IT Employment

New H-1B rules spur lawsuit from IT staffing companies

IT staffing firms are filing suit to stop the USCIS to act on a memo released early this year regarding H-1B visas.

IT staffing firms such as TechServe Alliance, Broadgate, Inc. and Logic Planet, Inc., have filed a joint suit against the U.S Citizenship and Immigration Services (USCIS) seeking an injunction against acting on a memo released early this year. The Neufeld Memo states that an employer must be "directly over the shoulder of the employee" in order to have an employer-employee relationship.

This is problematic for the staffing firms who employ those with H-1B visas and assign them to third-party work sites where they can't directly control them. In addition, when H-1B employees move from one job to another, they usually transfer their H-1B visa to the next company. Since the memo was issued, the USCIS has been blocking those transfers, according to Mark Roberts, the CEO of the TechServe Alliance. The IT staffing firms are estimating that this action would cost their industry over $100 million in business annually.

Critics of the IT staffing firms say not putting restrictions on H-1B visas means the firms can continue to bring in less costly H-1B workers which will displace U.S. workers.

The H-1B debate has been raging for a while but this lawsuit may be a defining moment.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

45 comments
danvaganek
danvaganek

American business keeps making the same mistake over and over. Heads were placed firmly in the sand some thirty years ago and while manufacturing jobs left the country turning thriving cities and communities into wastelands no one said a word...then it was service jobs and then IT jobs. Still nothing changes and that once great American product "Quality" has completely disappeared from the landscape as has "Pride". Cheap is simply, cheap. H1B workers don't care about America and the work bears that out. It is shoddy at best. Cheaper, yes, but severely lacking in every other category. Why do you think every project takes longer than anticipated? There is no business acumen and shortcuts are taken at every step. These shortcuts don't hasten delivery, but they do get the single line item delivered. Sadly, this delivery is not "complete". While companies continue to cuts jobs to meet short term budgets the longer view becomes completely overlooked. There is no shortage of American workers, but there is a shortage of another lost American trait...foresight.

ricrosen14
ricrosen14

Individually, I do not place lame on the IT people coming from other countries. America still is the land of opportunity, just not for Americans.

erh7771
erh7771

...there's no need for the government to be involved here. /sarcasm

DaemonSlayer
DaemonSlayer

Just too bad they won't feel the pinch until all the American can't buy even a stick of gum and our streets look like those streets in Africa where food and other supplies even at Chinese made prices feel more like luxuries without some foreign aid or feed the kiddies agency stepping in. (And then all those agencies will get is what the government allocates to them, and the amount that will give them maximum tax credit (and not a penny more.)

ricrosen14
ricrosen14

Who do you think subsidizes the charities???

craig.s.frazier
craig.s.frazier

Well it all boils down to cost. Businesses want profit not patriotism remember. Just my views

scott
scott

You're so right, I'm a business owner and I'm patriotic, I will be hiring domestic workers whenever possible. I will not look at my bottom line over the job of a fellow American. This is the type of thinking we need to get America back on track and be the place for employment instead of getting things offshore.

Tig2
Tig2

Well said. I just wish that thinking was more prevalent.

Fregeus
Fregeus

..that Americans are OK to do business with China. To me, that is the ultimate hypocrisy of all times. Americans have always portrayed themselves as lovers of freedom, liberty and justice. Which is good. But how can they do business with a country that is KNOWN for cracking down on personal freedoms, liberty and justice. Who are known to torture and kill dissidents. I appreciate America and all the good it does around the world, but when I see it put aside its values for the all mighty dollar, that makes me sick to my stomach. Not only are they ditching the American dream, but they are supporting a brutal, repressive regime in the process. And for what?? Stupid money. Money they would still have here, just a little less. Hypocrisy is the new way of life in most of America theses days. I too wish for change of mentality in America. A return to the favor of values instead of money. TCB

Fregeus
Fregeus

Good morning. Yesterday, I received from my pharmacist, a new blood glucose meter. He gave me the Accu-Chek Aviva Nano And I was very please to see that it was made in Germany. A fully democratic and respectful country that respect the rights and freedoms of all its citizens. I was very disappointed though to see that the little carry-on pouch supplied with the glucose meter was made in China. A non-democratic and disrespectful country, known for its Human Rights violations. I understand that the pouch itself is a very inexpensive accessory from which you gain no real profit from. But for the company that made the probable millions of unit that you perchased, it was probably profitable for them and therefore profitable for the undemocratic regime that controls it. Because, lets face it, Communism does not allow private ownership of companies, you bought your product from the communists who, through their increasing monetary power, are becoming a threat to our way of life, not to mention that we should do our best to render their regime obsolete. There are other countries, democratic and respectful countries, from which you could of purchased your product, maybe for just a few cents more, that would of made a real difference. Why don't you think of that the next time you need to purchase some inexpensive accessory. Your move, along with many others, could make a great deal of good that you could actually add to your "Corporate Responsibility" page. Show us that Corporate responsibility is more important to your shareholders than a few pennies, at maximum, in their quarterly dividends. Thank you. If we all do the same, they will have to listen. TCB

gmichaels
gmichaels

If you (have to) go to Walmart, look at all the products made in China! A little over 10 years ago, when Sam Walton's influence was still strong, "Sam's Choice" (made in America) was a strong product name there. Businesses are so busy trying to make profits that they would rather buy from China, where the average worker makes $65 (sixty-five dollars!) a MONTH! And most Americans blindly subsidize this when they go to Walmart. I avoid going to Walmart and buying Chinese-made products, but American-made is getting harder and harder to find! And so it goes for the IT industry. I started seeing the first IT workers from India at Electronic Data Systems in 1994; they were sharp, but I wondered why, with the communications issue (proper English speaking/writing) they were hired. The foreign workers continued to flood in, and now, I have been unable to obtain meaningful employment for months ...

