H1B petitions: 21 percent fraud?
By Bala Shah

The US had set up the H-1B visa program to hire on a short term basis highly skilled workers not available in America. While most Indian tech firms win contracts based on their quality computing skills and competitive costs and treat their H1B techies well, there are others which exploit Indians at every opportunity.  The US Govt has announced huge fines for some such firms.

This misuse by some Indian body shops of the H1B Visas not only harms Americans, but it has a negative affect on skilled Indian techies as well. Many Indian techies sent to USA and Europe by India based IT firms were given only $40,000 a year even as they were being billed out on $80-100,000 per annum.  Sadly, some Indian techies and BPO workers were treated no better than cattle. Some Gurgaon based BPO workers even had their passports taken away once they reached USA.  For short term profits, a handful of Indian mafia managers sacrificed a long term healthy working relationship with some Americans and Indians as well.

The recession in America coupled with the lobbying by the anti outsourcing movement have forced the US Government to crack down on the loopholes in the H1B Visa system and raise the fees for temporary techie workers coming to America.  Recently, an American state Ohio banned offshoring.  Unlike the liberal free market policies of the Bush Government, Obama has tightened rules for techies to come and work in America.

The powerful US GAO has just released a report, part of which says that ‘as many as 21 percent of the H-1B petitions they examined involved fraud or technical violations.’ The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for Congress. Often called the "congressional watchdog," GAO investigates how the federal government spends taxpayer dollars.

The US Government Accountability Office released its H1B report on Jan 14, 2011 and the highlights are

- Most interviewed companies said the H-1B cap and program created costs, but were not factors in their decisions to move R&D overseas: The 34 H-1B employers GAO interviewed reported that the cap has created some additional costs, though the cap’s impact depended on the size and maturity of the company. For example, in years when visas were denied by the cap, most large firms reported finding other (sometimes more costly) ways to hire their preferred job candidates. On the other hand, small firms were more likely to fill their positions with different candidates, which they said resulted in delays and sometimes economic losses, particularly for firms in rapidly changing technology fields. Interviewed employers also cited costs due to the H-1B lottery process employed when the cap is reached - noting that it does not allow them to prioritize their candidates if they have submitted more than one petition or to make timely hires in response to business needs. On the other hand, most employers told us that the global marketplace and access to skilled labor drive their decisions on whether to move R&D and other activities overseas, not the H-1B cap.

-Limitations in agency data and systems hinder tracking the cap and H-1B workers over time: The total number of H-1B workers in the U.S. at any one time and information about the length of their stay - is unknown, because (1) data systems among the various agencies that process such individuals are not linked so individuals cannot be readily tracked, and (2) H-1B workers are not assigned a unique identifier that would allow for tracking them over time—particularly if and when their visa status changes. Although information on the total H-1B workforce is lacking, data on approved petitions show that, since 2000, most people that were approved to be H-1B workers were born in China or India, were hired for technology positions, and increasingly held advanced degrees. System limitations also hinder the Department of Homeland Security from knowing precisely when and whether the annual cap has been reached each year, although this problem might be remedied through the agency’s data-modernization plan. Finally, data limitations, along with complex economic relationships, hinder our ability to estimate the potential impact raising the cap would have on U.S. worker wages and employment.

-Restricted agency oversight and statutory changes weaken protections for U.S. workers: Elements of the H-1B program that could serve as worker protections - such as the requirement to pay prevailing wages, the visa’s temporary status, and the cap itself - are weakened by several factors. First, program oversight is fragmented and restricted. For example, the Department of Labor’s review of H-1B applications from employers is cursory and limited by law to only looking for missing information and obvious inaccuracies. Yet a recent Department of Homeland Security study reported that 21 percent of the H-1B petitions they examined involved fraud or technical violations.

Second, the H-1B program lacks a legal provision for holding employers accountable to program requirements when they obtain H-1B workers through a staffing company. Officials from the Department of Labor’s investigative office reported receiving the bulk of their complaints from H-1B workers contracted by staffing companies.

Third, statutory changes made to the H-1B program have, in combination and in effect, increased the pool of H-1B workers beyond the cap and lowered the bar for eligibility. Specifically, these changes have increased the available exemptions to the cap; offered unlimited extensions on the visa while holders apply for permanent residency; and broadened the job and skill categories for eligibility. Regarding the latter, over 50 percent of employers requesting H-1B workers between June 2009 and July 2010 categorized their prospective H-1B workers as receiving entry-level wages, although we cannot tell whether this trend reflects lower skill levels or other factors.