High Tech's Passport to Nowhere

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Thursday, September 21, 2000

High Tech's Passport to Nowhere Lured to U.S. jobs with special visas, immigrants often face substandard pay and uncertain status. Now their lot may get worse.

By JOSEPH MENN, Times Staff Writer

ROBERT DURELL / Los Angeles Times SAN RAMON, Calif.--Jericho Ponce leaped at the chance three years ago to travel 6,000 miles for a modest technology job here that provided more money for his mother, grandmother and brothers back in the Philippines. "To get an opportunity to work in the States--everybody dreams of that," said Ponce, who is one of more than half a million immigrant workers lured to the United States over the last decade by technology companies.

But many of the companies that sponsor immigrants such as Ponce through a work-visa program pay substandard wages and have neither the intention nor the ability to see that they stay in America. Ponce is simply part of a growing supply of cheap, disposable labor for the talent-hungry high-tech industry. There is no government agency looking out for them. And now Congress is on the brink of making their lot dramatically worse by increasing the number of imported temporary workers while keeping a lid on grants of permanent residency. The Senate voted 97 to 1 on Tuesday to move toward consideration of such a bill. Ponce, a 28-year-old software consultant, was admitted under the H-1B work-visa program, which is "already strained beyond its capacity," Georgetown University professor Lindsay Lowell wrote in a study this year. If Congress again raises the cap on H-1B visas, growing numbers of foreign workers "who had thought they could stay legally will be unable to do so," Lowell said. The result is a population of immigration supplicants working alongside American citizens, often with the same responsibilities but for lower pay and with far fewer rights. Because the imported workers--mostly from India, China and the Philippines--are at the mercy of the company that sponsored their visa, most of them are afraid to speak up when treated poorly or even illegally, as many are. "There are really powerful reasons for H-1B folks not to complain," said John Fraser, deputy administrator of the Labor Department's wage and hour division. "They are dependent on their employer to live and work in the U.S., and they are dependent on their employer if they want to live permanently in the U.S." The problem is most acute in Silicon Valley. Three of this year's five largest sponsors of H-1B visas are located in the sprawl between San Francisco and San Jose: Oracle Corp., Cisco Systems Inc. and Intel Corp. All three companies say they would prefer to hire U.S. workers but cannot find the talent. "We really intend to make these people long-term hires," said Tracy Koon, Intel's director of corporate affairs. But some of Intel's H-1B workers, like those at almost every other company, run out of time and must leave the country. The visa program was created in 1952 to allow a few foreign experts to work in the U.S. for brief periods. After operating quietly for decades, the program exploded in 1990 after Congress gave in to requests from industry to allow visa holders to seek permission to stay in this country permanently. An H-1B visa allows its holder to live in the U.S. for up to six years while working at the same job for the same company. The worker is supposed to be paid the "prevailing wage" for the job. Beyond that, the requirements are light: Employers are required to give Americans a chance to apply for the jobs, but there does not have to be a shortage of U.S. workers or any preference for hiring them. Unlike migrant farm workers, who are admitted seasonally under a different program, most H-1Bs are limited to workers in "specialty occupations" who have relevant knowledge and college degrees. High-tech jobs now account for about 60% of H-1B visas issued. The majority of H-1B holders also are seeking so-called green cards, the documents that allow permanent U.S. residency. And therein lies the problem. The Labor Department and the Immigration and Naturalization Service issued a record 115,000 H-1B visas this fiscal year, an allotment that was filled in just six months. The INS can grant 140,000 employment-based green cards annually. But the backlog of applications for green cards stands at more than a million. That backlog and per-country quotas on green cards have driven the time it takes the INS to process a green card application from about two years in the mid-1990s to as long as five years today. Further complicating matters is a rule that if a visa holder loses or changes jobs, the green card application process must begin anew. That means an H-1B worker must bet on one company or face the likelihood of being unable to obtain permanent-worker status within the six years allotted under the program. The Labor Department acknowledges it is doing little to help the plight of these workers. A 1996 report by the department's inspector general found that 19% of the visa holders were not being paid the salaries they were promised. But there is no law prohibiting false promises made in recruiting overseas, the agency's Fraser said. "That's the central recruitment tactic: 'Come to the U.S., make a lot of bucks, and you'll be able to stay,' " he said. Employers are not required to submit any supporting evidence on comparable wages. The department is charged with investigating only "obvious inaccuracies." In practice, that means the government acts only in the rare instance when an employee complains. The number of cases has risen to 120 through the first nine months of the current fiscal year from about 50 all of the previous year. The Labor Department's inspector general concluded that the H-1B program "does not always meet urgent, short-term demand for highly skilled, unique individuals who are not available in the domestic work force. Instead, it serves as a probationary tryout employment program for illegal aliens, foreign students and foreign visitors to determine if they will be sponsored for permanent status." The high-tech industry says it hires workers from overseas because of a dire shortage of qualified Americans, particularly in Silicon Valley, where unemployment has hovered around 2% for the last few years. Companies say they want to hire Americans, in part because of higher training and legal costs for foreigners. "If we can hire a U.S. worker, we prefer to do that, because it is less expensive and because it's very much faster," said Mary Dee Beall, government affairs manager at Hewlett-Packard Inc., which took on as many as 175 new H-1B visa holders last year. But a manager at a Cincinnati company, writing anonymously in a recent online discussion, said that the issue "has nothing to do with availability" and everything to do with cost. He said his firm pays an American consultant working at Oracle $150 an hour, but only $70 an hour for an Indian consultant doing the same type of work. The issue has attracted less attention than it otherwise might because most H-1B workers avoid talking about their jobs or immigration problems, relying--as they must--on their employers' good will. Ponce was one of them. Things had been tight for his family in Manila since his father abandoned them in 1991. His mother's main income came from renting out rooms. After answering a Manila newspaper ad and meeting with a recruiter, Ponce quit his $6-an-hour computer teaching job and moved to the U.S. to take a $42,000-a-year post with Global Resources Inc., a San Ramon firm that supplies temporary tech workers mainly to Bay Area companies. He worked for Global Resources clients in Oregon and California on software quality-assurance projects, sending home much of his salary. He believed that getting a green card was only a matter of time, and he built friendships and fell in love. But Global struggled to place all of its mostly Filipino staff, many of whom had backgrounds in outdated mainframe computing systems. Ponce was among the employees kept on salary for months even though he had no assignment. Finally, he got a message informing him that he had been terminated. Three dozen H-1B workers have been let go by Global in the last few years, while about two dozen have received green cards. Nancy Powell, assistant general counsel of Cotelligent Inc., a San Francisco company that bought Global in 1998, said the company is now doing better with the INS. Former company officials "should never have said, 'We'll get you a green card in two to three years,' " she said. In the East Bay town of Dublin, seven Filipino employees from Global and another firm share a three-bedroom apartment, eating traditional noodle dishes and speaking their native Tagalog. After one round of Global layoffs, a dozen men and women were staying there, most in sleeping bags. Among them were Global workers who had to leave the country when their visas expired. One colleague of Ponce's moved to the Midwest on an assignment and was fired two weeks later. "We kind of take care of each other," said one of the Dublin residents, who asked not to be identified. California law prohibits using false job promises to induce people to move from elsewhere or even within the state. But there is no state enforcement and private lawsuits under the provisions, with little potential payoff, are hard to wage. More common are lawsuits in the opposite direction. Consulting companies such as Global Resources that rent out employees to agencies or other firms often require workers to sign contracts pledging that they will stay on as consultants for years. Others also demand a financial penalty of thousands of dollars if they quit. India-based Tata Consultancy Service has sued dozens of employees who quit, winning default judgments and settlements of up to $30,000, because such contracts are legal in India. Tata has provided staff to IBM, Oracle and Hewlett-Packard, among others, for about half the cost of regular employees. Because California law allows both companies and employees to terminate work relationships at will, no-quit clauses generally cannot be enforced here, said Miles Locker, chief counsel for the California labor commissioner. Yet many workers don't know that, and such terms still appear in many contracts, leading those employees to consider themselves indentured servants.

