than U.S. workers, the program still creates conditions ripe for abuse and suffers from inadequate oversight, according to Lederer. “There is no one whose job it is to look across all the visa programs,” she says. “Nobody wants to reveal what the total is, because when you add it up it amounts to hundreds of thousands of new, vulnerable workers every year without adequate rights and protections.”
The top employers of H-1B workers are all companies like Cognizant, which Otto refers to as “body shops.” Like temporary staffing agencies in the United States, these companies do all the work of hiring—including procuring visas—and are the guest workers’ legal employer. That way, companies like Disney and Molina can maintain they haven’t hired any guest workers; they’re just “leasing” them from the staffing agency.
Like the in-country staffing agencies, Lederer says, companies that hire H-1B workers seek a more flexible, disposable workforce. Stuart Zwicke and Yelena Kutepova each suffered serious health problems and asked their employers to allow them time to get healthy; a brand-new young H-1B worker would not seek such accommodation.
Companies can also directly hire H-1B workers, or independent recruiters can help place them, but Lederer says research she’s read “shows that the staffing agency model holds the greatest potential for exploitation.” In Atlanta, for example, when H-1B public school teachers were hired through a staffing agency, the public contract showed how much the district was paying the agency but, Lederer says, “there was no due diligence by the district to know how much the agency was paying teachers—that’s how the distancing obscures responsibility.”
Many staffing companies are also outsourcing companies, which bring in workers for what they call “knowledge transfer”—think the Disney workers, training their own replacements—and then send the jobs back overseas with the guest workers, offshoring them permanently.
As with wages, there are rules meant to prevent the kind of displacement charged at Disney and Molina. But Costa says companies that are “H-1B dependent” can get around those rules by hiring H-1B workers with master’s degrees, or by paying them more than $60,000. That may sound like a decent wage, but Costa notes it’s often at least $20,000 less than the average wage in the technology sector—giving these companies a substantial saving on labor costs.
Companies using H-1B workers have been accused of skirting even the minimal wage requirements. In 2013, the staffing agency Tata agreed to a $29 million settlement in a suit alleging it forced its Indian guest workers to hand over their tax refunds to the company. Recruiters, too, make their money from the workers, in many cases charging fees to link workers with jobs in the United States.
And while the H-1B program was designed to help recruit skilled workers who bring long-term value to companies, the reality, Costa says, is that “these companies are rotating workers in and out. It’s not a bridge to immigration; they’re not trying to keep and retain these workers.”
Ron Hira, a research associate at the Economic Policy Institute and associate professor of public policy at Howard University, has calculated that only one in fifty H-1B workers is sponsored for a green card. In fiscal 2013, Cognizant got 5,192 H-1Bs and sponsored 152 green card applications; Tata got 6,163 H-1Bs and sponsored exactly zero.
“There really needs to be solidarity between the U.S. workers and immigrant workers. It’s about raising wages for everybody, it’s about combating corporate exploitation of the immigration system.”
The H-1B program hangs on the myth of the skills gap—the notion that there just aren’t enough people in the United States with the proper skills to do high-tech jobs. Thus, the argument goes, U.S. companies must import skilled labor from elsewhere to compete internationally.
The problem, according to everyone who spoke to me for this story, is that it’s just not true. In the case of Disney and Molina, at which U.S. workers were already in the jobs, getting positive performance reviews, it’s blatantly obvious. In other cases, it might be less so, but once again, the guest worker program’s rules allow employers to take advantage.
“There’s an easy way to find out if there are workers available,” Costa says. “Require them to pay the right wage and advertise.” But a company that wants, say, to hire a programmer in New York doesn’t have to advertise at all; it can just get an H-1B worker.
Meanwhile, as Americans are told over and over to get STEM training, a 2014 survey found that 75 percent of U.S. STEM graduates go to work in other fields. “Americans are spending a lot of money to learn how to do those jobs,” says Otto, even if they don’t land in them.
Roepp argues that reforming the guest worker system would prove once and for all whether there is a skills gap. If there really are no current Americans to do the work, he suggests, then rather than making immigrants come in on short-term visas tied to one employer, bring them in and give them full rights—particularly the right to leave their current job and find another.
