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What do the proposed restrictions on the L-1 visas mean

One of the most hotly debated topics in outsourcing is the L-1 visa, which is currently in hot demand with IT companies—and contested by many American workers.
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Written by Abbi F. Perets on

Ask a question about outsourcing these days and you’re likely to get an earful. Everyone has an opinion. And even if your company hasn’t yet been affected by the trend sweeping the nation, this isn’t a story that’s going away any time soon. As legislation comes to the floor and candidates gear up for campaign seasons, outsourcing and its subtopics—visas, layoffs, retraining, tax incentives—will get more and more press time.

One of the most hotly debated topics in outsourcing is the L-1 visa, which is currently in hot demand with IT companies—and contested by many American workers.

The current incarnation of the visa has been called a “back door to cheap labor" by various government servants, because companies can bring in employees from foreign subsidiaries (provided they’ve worked for the company for at least six months), then outsource them to other U.S. firms for extremely low wages.

In several recent highly publicized cases, American workers were forced to train their L-1 replacements before being fired—or forfeit their severance packages. Public outcry led Rep. John Mica (R-FL) to introduce HR 2154, which he said would close the “loophole” in the current law by preventing employers from contracting employees out to other firms once they arrive in the United States.

Mica’s proposed restrictions, however, garnered little support—critics said he was too lenient and that the new law would do nothing to protect American jobs. And in late July, Rep. Nancy Johnson (R-CT) and Sen. Chris Dodd (D-CT) sent H.R. 2849 and S. 1452 to the House and Senate, respectively—the USA Jobs Protection Act of 2003.

Their bill is already coming under fire from major corporations, but it’s also gaining a groundswell of approval from American workers who believe it might be the key to keeping their jobs. The Dodd-Johnson bill would, for example, limit L-1 visas to companies that “did not displace U.S. workers for 180 days before or after the filing of the L-1 petition. Companies would also be required to prove that they had “taken good faith steps to recruit U.S. workers for the position.”

Wages, too, are a major sticking point. The Dodd-Johnson bill would require employers to pay L-1 employees “wages that are the greater of the actual wage or the prevailing wage.” Currently, no such restrictions are in place; some companies pay L-1 workers one-third to one-fifth of what their American counterparts earn.

Said former IT worker Michael Emmons, “They’re asking us to compete with people who make $6,000 a year. How can we live here and do that?” Emmons worked for Siemens in Lake Mary, FL, where he and the rest of his team were mandated to train their replacements from Indian firm Tata Consulting. He said that the government’s visa programs are destroying what’s left of the fragile American economy.

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