mr_m_sween
mr_m_sween

Obviously, I'm in america. Born and raised here. And I wish I could say that you were wrong. The fact is that several factors have been slowly eroding the vision of America almost from the moment that the constitution was signed. What you see as hypocrisy I would call the corruptive aspect of power. Power corrupts, and absolute power...well you know the rest. In this country, money = power. I wish it wasnt the case that the root of all power is also refferred to as the root of all evil. I will also say, that every possible endeavor is spent here to avoid the general public knowing about half of the nonsense that goes on.

brian.minerly1
brian.minerly1

Blame the employers, and the legislators who make it legal.

gary
gary

Think about a Kleenex: you blow and then you throw. Contractors are like Kleenex: you are used and then you are "thrown away". These staffing firms are just a middleman in that equation. They route the client to the contractor. (Yes, client to contractor, not contractor to client.) For this service, they take a big cut but they don't take any of risk that that contractor may screw things up or the client won't pay. When these firms say that they are going to lose $100M, I would not be surprised that employers could get then same amount of work for $50M by hiring non-H1B employees (i.e., American citizens). H1B visas for IT are just another form of slave-trading and I will be very happy when these slave traders are out of business. So, buy a few handkerchiefs and blow off these staffing firms.

gipit33
gipit33

These "people" are the BANE of the IT world. Thank God. They MUST BE DESTROYED!

jonrosen
jonrosen

The contract-placement people, then you're dead-on.. If you mean the people needing the H-1B visas, you're a moron. Thing is my first wife was from India, and was able to actually fill the need for an H-1B visa. But what it lists is that the person with the H-1B MUST BE ABLE TO FILL THE ROLE THAT AN AMERICAN CANNOT. Which, in this case is pure BS. There are Americans out there with these skills, or able to learn it. Considering what I recall my wife going through to even get that, it seems ludicrous that ANY contract staffing firm should be able to get an H-1B for anyone. By nature of it they SHOULD be looking over the H-1B contractor's shoulder. I hands-down support this change.

brian.minerly1
brian.minerly1

Your racist comments are disgusting. It's hard to blame any person wanting to better their lot in life. However, I have no problem criticizing the firms that exploit them.

Dr Dij
Dr Dij

It's countryist. so is OK.

gipit33
gipit33

I don't mean to be racist, but let's get real for every H-1B worker somebody's Dad or Mom is being let go. (I worked for Dell) They don't know anymore than a American it worker. They siphon off the cash and smile. I vote for my congressman and senators to destroy them and their firms. How can you (I'll go our on a limb and say that you're a American OR are you a CAPITALIST?) be okay with that?

CharlieSpencer
CharlieSpencer

of the memo Toni linked to. My view is that this appears to create two classes of employees for firms that fill temporary staffing needs, discernible between those temp workers who do not require visas (citizens) and those who do. I'm no lawyer, but I suspect the staffing firms will work this issue.

yattwood
yattwood

When I first started working at my company about 12 years ago, contractors were rare - now it's rare to find actual employees! The contractors have been implementing WebSphere, WebLogic, Cognos, ColdFusion, DB2, etc - while the few employees that remain are trying to keep older systems going - and it's not like the employees can't learn new technologies - although the bulk of my experience has been Oracle on UNIX, I also do backup SQL Server Support, and know enough DB2 to get out of a wet paper bag. Now our data center is being outsourced overseas, and people from the outsource data center are pulling people such as myself into multiple meetings, some lasting over three hours, attempting to do "Vulcan mind-melds" to learn about our systems. Managment is convinced that all of this will save money; end-users are skeptical - they enjoy having a _local_ person to contact. I figure I have about 18 months to 2 years before all the dust settles - because we have moved data centers before, and it has taken about that long to have procedures and operations in place, no matter what the glossy PowerPoint presentations to upper management promising every buzzword related to data centers say!

mr_m_sween
mr_m_sween

Seems to me based on this any staffing firm would be having an issue. Lets say you're the employer, and you place a secretary from your staffing firm as a temp at a client downtown. That staffer is not going to be in an over the shoulder scenario right? Or what about the home office user that doesnt come into an office. Or the extreme example where a company has no need for a physical office as they do all their work virtually. What constitutes an over the shoulder relationship? If the government needs to cut down on immigration, just say it. It's certainly within their purvue to handle such a thing.

ke_gordon
ke_gordon

I always thought that the issue of H1-Bs visas should be tied to the unemployment rate. High unemployment -- fewer H1Bs. Low unemployment -- more H1bs.

