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Having Trouble Keeping Track of Our Most Abused Temp Worker Visas? Here are Two More.


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Tech companies are pushing the Obama administration to include the expansion of L-1 and F-1 Optional Practical Training (OPT) visa programs as part of the president’s proposed series of executive orders concerning immigration.  The two programs are subject to very little regulation and have received hardly any scrutiny despite being used to employ hundreds of thousands of foreign tech workers on U.S. soil.  Unlike H-1B and H-2B visas, which have seen some oversight thanks in part to labor representatives’ efforts, L-1 and F-1 have no annual limit and do not require any type of prevailing wage to be paid.  

Daniel Costa, director of immigration law and policy research for the Economic Policy Institute (EPI), recently explained how the L-1 visa program is being abused in a piece for The Hill.

Multinational companies use the L-1 visa to transfer employees from their foreign offices to offices in the United States. Over the past five years, an average of 68,000 L-1 visas have been issued per year, but there is no annual limit. There are two types: the L-1A for managers or executives (valid for seven years), and the L-1B for employees that have qualifying “specialized knowledge” (valid for five years). According to government audits, the majority of L-1 workers are in occupations related to computers and information technology (IT), and the biggest users of the L-1 are also the biggest users of the H-1B — outsourcing tech firms like Tata, Cognizant and Infosys — firms whose business model focuses on sending jobs overseas.

While multinational companies need flexibility to move key employees to the United States, employers take advantage of inadequate regulatory guidance, oversight and enforcement of the L-1 visa. The media have reported on major companies laying off U.S. tech workers and replacing them with L-1s (legally), after first forcing the U.S. workers to train their own replacements. And there is no requirement that employers pay L-1s the prevailing wage for the specific job they will fill, which allows employers to pay far below the market rate. This practice takes advantage of the foreign worker and hurts U.S. workers by pushing down wages for everyone employed in similar occupations.

The L-1 visa program was recently exploited by Fremont, California company Electronics for Imaging (EFI), which brought in Indian workers for a project and paid them at a wage level equivalent to that of their home country.  A Department of Labor investigation found those unmonitored L-1 wages were the lowest the agency had ever encountered with many of the workers receiving $1.21 an hour for 120-hour work weeks.  EFI eventually paid a stunningly paltry fine of $3,500.  

Such instances drive down American wages in regions where L-1 workers are being used.  The average worker who installs or repairs computers in Fremont earns $19 an hour and if the worker configures the network they earn closer to $45.  Yet foreign workers were allowed to come in and take these jobs at $1.21 an hour.  It is difficult to imagine a scenario in which this is a positive contribution to the American worker economy.

The other visa program tech companies are pushing for expansion of is the F-1 OPT program which allows foreign graduates of U.S. universities to gain experience in their field for up to one year after graduation.  If their degree is in a STEM field they can be authorized to stay for up to 29 months.  For the past five years the government has approved an average of over 100,000 OPT workers per year, accepting these visa applications at a rate of 96 percent.  

As Costa explains, the OPT is also rife with corruption and abuse do to its lack of regulation:

OPT rivals the H-1B program in size but has no protections for college- and STEM-educated U.S. workers, such as a requirement that employers demonstrate no qualified U.S. worker was available for the job or a prevailing wage rule. As a result, OPT workers are much cheaper to employ than an American. OPT workers don’t even have to be paid the minimum wage — they can work without pay if classified as interns or be paid a “stipend” — and employers aren’t required to pay unemployment, Medicare or Social Security taxes for them. That’s probably why tech wants Obama to extend the duration of OPT.

OPT’s legality is questionable because the regulations that create it are arguably inconsistent with the F-1 visa statute. The only clear statutory authority that’s existed for an OPT-like program was a three-year pilot program created in 1990 that allowed foreign graduates to work in fields unrelated to their degree. That pilot program required employers to pay a prevailing wage and recruit U.S. workers for 60 days. It also mandated a report to Congress on the program’s impact: then-Immigration and Naturalization Service Commissioner Doris Meissner and Labor Secretary Robert Reich’s 1994 report advised Congress not to extend the pilot program because it “is inconsistent with the statutory intent of the F-1 nonimmigrant visa,” “run[s] counter … to an affirmative policy of U.S. labor force development,” and “may have adverse consequences for some U.S. workers.” Congress never renewed the pilot.

OPT differs from the pilot program in that each job must be related to the graduate’s degree, but the report’s findings nevertheless apply to OPT. Why? The Government Accountability Office (GAO)warns that basic data collection in OPT is so bad that Immigration and Customs Enforcement (ICE) “cannot determine whether students with employment authorization are working in jobs related to their studies and not exceeding regulatory limits on unemployment.” Since ICE doesn’t know if the job requirement is being complied with, it’s unlikely a distinction that makes a difference. Moreover, OPT is missing the basic worker protections the pilot program included.

President Obama must act very cautiously with respect to tech company requests for the expansion of programs which have not presented any demonstrable positive effect on U.S. wages or the job market as a whole. Whereas construction unions have battled to keep visas such as the H-2B from becoming recklessly plentiful and thus depressing wages and growth opportunities for American workers, the L-1 and F-1 visa programs have flown under the radar and over the line. To avoid further exploitation, the low-paying companies who utilize these temporary workers must face checks and balances, namely minimum and prevailing wage mandates.


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