The United States Congress is moving forward on a once in a generation
reorganization of the nation’s Immigration laws. The President has
declared this to be a top priority for his new term. The Congress is actively
engaged and there is significant momentum on the issue. The new immigration
legislation is being enacted in the midst of uncertain economic times
in the United States underlined with anemic job and economic growth. It
is important for stakeholders to remain engaged in the debate and to ensure
that their interests are not undermined.
This memo seeks to outline the:
- Broad parameters of the debate as it stands today;
- Process by which the legislation may be enacted;
- Concerns regarding the proposed legislation for users of H and L visas;
- Dangers that the process underway may additionally pose; and
- Manner in which H and L visa users can positively impact the legislation.
A group of eight prominent Senators, four each from the Republican Party
and the Democratic Party, known as the “Gang of Eight” introduced
a Bill S.744 entitled “Border Security, Economic Opportunity, and
Immigration Modernization Act” in the Senate on April 16, 2013.
The Bill will dramatically impact the H-1B and the L Visa programs that
multinational companies, many in the technology industry, rely on. There
has already been several hearings in the Senate Judiciary Committee. The
House of Representatives is set to have hearings and introduce its version
of the Immigration Bill in the near future. It is expected that this Bill
will quickly move through the Senate and the House and be ready for the
President’s signature sometime in the second half of this year.
By way of background, the Senate and House of Representatives will work
independently on their own versions of the Bill; at first in Committee
and then in the full Senate and House. Once passed by both the Senate
and the House, the Bill will have to go through a process called Conference,
where the Senate and the House versions are reconciled. There will then
be a final vote in the Senate and the House, before the Final Bill goes
to the White House for the President’s signature and becomes law.
Additionally, the implementation and the interpretation of the law will
be governed by Final Regulations, which will be issued by the relevant
departments of the U.S. government including the Department of Homeland
Security, Department of Labor and the Department of State.
There are powerful interest groups at play who are trying to impact the
legislation in multiple ways. What seems to be emerging is a seemingly
coordinated effort by some vested quarters to ensure that Business/Corporate
Immigration be re-oriented to only help U.S. companies and put up barriers
to foreign companies that bring in highly skilled, educated and professional
workers to the United States. The severity with which Indian IT companies
have been targeted, has been somewhat surprising.
Areas of Concern with Current Legislation:
The current debate centers principally on the 11 million plus undocumented/illegal
individuals who are currently in the United States. The current proposal
for an amnesty is extremely generous, with these workers having to pay
$500.00 for an Employment Authorization and a $1000.00 fine to get their
Permanent Residence. It is ironic that although 11 million individuals
are being given an amnesty there is no mention of them depressing wages
or “taking away American jobs.”
The only group at this juncture that could emerge as a big loser are companies
that bring in high skilled foreign workers through the H and L visa programs.
The target of the legislation, now on the Hill, seems to be squarely the
Indian information technology (“IT”) companies, with Tata
Consultancy Services, Wipro, Infosys and Cognizant being frequently mentioned
by name. The draconian measures now proposed, include:
- Curtailing the ability of these companies from engaging on client projects;
- Limiting the number of employees such companies can sponsor; and
- Increasing manifold the fees for processing these employment visas.
These measures are Anti-Trade, Punitive and go against the stated goals
of lawmakers to attract highly educated, highly skilled workers from around
Although the Senate version of the Bill leaves a loophole for H-1B dependent
companies to escape the “dependency clause” by applying for
Permanent Residency for its employees, there is concern that as the legislative
process evolves, the legislation may become more restrictive and punitive.
Other Issues of Potential Concern:
There is significant rush to have this Immigration Reform Bill passed.
Consequently, one of the major worries is that the legislation will be
enacted without all the ramifications of the Bill being taken into full
cognizance. There is also a significant lack of involvement in the legislative
process by some of the stakeholders who will be most affected by the Bill.
At hearings on Capitol Hill last week, there wasn’t any effective
representation from the IT industry who are the major users of the L and
H visas. In fact, there were several professors, who appeared as subject
matter experts, and testified that even further stringent restrictions
should be placed on the H and L visa categories.
A matter of critical concern is that in the midst of this derogatory sentiment
that exists in Washington for H and L visa users, more draconian measures
are reflexively enacted without due consideration.
A lot of the information that the Senate heard at this hearing was either
incorrect or dated. For example, the basic line of attack was this: H
and L Visa holders get paid below median wage; they learn the work that
is being done by Americans and then outsource these jobs abroad. There
was no mention of the fact that most of these employees are well educated;
have relevant job experience; create jobs and economic activity in the
communities in which they live; and contribute to U.S. Social Security
and other taxed but do not derive any benefit from this. Also missing
in the debate was the fact that these high skilled workers are necessary
for top American companies to support critical technology infrastructure;
assist in the introduction new product lines and services; and maintain
their technological advantage vis-à-vis the rest of the world.
Additionally, in most cases these workers are paid above median wages.
Another area of concern was that although many stakeholders in the debate
including IBM, Microsoft, ExxonMobil, Wal-Mart, Target and other such
companies maintain strong Government Affairs Bureaus in Washington, they
did not contribute anything positive about the IT companies from which
they draw some of their critical resources. In fact, Chris Padilla, of
IBM, stated that some restrictions on the use of employment visas may
not be a bad thing. These companies represent a rich reservoir from which
to draw critical support. Outreach to these companies will be an important
element in trying to reverse the negative sentiment that currently exists
and which seems to be unfortunately getting more hardened.