Twilight23
Twilight23

This is a much better fix than what is being proposed by USCIS. Limiting what can be done with H1Bs is not the answer - limiting the number of H1Bs is a much better solution.

Fregeus
Fregeus

a bit of good news. TCB

mcswan454
mcswan454

Would it hurt to hire some of us US types? Respectfully, M.

xeno6696
xeno6696

Sorry. Don't buy that argument. While my limited experience has demonstrated to me that you tend to get what you pay for--the fact remains that I've seen no "displacement" for any IT workers save those that refuse to move from the Detroit area. I hate protectionist rhetoric.

gipit33
gipit33

See it's kinda like that scene in the Movie "Inglorious Bastards" you are a RAT! No you didn't do anything to me. But as long as you live me and my American family are at risk and you MUST DIE!. You Rag heads carry poverty and disease.

gmichaels
gmichaels

This is ironic -- today I got an email from TechRepublic, stating, "10+ things you should know about applying for an H-1B1 visa." Foreign workers have directly impacted my ability to quickly obtain employment; in the 1990s the process was as simple as "sign this W4 and go to work." Now you have to jump through all kind of hoops and be "filtered" first. But the H1B visa worker has a "golden ticket" to employment -- low hourly rates! I am an older IT worker and I can learn new technology, but how would that benefit me at 58 years of age? If it wasn't for the profusion of H1B visa workers (many younger workers, being newly trained in MAINFRAME technology -- why are they learning the technology that I know and could do as well if not better than them? I'm (re)-learning SQL Server's latest release (I knew 2000) but frankly, the PC world does not have the logic and structure of the mainframe and is changing faster than a person can learn. I say either restrict or deny H1B visas until it can be proven that there is not a talented IT person here in America who can do the work!

megabaum
megabaum

You said it perfectly, ... deny H1B Visas until it can be proven that there's not a qualified IT worker in the US who can do the job! Sadly our friends in Washington cannot seem to grasp this simple concept, which is in alignment with trade and non-immigration laws. Good post!

seabruce
seabruce

H1Bs are usually used when no US person is available for the position, because the employer pays $6-10K for the paperwork and has to pay the "prevailing wage" for the job, so there it is not a cheaper way to go. Now with the unemployment rate higher than it was, I imagine this is used less and less, it that is any consolation.

NickNielsen
NickNielsen

in print, I start looking for irony or sarcasm. What exactly is the "prevailing wage"? Who determines it? If I'm the only employer of my type (and since it's me making that determination...), what I'm paying is the prevailing wage, no matter that the market wage is twice or more what I'm paying.

megabaum
megabaum

Thanks for the link. I hope our politicians wrap their brains around this soon.

megabaum
megabaum

Unfortunately this is not what's happening, ... i.e. H1Bs are not used "when" there is no US person is available. This can be proven many times over, in thousands of cases. Additionally, no H1Bs are not getting the prevailing wage! =P

gmichaels
gmichaels

DaemonSlayer, that is a great link! I'm going to save this document on my flash drive, for the next time that someone tells me that we are lacking the skilled IT workers here.

paul.doherty
paul.doherty

H-1Bs are rarely paid the "prevailing wage". And H-1Bs living and working inside the USA currently OUTNUMBER the number of US unemployed IT workers. So the scarcity of workers argument doesn't fly either. Finally, if the H-1Bs weren't cheaper why do employers go out of their way to avoid hiring qualified US workers so they can hire H-1Bs? The answer is they pay them less, give them less (if any) benefits, and have what amounts to an indentured servant, stuck with them for their 6-year immigration tenure. H-1Bs outnumber unemployed US IT workers: http://www.computerworld.com/s/article/9133529/U.S._H_1B_workers_outnumber_unemployed_techies US employers attending a conference showing how to AVOID hiring qualified Americans and still meet the letter (but obviously not the spirit) of the law and hire H-1Bs instead: http://www.youtube.com/watch?v=TCbFEgFajGU

tsmith71553
tsmith71553

.. neeed more of this type of thinking.. let some of the other countries like China, Japan, Russia, etc., support these "leeches" for awhile - - let's "take care of our own", and then we can bring our economy back where it needs to be .. enough of the "bleeding heart" crap !

erh7771
erh7771

...by immigration. Once the contractor is in place the amount of work, level or work, responsibilities etc aren't overseen either. Little government oversight = exploitation of Visa holders and displacement of US workers

LouCed
LouCed

Thanks for the link. I left IT proper because of this recurring practice, and the offshoring of jobs. One place I know of replaced 80% of operations guys with offshore workers and held the 20% accountable for all the work. Even with a 3-1 replacement they could not keep up with the work load.

Tony Hopkinson
Tony Hopkinson

No US person available for indentured slavery at a pitiful rate so they can increase their margins more like. The only person you may have fooled with that naive drivel is yourself.

brian.minerly1
brian.minerly1

There are plenty of US workers available. There just aren't enough at the price point the employer wants.

gipit33
gipit33

Thank God, I've never been a racist but in this day and age SOMETHING has got to be done.