Date: Mon, 16 Jun 2003 21:20:51 -0700 From: Norm Matloff To: Norm Matloff Subject: TCS lets the cat out of the bag To: age discrimination/H-1B/L-1 e-newsletter At first the enclosed article looks no different than the many I have posted and commented on in this newsletter. But wait! The reporter, deliberately or not, has actually made a major scoop here. Remember, the industry lobbyists have always said that H-1Bs and L-1s are needed because Americans don't have the skills that the foreign workers possess. Now, that is ridiculous on the fact of it, since there are so many cases, often admitted to by the employers, in which the laid-off Americans are forced to train their foreign replacements. But Mr. Godinez has gotten TCS to explain exactly why it is that TCS' H-1Bs and L-1s have knowledge of that Americans do not: TCS software! Here is the key passage: India-based Tata Consultancy Services uses the L-1 visa program to transfer employees to the United States and send them out on consulting projects across the country. The primary reason is that its workers in India are trained in Tata software -- training not available to U.S. workers, said resident manager of personnel Girish Surendran. Now, the non-techie readers of this e-newsletter can already sense something is wrong with this picture, but the techie readers must REALLY be scratching their heads, wondering what the heck this special TCS software could be. After all, TCS' U.S. clients hire TCS to work on all kinds of software projects, typically already in progress, using generic software tools. The most likely explanation is that this special TCS software is not something used as part of the client projects themselves, but rather it is project management software, used to check off whenever various stages of a client project are completed. Recall that TCS and the other major Indian firms claim to be really good at project management, under the CMM criteria (which, as I've explained, is nothing more than a "12-step program" set of homilies, nothing technological), and this special TCS software is probably for this purpose. In other words, not integral to the client project at all, but an ingenious way to freeze out U.S. workers. And of course that is exactly what TCS wants to do, as do Wipro, Infosys, etc. I am enclosing at the end of this message an excerpt from an SEC filing made by Infosys earlier this year. In fulfilling its responsibility to inform stockholders of potential risk factors, Infosys notes: Our reliance on work visas for a significant number of IT professionals makes us particularly vulnerable to [changes in immigration law] and variations as it affects our ability to staff projects with IT professionals who are not citizens of the country where the work is to be performed. I guess there are various ways to spin this remark, but to me it is saying, "Our company's success depends on our ability to bring cheap labor into the U.S. We would not be competitive in that market if we had to hire Americans." I hope the chairs of the computer science departments of the Dallas-area universities and colleges, e.g. UTD, SMU, etc., read this Dallas Morning News article. And when is someone going to finally tell Rep. Mica that his comments could be viewed as racist? He is correct when he criticizes Tata for paying their workers who do projects for Siemens less than the going rate, but not only does he totally let Siemens off the hook, he even has said that he supports Siemens' right to bring in its own workers, say from Siemens' Indian subsidiary. Implicitly he is saying that Siemens wouldn't underpay its own imported Indian workers, whereas TCS (or Wipro, Infosys, etc.) would. The fact is that Siemens is just as culpable as the Indian firms, and both Siemens AND Tata would be able to conduct "business as usual" under his loophole-laden bill. Norm http://jobcenter.dallasnews.com/sharedcontent/careers/workingnews/061503ccCareersTechmain.c47bc5d9.html Controversy surrounds employees on L-1 visas Critics contend U.S. jobs at risk when transferees are outsourced 06/15/2003 By VICTOR GODINEZ Staff Writer / The Dallas Morning News Just as H-1B workers have done, L-1 visa holders are stirring up controversy in the United States. Whereas H-1B visas allow U.S. companies to hire overseas workers specifically for the purpose of filling open jobs in this country, L-1 visas are meant for intra-company transfers and are valid for a maximum of seven years. Although there are legitimate reasons a company would transfer a foreign employee to the United States, critics charge that the program is being abused as a way to cheaply replace American workers. A company that has resources throughout the world might need to bring in its foreign workers for their special expertise, cross-training or management indoctrination. LeEarl Bryant, immediate past president of the Institute of Electrical and Electronics Engineers, says some companies exploit a loophole in the L-1 visa law. "What can be wrong with that?" asked LeEarl Bryant, immediate past president of IEEE-USA, the Institute of Electrical and Electronics Engineers. The problem, Ms. Bryant and others say, is that a loophole in the law allows employers to transfer L-1 workers to the United States and then outsource those workers to other companies. When that happens, American workers are often displaced because L-1 visa holders do not have to be paid wages in line with their U.S. counterparts. "It's even worse [than H-1B abuses] because it's manipulating the system to avoid paying those people prevailing U.S. wages," said Ms. Bryant, who lives in