“My guess,” he says, “is the employer’s response to that is, ‘Once you do that, they’re going to leave, they’re going to find other work.’ So the problem isn’t a labor shortage. It’s a shortage of people who want to do your job at the wages that you want to pay.” Why, Roepp wonders, should the government “allow you to artificially increase the supply of labor so you don’t have to compete with everybody else in the labor market?”
When talking about guest workers and U.S. jobs, particularly the kinds of tech-skilled jobs that are seen as desirable, it can be tempting to slip into language that pits one group of workers against another. But H-1B visa critics say reforming the program would actually benefit both groups of workers.
“There really needs to be solidarity between the U.S. workers and immigrant workers,” Costa says. “It’s about raising wages for everybody, it’s about combating corporate exploitation of the immigration system.”
The Economic Policy Institute has recommended requiring that guest workers be paid in the seventy-fifth percentile for a particular job and no lower than the national average. It has also called for employers to advertise jobs on a central database for thirty days and hire an equally or better-qualified U.S. worker. A reform proposed by Senators Dick Durbin, Democrat of Illinois, and Chuck Grassley, Republican of Iowa, would prohibit larger companies from getting H-1B visas if more than 50 percent of their workforce is made up of guest workers.
And Lederer stresses that workers in legal immigration programs should not face the same problems as undocumented workers.
“We want them to be able to assert their rights on the job, to have a path to citizenship, to be able to live securely with their families,” she says. “If you apply any of those big aspirations to the guest worker system, it falls well short of meeting them, even though it is a legal channel. That is why we really need new models.”
Stuart Zwicke lasted eight years in the information technology department at Molina Healthcare of New Mexico, in Albuquerque, where he watched everyone on his original team let go.
"I did not apply to Molina," he says. "They reached out to me because of my job skills and technical skills. They brought me in to design and build their data center, the heartbeat of the entire company here in New Mexico."
The data center was miles from the company's main headquarters in Long Beach, California, and Zwicke and two others were the only ones working there. Instead of bringing in permanent help, he said, the company would rotate in groups of workers for a week or so at a time, to be trained at the center.
"I would tell my senior management, 'We have a really big problem here,' " Zwicke says. "At the time I was a senior administrator, and these guys didn't have the basic 101 skill set. We did everything we could, we were doing eighty-, ninety-hour weeks and trying to groom them as we went along."
The workers, Zwicke learned, were brought in by a contractor, Cognizant, on H-1B guest worker visas, supposedly issued for workers with specialized skills. But Zwicke says that, in fact, the new workers made his job harder. He'd ask to see the resumes for workers he was training, to gauge their skill levels, but says all he received were assurances that the workers were qualified.
Back in Long Beach, in 2010, eighteen workers in the company's information technology department were laid off. According to attorney James Otto, who filed suit on behalf of those eighteen workers, the company turned around and brought in forty new workers via Cognizant. The employees who'd been let go had made an average of $75,000 a year; the guest workers would be paid much less, and receive no benefits.
"They'd say this is cost-effective, this is the way it is, get with the program or else," says Zwicke, a combat veteran who, in August, after his second heart attack, was also let go. (Otto has filed a discrimination complaint on Zwicke's behalf.)
To Otto, who also represents workers at Disney who were laid off and then required to train their replacements, the process of replacing American workers with H-1B temporary hires through companies like Cognizant is part of the further commodification of labor.
"Disney just doesn't care about people, that's the bottom line, which is funny for Disney because that's the business they're in," Otto says. "Everybody they replaced was highly skilled, highly productive, and highly regarded because each one of them had performance evaluations for several years running that said they were exceptional."
Otto has also filed a lawsuit on behalf of Yelena Kutepova, who worked in the information technology department at the Screen Actors Guild Producers Pension and Health Plans since 1998. As she recalls, "My reviews were excellent, I was very professional." But she was surrounded by guest workers, some of whom would go back home after their visa ended, only to return again and again.
In 2012, Kutepova was diagnosed with breast cancer. At first, she says, she scheduled her medical treatments during her lunch hour so she could still work. When her boss complained about her being late returning from the doctor, she stopped going to treatments. Nevertheless, last summer she was let go. The written reason for her layoff was "to reduce the number of [SAG] employees in the IT Department."
