Why Tech Employers Hate Congress' New Immigration Reform Bill

Technology Staff Editor
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As momma says, be careful what you wish for. For several years, tech employers -- including giants like Microsoft and Oracle -- have been lobbying Congress to raise the cap on H-1B visas, the most common visa used to hire foreign technology workers for jobs in the U.S. So, you'd think that a compromise immigration reform bill hammered out between a bi-partisan group of Senators and the White House that includes provisions for raising the cap would be a wish-come-true for tech employers. Think again. "This bill could be well be worse than the status quo we have now, and that says a lot," says Jack Krumholtz, Microsoft managing director of federal government affairs. That's because while the comprehensive and controversial immigration reform bill proposes to raise the H-1B visa cap from the current annual 65,000 to 115,000 (and up to a max of 180,000), the legislation is missing key elements that have been proposed in other bills, while having restrictive provisions and fine print that tech employers say will handcuff their ability to hire the talent they need and to compete globally. If (and that's a big if) the immigration bill ends gets signed into law with the H-1B provisions that are drafted into it now, "it will make the program unworkable moving forward," says Krumholz. As the bill is debated this week in Congress, as well as in American HR departments and lunchrooms -- that sentiment is echoed by Robert Hoffman, VP of government affairs at Oracle and co-chair of Compete America, a coalition of technology companies that has been pushing for visa and green card reform for years. What is bugging tech employers about the bill? For starters, last year the Senate passed a bill that would've raised the H-1B cap to 115,000 -- but also exempted from any cap foreign students who earn advanced degrees from U.S. universities. Under current laws, 20,000 of these students can be afforded H-1B visas each year, in addition to the general pool of 65,000 H-1Bs. The proposals approved last year by the Senate -- but lacking in the current immigration reform bill -- would've done away with any cap for those students, plus added another allotment of 20,000 visas for foreign students who have advanced degrees in science, technology, engineering, and math (or STEM) from foreign schools. Microsoft, Oracle, and others say they've had to turn away fresh talent -- like those graduating from U.S. school right now -- because the H-1B visa cap for fiscal 2008 (which starts Oct. 1) was filled for the 65,000 visas on the first day (in April) that the U.S. accepted the visa petitions, and the cap on the 20,000 advanced degree visas was hit about a month later. In fact, on April 2 and April 3, employers filed to U.S. Citizenship and Immigration Services nearly 120,000 petitions for the 65,000 fiscal 2008 H-1B visa allotment -- which also would be more than enough to fill the 115,000 H-1B slots proposed in the latest version of comprehensive immigration reform. Also, tech employers aren't pleased about one of the most dramatic shifts proposed by the reform bill. That is a move towards a merit-point system, where individuals can independently apply for green cards or permanent U.S. residency that would be awarded according to the total points they'd earn based on skill set, education, and occupation, and, to a lesser extent, family ties and other considerations. Last week, when word spread of a compromise between the White House and the group of Senators, the bill appeared to shift U.S. immigration tradition, in which family ties mattered significantly, to a heightened employer-based system focused on the new point system. However, tech employers say the point system takes control away from businesses because employers would no longer sponsor green-card applications for specific individuals they want to hire. "The point system is built on top of a scarcity of green cards, and then shifts personnel decisions into the hands of bureaucrats and away from employers," says Hoffman. Although individuals who have advanced degrees in areas like STEM -- or have skills in demanded occupational fields like STEM -- could potentially earn more points than green-card applicants with fewer demanded skills and less education, tech employers say the point system would create a free-for-all, with "low skills and high skills" competing for the same backlog of green cards. "This would leave our ability up to chance" as an employer in planning hiring, says Krumholtz.

What else irks tech employers? Lots. Under current laws, only companies that have more than 15% of their workforce on H-1B visas -- so called "H-1B dependent" firms -- are held under certain rules and restrictions. But under the new proposals, some restrictions are expanded and cover all H-1B employers, regardless of how dependent they are on H-1B workers for their U.S. workforce. So, companies like Microsoft would be held to the same scrutiny as Indian firms, like Wipro or Infosys, whose U.S. workforces currently are made up mostly by H-1B visa-holders, many who allegedly stay in the U.S. for only short training stints that lead to the offshoring of work by U.S. customers. A Microsoft spokeswoman admits that one-third of the company's U.S. workforce is on "visa assistance or green cards." However 90% of Microsoft's H-1B workers seek permanent residency in the U.S., according to Krumholtz. Microsoft won't disclose the specific percentage of its U.S. workforce on H-1B visas, or whether Microsoft is an "H-1B dependent" firm that has 15% or more of its U.S. workforce on H-1B visas. "The proposals would apply restrictions to any employer that wants to hire H-1B workers," says Krumholtz. "If there's abuse or fraud, let's go over that, let's target those actions to employers abusing the system or engaging in fraud," he says. "Why apply those restrictions to legitimate employers?" he says. The new proposals require all H-1B employers to attest that no U.S. worker was displaced from a job six months prior or after an H-1B worker was hired. That rule creates big hurdles for "legitimate" employers in terms of flexibility of its workforce and global competitiveness, says Krumholtz. Oracle's Hoffman says he thinks the provisions "are a huge requirement that might violate international trade laws." It hinders companies from responding to changes in the economy-- for instance if an H-1B worker in a specific job was hired a few months before an economic downturn, would that inhibit a company from downsizing or layoffs of its American workforce, asks Hoffman. "That's a heavy burden on the H-1B program," he says. "That change and other enforcement could make H-1B [hires] too costly," driving U.S. firms to do exactly what Americans don't want to happen -- move work offshore because it's less costly, says Hoffman. Other restrictions proposed include the requirement that an H-1B visa applicant's educational degree match up with the job. So, for instance, an individual applying for a U.S.-based job as a software engineer would need a software engineering degree. "What if that person has a PhD in mathematics?" asks Krumholtz, indicating that would be prohibited. As for the proposed point system, a few other countries, including Canada, Australia, and most recently the U.K. have adopted point systems. However, in the case of Australia, for instance, there is a dual-track system that includes employer-sponsored immigration. That dual-track is missing from the U.S. proposals, and that could ultimately drive talented applications to seek employment in other countries in which it's easier to obtain work visas or permanent status. "The biggest winners in this are Australia, Canada, France" and other countries that are making immigration easier, not harder for the highly skilled, highly educated, he says. Multinational companies like Oracle will be less affected, since an applicant that can't make it to the U.S. could take a job with Oracle's other global operations, Hoffman says. However, those new restrictions will make it harder for promising American startups to hire foreign tech talent in the U.S., he says. While tech employers aren't happy with the bill because of the restrictions it places on H-1B hiring and the proposed green card point system, opponents to the H-1B program aren't thrilled about the bill either. "As 'comprehensive immigration reform,' it is a total joke," said John Miano, founder of U.S. tech professional advocacy group Programmers Guild in an e-mail interview with InformationWeek. "The bill doesn't please anyone. Does not solve the problem it is addressing," he says. This story was modified on May 24 to reflect new info from Microsoft regarding its U.S. visa and green card workforce.


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