Most of the media coverage has been fairly hostile to the users of H and
L visas. A search the web will show fairly limited mention of employment
visas but each one is negative about H and L visa users. There is a complete
lack of messaging and input from those who are the principal users of
the H and L visas. With emotions running high on all sides, the continual
drumbeat of professional jobs being outsourced is finding resonance and
this view point needs to be countered in a serious manner.
Where the Legislative Process Stands:
The legislative process for the Immigration Bill has been somewhat ad-hoc
and that is partly due to the fact that the Senate is majority Democratic
and the House of Representatives is majority Republican. The Senate side,
with input from the White House, has been the primary mover of the legislation
with the introduction of Senate Bill S.744. The Bill has met with significant
support from a broad spectrum of stakeholders, including many to the right
of the political spectrum. One of the principals of the bill, Senator
Marco Rubio of Florida, is considered to be a leading candidate for President
from the Republican Party. Our contacts on Capitol Hill inform us that
the Gang of Eight Senators seem to be committed to the Bill. They have
taken political risks and expended political capital to sculpt this bill
and are generally not disposed to hearing about any potential flaws or
enact any changes. Consequently, the ability to impact legislation on
the Senate side is going to be limited if non-existent at this time.
The reception of the Bill on the House side has been somewhat different.
The House seems to want to enact Immigration reform through multiple pieces
of legislation. However, this approach has met with widespread resistance
and the House may have to yield work on Immigration reform as a whole.
The House Judiciary committee will be where much of the work on the Immigration
bill will take place.
There is no consensus on the issue on the House side and the Republican
Party Representatives are deeply divided over this issue. There are some
who suggest that a minority of Republicans can join with Democrats to
form a majority and pass the legislation. In that case the House Bill
will largely reflect the Senate version of the Bill. It may be noted that
House Democrats are known to be particularly hostile to H and L visa users
and consequently this outcome may be the worst of all options.
How to Positively Impact the Legislation:
Although there have been earlier attempts at Immigration Reform, the introduction
of Senate Bill S.744 represents the most serious attempt on this issue
in recent years. If passed, this law will most likely stand as the law
of the United States for several decades and there will be very little
possibility of changing it in the future. Immigration has become a political
minefield which most politicians will want to avoid.
It is critical for stakeholders to ensure that they have an ability to
impact the legislation in a positive way. It is still possible to have
a strong input on this process and shape the final legislation. It is
important to access the legislators, their aides and the decision formers
in Washington. A potential engagement in the process can be built on five pillars:
Trade: Working with a team of Trade Specialists who are able to impact the manner
in which the legislation in written and also have access to decision makers
on Capitol Hill and the Administration. The H and L visas limitations
will have an impact on Trade and the restrictive language of S.744 may
already run in contravention to existing U.S. commitments on Trade. This
team of trade specialists should be the foundation of any effort to impact
the legislation and should have the ability to coordinate the efforts
of the various stake-holders and vested parties. Business Immigration
is an important plank of Trade and the U.S. government which promotes
free trade cannot be seen to contravene its own pronouncements. Fashioning
Business Immigration in Trade terms may also find support among Free-Trade
proponents in Congress.
Economic Data: Appointing a respected economic Think-Tank which could do economic analysis
and provide solid economic data – on the positive impact of educated,
high skilled workers on the American economy and the strong value proposition
that IT and other high technology companies represent. This will also
take into account the multiplier effect of economic activity created by
the high paid employees who come on short term assignment to the United States.
Lobbying: Working with an effective lobbying organization which will be able to
provide access to the Legislators, Administration officials and critical
Aides who write the legislation. This is a critical component in being
able to impact how the Legislation is written. Opponents of employment
based immigration, including some Labor Unions are actively campaigning
for harsher treatment of such visas.
Public Relations: At this time, there is a severely negative representation of the impact
of the H and L visas. This representation of jobs being outsourced and
American workers being replaced has not been effectively challenged. The
fact that many of these high skilled workers are helping American companies
manage critical functions have not been mentioned. A fact based approach
that brings out pertinent information and debunks emotionally charged
invective will be important.
Coalition Building: The Immigration reform process will reshape American society and change
the trajectory of immigration to the United States. As this process unfolds
it will be important to align with like-minded forces. It will be important
to reach out to companies like Oracle, IBM, Apple, Wal-Mart et al. that
represent the core of American industry and use highly educated, high
skilled professional workers to manage critical functions and operations.
In a collaborative world, these companies will be directly and negatively
impacted, if they are unable to access the skills and professionals of
their IT partners. It will be important to be able to access the right
individuals in these organizations and seek their support.
An important impetus for Immigration reform is the stated goal of the President,
the Administration and the Congress, to enact Immigration laws to stop
illegal immigration and instead attract highly skilled professionals;
particularly those with Science, Technology, Engineering and Math backgrounds.
In fact, on this issue there is unanimity. However, S.744 does exactly
the opposite. There should be better representation of the way IT companies
contribute to America by in-sourcing jobs; offering U.S. companies hard
to find skills on an as-needed basis and creating a strong economic multiplier
effect on the U.S. economy. The facts and economic rationale are on the
side of those this legislation most adversely effects. This provides the
stakeholders a possible path to re-orient the current debate and legislation
in a way that benefits, rather than threatens, companies which are currently
in the cross-hairs of this process. But time is of the essence and the
window to impact the legislation in closing fast.