Rohit Sethi was one. He left Bombay, India, for a $36,000-a-year job at MegaSoft, a small Lake Forest, Calif., firm. The company said it would pay his first month's rent and apply for an H-1B visa on his behalf. Sethi says MegaSoft President Pravin Nadkarni surprised him with an employment contract on his arrival, telling him to sign it or return home. Among the terms: If he left MegaSoft in less than 12 months, he would owe the company $10,000. Nadkarni said that the penalty was needed. "A lot of guys use the H-1B as a platform. This is to prevent them from coming here and three weeks later, you find they are doing something else," he said. Although most visa holders continue to keep quiet about their situation, that is changing as the frustration level rises. Indian engineers in New Jersey recently founded the Immigrants Support Network, which has begun to lobby for more and speedier green cards. An open letter to Congress earlier this year was signed by such tech luminaries as Linux inventor Linus Torvalds, himself an H-1B recipient, and Sun Microsystems co-founder Vinod Khosla, an Indian immigrant and partner at the leading venture-capital firm of Kleiner Perkins Caufield & Byers in Menlo Park, Calif. "Vote for green cards, not guest worker visas," they wrote. "The new economy needs new Americans." But tech CEOs, including Microsoft founder Bill Gates, have pushed hard for legislation to raise the annual cap on H-1B visas from 115,000 to as many as 200,000. Industry executives have depicted themselves as immigrant supporters. Immigrants, and American engineers as well, say it is telling that the companies are less interested in expanding the number of green cards. The companies say it's a matter of political tactics. "We would like very much to streamline the green card system," said Hewlett-Packard's Beall. "Congress doesn't really want to mix the two issues together." Some pending bills have provisions to help current visa holders. They would waive the per-country cap on employment-based green cards to cut the backlog for Indians and Chinese. And they would make moving among companies easier. They also would allow many who have green card applications pending to stay in the country until the application is resolved--as long as the worker remains with the same employer. But none of the bills would help casualties of layoffs such as Ponce, who wasted more than three years of his six-year green card window. After he was fired by Global Resources this summer, Ponce got a job at another temp firm. He gets to keep $25 of the $80 an hour that the temp firm charges clients for his services. His new employer promised to submit a new green card application for him. The firm sent him to work at a San Francisco telecommunications services start-up. Two months later, that start-up ran out of money and shut its doors.

And so Ponce is scrambling to drum up a new assignment before he gets fired again. "I'm scared," he said. "I hope I get another job soon. It has been a very--what do you call this?--strenuous journey for the last four years."

-- Martin Thompson (mthom1927@aol.com), September 21, 2000

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