At the same time, a group of her colleagues were also let go. "All of us were over age fifty," she says. Kutepova was two years from retirement. Last she heard, her job was being filled by more guest workers. "After you put in seventeen years, you feel like the place is your family," she says. "I think, 'Why did this happen to me? I didn't do anything wrong.' "
"When they bring in these foreign workers, they don't believe they have rights...what they want, what they demand, is subservience."
The H-1B visa has its origins in the 1990 Immigration Act and was intended, according to Daniel Costa, director of immigration law and policy research at the nonprofit Economic Policy Institute, to bring in workers with specialized skills to complement, not replace, workers already in the United States.
The program has been capped at 65,000 visas per year (the visas normally, though not always, are good for three years), with an additional 20,000 available for workers who've attained advanced degrees at U.S. institutions. But there has been a push in recent years to raise that cap, as technology companies have put together a massive PR and lobbying blitz arguing that there are not enough Americans with the requisite skills in so-called STEM (science, technology, engineering, and math) fields.
That push made the H-1B question a huge--and hugely contentious--part of the 2013 immigration reform negotiations in Congress; the top ten H-1B donors spent $8.2 million on candidates in the prior election cycle. Tech companies, including Microsoft, Facebook, and Google, pushed hard for a hike in the cap, and, Costa says, "basically got almost everything they wanted," though the bill ultimately failed to pass.
The H-1B visa program is supposed to have safeguards against abuse, including rules designed to ensure that guest workers are not a significantly cheaper option for companies looking to save a buck. But Costa says 83 percent of the H-1B recipients are paid wages below the average for that occupation, because of flaws in the system.
"The usual argument from proponents of H-1B expansion is these are the best and brightest workers," Costa says. "Either that's true and they're just being paid really low wages, or they really are entry-level workers whose skills are new and cheap."
Shannon Lederer, director of immigration policy at the AFL-CIO, notes that while the guest worker system is structured into narrow slivers, with different visa qualifications, it's instructive to look at the system as a whole.
"It really does reveal a lot when you see how consistent the patterns of abuse are across wage and skill distinctions," Lederer says. "The abuses that guest workers face really aren't due to the fact that they don't speak English well or aren't well educated; they're baked into the power asymmetries that the work visa programs institutionalize."
Workers who dare to make demands on their employers are often told: If you don't like it, find another job. But guest workers literally cannot do so. Like other guest workers, H-1B workers are tied to the employer who brings them in, and have an added incentive to behave on the job since an H-1B employer can sponsor them for an eventual green card. Their choice is to stay at the job or get on a plane home.
"When they bring in these foreign workers, they don't believe they have rights," says Otto. "Every employer who imports these foreign workers, what they want, what they demand, is subservience."
Jim Roepp, deputy legal director of the Immigrant Justice Project at the Southern Poverty Law Center, notes that this works to the disadvantage of other workers as well. "It's awfully hard for a U.S. worker to compete with somebody who has to work at that employer regardless of what the conditions might be," he says.
Even when H-1B workers aren't much cheaper than U.S. workers, the program still creates conditions ripe for abuse and suffers from inadequate oversight, according to Lederer. "There is no one whose job it is to look across all the visa programs," she says. "Nobody wants to reveal what the total is, because when you add it up it amounts to hundreds of thousands of new, vulnerable workers every year without adequate rights and protections."
The top employers of H-1B workers are all companies like Cognizant, which Otto refers to as "body shops." Like temporary staffing agencies in the United States, these companies do all the work of hiring--including procuring visas--and are the guest workers' legal employer. That way, companies like Disney and Molina can maintain they haven't hired any guest workers; they're just "leasing" them from the staffing agency.
Like the in-country staffing agencies, Lederer says, companies that hire H-1B workers seek a more flexible, disposable workforce. Stuart Zwicke and Yelena Kutepova each suffered serious health problems and asked their employers to allow them time to get healthy; a brand-new young H-1B worker would not seek such accommodation.
Companies can also directly hire H-1B workers, or independent recruiters can help place them, but Lederer says research she's read "shows that the staffing agency model holds the greatest potential for exploitation." In Atlanta, for example, when H-1B public school teachers were hired through a staffing agency, the public contract showed how much the district was paying the agency but, Lederer says, "there was no due diligence by the district to know how much the agency was paying teachers--that's how the distancing obscures responsibility."
Many staffing companies are also outsourcing companies, which bring in workers for what they call "knowledge transfer"--think the Disney workers, training their own replacements--and then send the jobs back overseas with the guest workers, offshoring them permanently.
