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India Is Pissed About the US Now Charging More Money for Guest Worker Visas

Americans in Silicon Valley who have lost their jobs to Indian workers say new fees are the least the US can do to stop companies from importing foreigners.
Chairman and CEO, HCL Infosystems Ltd. Ajay Chowdhry, holds a newly launched ‘MiLeap’ during an event in New Delhi, India, 15 January 2008. (Money Sharma/EPA)

The annual gold rush in Silicon Valley to fill out applications for guest worker visas began Friday, as the federal government began distributing some of the 85,000 H1B visas it is authorized to issue this year.

But the dash to grab visas is set against the backdrop of a political debate both within the United States and abroad about the regulations surrounding H1B visas, the government designation for visas designed for highly-skilled employees in "specialty occupations."


Just weeks ago, India filed a complaint with the World Trade Organization over an increase in fees on H1B visasthat the US imposed on companies with workforces comprised of more than 50 percent foreign workers. A provision included in last year's federal spending bill tacked on a new $4,000 fee the H1B visas, which India argues is discriminatory to the country under its trade agreement with the US.

India's complaint comes as Congress has been mulling other reforms to the H1B program to address allegations that companies are using the visas to hire cheaper foreign workers to replace American workers. The Senate Judiciary Committee held hearings earlier this year in which senators, including Ted Cruz and chairman Jeff Sessions, probed experts on whether US tech firms really needed more H1B visas to fill open positions, as they claim, and what protections might be put in place to ensure that American workers are being given preference for positions over foreign workers.

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"The intent of the program is to fill skills gaps in the US when American workers aren't available, but the reality is that the program has become a way for firms to create a business model that's about bringing workers who are cheaper into the US and to either substitute or directly replace Americans," said Ron Hira, a political science professor at Howard University, who testified at the hearing on February 25.


Hira said that foreign workers make anywhere from 20 percent to 40 percent less than their American counterparts within the program.

Two recent lawsuits accused companies, including Disney, HCL, and Cognizant, of firing Americans in order to hire H1B workers for less money. Leo Perrera, a former Disney employee who brought one of the suits, testified at the Judiciary hearing in February that "20 years of hard work, a bachelor's degree in information technology and an IT job for Disney were all over when my team along with hundreds of others were displaced by a less-skilled foreign workforce imported into our country using the H1B visa program."

The debate over whether the H1B program is hurting American workers rose to public consciousness amid the Republican primary debates earlier this year. Donald Trump said in one debate he supported expanding the H1B visas in one instance, but later said the system was "rampant with abuse." Ted Cruz has introduced a bill in the Senate that proposes some reforms to the programs, including minimum salary requirements for foreign workers, while Bernie Sanders has called for changes to the program. Hillary Clinton has, in the past, called for an expansion of the H1B program.

Cruz's bill is one of three bills proposing reforms to the H1B program currently in Congress. A bill proposed by Senator Chuck Grassley and Senator Dick Durbin would put in place a requirement that companies first seek American workers to fill open roles before applying to have them filled with foreign workers and would limit how many H1B workers a company could hire, while a proposal by Sessions and Senator Bill Nelson seeks to cut the number of H1B visas allocated each year.


There is also one bill, the Immigration Innovation Act of 2015, seeking to expand the number of H1b visas given out each year that has the support of tech industry leaders, including Facebook.

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Of the bills in Congress that could result in reforms, few have a chance of going anywhere, Hira and Costa said.

"The fact that nothing has happened from all these abuses [of the program] shows how bad the abuses are and how important it is for the business community when something that is obviously so blatant, replacing labor with cheaper labor, leads to no action in Congress," Costa said. "I think it's probably a tough road ahead."

As legislators debate whether to act on any of them, India hopes to give them pause with its complaint to the WTO, Hira said.

"The complaint is about the fees but it's such a small amount, but their concern is that other fixes might be coming down the pike, so they're making a big deal out of the fees," Hira said.

Daniel Costa, Director of Immigration Law and Policy Research at the Economic Policy Institute, pointed out that India was also upset last time Congress imposed fees on the guest worker program in 2010, but nothing came of the country's complaint.

"I don't think they have much of a case, and they probably know they don't have much of a case, but it's sort of more symbolic to try to threaten and keep American legislators from passing any reforms on the program," Costa said.


The Indian firms that rely on the H1B visa program in the US are "the shining star" of the Indian economy, and the country's largest export, Hira said. The government and firms that rely on the program are trying to "build up a firewall so that no other reforms can come through and constrain the program in any way."

India's complaint is that the fees tacked onto the program are discriminatory to India under trade agreements. The country's prime minister has also raised the issue with President Obama, Hira said.

"I don't think they have a strong case," Hira sad.

The applications filed with US Citizenship and Immigration Services are expected to exhaust the available visas within a matter of days, according to the Wall Street Journal. More than 230,000 applications were filed in the first week of April last year, according to the report.

Follow Colleen Curry on Twitter: @currycolleen