Date: Fri, 13 Feb 2004 16:02:54 -0800 From: Norm Matloff Subject: Tata etc. deny abuse To: H-1B/L-1/offshoring e-newsletter Indian software companies deny abusing visas By K.C. Krishnadas EE Times, February 13, 2004 http://www.eetimes.com/sys/news/OEG20040213S0012 BANGALORE, India -­ India's three leading software services organizations denied accusations they had misused the L-1 visa program to bring cheap Indian software engineers into the United States and take over American jobs. Tata Consultancy Services, Wipro Technologies and Infosys Technologies Ltd. each denied accusations by the AFL-CIO, the largest U.S. labor federation, that they misused the program. The latest controversy over outsourcing started when Michael W. Gildea, executive director for the department for professional employees, AFL-CIO, told the House International Relations Committee earlier this month that the Indian outsourcing firms were acting as "body shops." Gildea accused the companies of bringing Indian workers into the United States through the L-1 visa program and later subcontracting them out to other businesses. The L-1 visa program lets a company transfer workers with specialized skills from a foreign office to a U.S.-based office, subsidiary or affiliate for a limited time. Gildea said Tata, Wipro and Infosys have had a troubled history under the H-1B temporary visa program. "Yet these firms are now among the biggest users of the L-1 program, supplying Indian IT talent to a who's who of the Fortune 500 corporations," he said. Once the overseas workers were acquainted with the work and sometimes after receiving training from U.S. workers, as much of their work as technically feasible was carted off to India, Gildea said. Dan Stein, executive director for American Immigration Reform, told the House committee that the cause of the trouble was a provision of the L-1 that differed from other temporary employment visa programs in that L-1 visa holders need not maintain a legal intent to return home. This provision, he said, makes it easier for the holders to petition for permanent resident status “and makes something of a mockery of the idea that this is a temporary visa program.” Stein cited articles in business publications stating that Siemens had laid off high-tech workers in Florida and replaced them with overseas workers supplied by Tata Consultancy Services (TCS) working on L-1 visas. The new workers were paid only a third of what the laid-off workers were being paid, according to Stein. The accusations touched a raw nerve at India's top software export service providers. India's National Association of Software and Service Companies (Nasscom) said India accounted for only 15,000 L-1 visas as of March 2003, but the accusations drew a response from each of the three companies named by Gildea. "We operate within the laws. Therefore, there is no question of visa misuse," said Atul Takle, vice president of corporate communications for TCS. "We are primarily a H-1B visa-dependent company, with 65 to 70 percent of our employees in the U.S. holding H-1B visas," a statement from Infosys said. "L-1 visa regulations stipulate that only employees with specialized knowledge or holding managerial/executive positions can file an application. Infosys adheres to this regulation and more importantly, does not differentiate between H-1 and L-1 pay scales, although not legally mandated." Nandan Nilekani, president and CEO of Infosys, said, "We fully comply with visa statutes and regulations in letter and in spirit. Infosys continues to work with the governments and consulates of the countries in which it operates in order to ensure that it fully understands and correctly interprets the immigration regulations." Wipro said, "We believe we are in total compliance with the requirement of the law relating to visas. Hence the question of abuse of any type does not arise." This latest controversy over outsourcing, the concern of American workers for their jobs and the upcoming U.S. presidential election have fueled speculation here that some restrictions may be imposed on outsourcing. These fears come on the heels of the cancellation of an outsourcing contract by the State of Indiana to TCS last November. The fear factor was raised by a bill introduced in the U.S. Senate last month seeking to restrict outsourcing of work by the U.S. government. While such federal government work contracts make up just 2 percent of India's software and service exports and is thus not a major cause for concern, the combination of these resistances to outsourcing are causing some worry in India's software exports industry.