Dallas. "And, of course, it kind of washes the hands of the U.S. employer who has the real work to do. They can say, 'We're not hiring H-1B people. We're hiring temporary workers from company X, who provide this service of software design.' " The government recognizes that loophole as a problem, said Chris Bentley, a spokesman for the Bureau of Citizenship and Immigration Services. The bureau is assessing the L-1 program, and Mr. Bentley said that violations are being investigated. "We certainly do hear about the possible abuses, and the fact that there is an assessment of the visa category would indicate that it's being taken very seriously," he said. Last month, Rep. John Mica, R-Fla., introduced a bill that would close the L-1 outsourcing loophole. His office noted in a news release that in some instances, "American workers have been forced to train their own L-1 replacements or suffer the loss of severance pay." "While we want to help our businesses meet their workforce needs, this proposal will help ensure that Americans are no longer victimized through a legal loophole," Mr. Mica said in the release. Mr. Bentley said the number of L-1 visa holders seems to be tapering off, as is the number of H-1B workers, because of the slow economy. Alcatel SA, the French telecommunications equipment firm with U.S. headquarters in Plano, has used L-1 workers, but only a limited number remain, said company spokesman Brian Murphy. "We had a need for special-skills engineer people," said Mr. Murphy, who added that Alcatel hasn't outsourced its L-1s. "So we had a program called Go USA where employees, mainly from France and other European countries, could come over here and work." India-based Tata Consultancy Services uses the L-1 visa program to transfer employees to the United States and send them out on consulting projects across the country. The primary reason is that its workers in India are trained in Tata software - training not available to U.S. workers, said resident manager of personnel Girish Surendran. "We've got more than 50 research and development centers spread across India in multiple locations," he said. "When they come to the U.S. on this basis, they bring that knowledge with them." Mr. Surendran said Tata complies with the legal requirements of the L-1 program and pays all of its employees the prevailing wage, or more, in each location where they work. He said Tata doesn't track whether its client companies use the L-1s to replace existing staff. E-mail vgodinez@dallasnews.com http://www.sec.gov/Archives/edgar/data/1067491/000089161803000249/f87135fv3.htm#004 As filed with the Securities and Exchange Commission on January 24, 2003 Registration No. 333- __________________________________________________________________________ __________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ Form F-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___________________ Infosys Technologies Limited (Exact name of Registrant as specified in its charter) [much material deleted...] Restrictions on immigration may affect our ability to compete for and provide services to clients in the United States, which could hamper our growth and cause our revenues to decline. The vast majority of our employees are Indian nationals. The ability of our IT professionals to work in the United States, Europe and in other countries depends on the ability to obtain the necessary visas and work permits. As of December 31, 2002, the majority of our IT professionals in the United States held H-1B visas (2,072 persons) or L-1 visas (812 persons). An H-1B visa is a temporary work visa, which allows the employee to remain in the U.S. while he or she remains an employee of the sponsoring firm. The L-1 visa is an intra-company transfer visa, which only allows the employee to remain in the United States temporarily. Although there is no limit to new L-1 petitions, there is a limit to the aggregate number of new H-1B petitions that the U.S. Immigration and Naturalization Service, or INS, may approve in any government fiscal year. Following a temporary increase, the number of available H-1B visas will be reduced to the pre-increase level in the fiscal year beginning October 1, 2003. Further, in response to the recent terrorist attacks in the United States, the INS has increased the level of scrutiny in granting visas. The U.S. immigration laws may also require us to meet certain levels of compensation, and to comply with other legal requirements, as a condition to obtaining or maintaining work visas for our IT professionals working in the United States. For example, our compensation expenses increased by $7.6 million for the nine months ended December 31, 2002 to comply with such requirements. As a result, we may not be able to obtain a sufficient number of visas for our IT professionals or may encounter delays or additional costs in obtaining or maintaining the condition of such visas. Immigration laws in the United States and in other countries are subject to legislative change, as well as to variations in standards of application and enforcement due to political forces and economic conditions. It is difficult to predict the political and economic events that could affect immigration laws, or the restrictive impact they could have on obtaining or monitoring work visas for our IT professionals. Our reliance on work visas for a significant number of IT professionals makes us particularly vulnerable to such changes and variations as it affects our ability to staff projects with IT professionals who are not citizens of the country where the work is to be performed.