As with wages, there are rules meant to prevent the kind of displacement charged at Disney and Molina. But Costa says companies that are "H-1B dependent" can get around those rules by hiring H-1B workers with master's degrees, or by paying them more than $60,000. That may sound like a decent wage, but Costa notes it's often at least $20,000 less than the average wage in the technology sector--giving these companies a substantial saving on labor costs.
Companies using H-1B workers have been accused of skirting even the minimal wage requirements. In 2013, the staffing agency Tata agreed to a $29 million settlement in a suit alleging it forced its Indian guest workers to hand over their tax refunds to the company. Recruiters, too, make their money from the workers, in many cases charging fees to link workers with jobs in the United States.
And while the H-1B program was designed to help recruit skilled workers who bring long-term value to companies, the reality, Costa says, is that "these companies are rotating workers in and out. It's not a bridge to immigration; they're not trying to keep and retain these workers."
Ron Hira, a research associate at the Economic Policy Institute and associate professor of public policy at Howard University, has calculated that only one in fifty H-1B workers is sponsored for a green card. In fiscal 2013, Cognizant got 5,192 H-1Bs and sponsored 152 green card applications; Tata got 6,163 H-1Bs and sponsored exactly zero.
"There really needs to be solidarity between the U.S. workers and immigrant workers. It's about raising wages for everybody, it's about combating corporate exploitation of the immigration system."
The H-1B program hangs on the myth of the skills gap--the notion that there just aren't enough people in the United States with the proper skills to do high-tech jobs. Thus, the argument goes, U.S. companies must import skilled labor from elsewhere to compete internationally.
The problem, according to everyone who spoke to me for this story, is that it's just not true. In the case of Disney and Molina, at which U.S. workers were already in the jobs, getting positive performance reviews, it's blatantly obvious. In other cases, it might be less so, but once again, the guest worker program's rules allow employers to take advantage.
"There's an easy way to find out if there are workers available," Costa says. "Require them to pay the right wage and advertise." But a company that wants, say, to hire a programmer in New York doesn't have to advertise at all; it can just get an H-1B worker.
Meanwhile, as Americans are told over and over to get STEM training, a 2014 survey found that 75 percent of U.S. STEM graduates go to work in other fields. "Americans are spending a lot of money to learn how to do those jobs," says Otto, even if they don't land in them.
Roepp argues that reforming the guest worker system would prove once and for all whether there is a skills gap. If there really are no current Americans to do the work, he suggests, then rather than making immigrants come in on short-term visas tied to one employer, bring them in and give them full rights--particularly the right to leave their current job and find another.
"My guess," he says, "is the employer's response to that is, 'Once you do that, they're going to leave, they're going to find other work.' So the problem isn't a labor shortage. It's a shortage of people who want to do your job at the wages that you want to pay." Why, Roepp wonders, should the government "allow you to artificially increase the supply of labor so you don't have to compete with everybody else in the labor market?"
When talking about guest workers and U.S. jobs, particularly the kinds of tech-skilled jobs that are seen as desirable, it can be tempting to slip into language that pits one group of workers against another. But H-1B visa critics say reforming the program would actually benefit both groups of workers.
"There really needs to be solidarity between the U.S. workers and immigrant workers," Costa says. "It's about raising wages for everybody, it's about combating corporate exploitation of the immigration system."
The Economic Policy Institute has recommended requiring that guest workers be paid in the seventy-fifth percentile for a particular job and no lower than the national average. It has also called for employers to advertise jobs on a central database for thirty days and hire an equally or better-qualified U.S. worker. A reform proposed by Senators Dick Durbin, Democrat of Illinois, and Chuck Grassley, Republican of Iowa, would prohibit larger companies from getting H-1B visas if more than 50 percent of their workforce is made up of guest workers.
And Lederer stresses that workers in legal immigration programs should not face the same problems as undocumented workers.
"We want them to be able to assert their rights on the job, to have a path to citizenship, to be able to live securely with their families," she says. "If you apply any of those big aspirations to the guest worker system, it falls well short of meeting them, even though it is a legal channel. That is why we really need new models."
Sarah Jaffe is a reporting fellow at the Nation Institute and the author of a book on social movements since the 2008 financial crisis, out in August 2016 from Nation Books.
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