H-1B Program Rife with Fraud

Congress Told H-1B Program Rife with Fraud

by Jim Gillespie

Jay B. Palmer, the out-of-work former employee who sued InfoSys and won, testified this month before the Senate Committee on the Judiciary about systematic fraud in the H-1B and B-1 visa programs.

Palmer told the committee, “H-1B workers that are replacing the U.S. workers have minimal skills and little to no business knowledge.” The often-repeated complaint that H-1B visa holders possess special skills that cannot be obtained domestically is a deliberate lie, he says. “[M]ost of these workers have only a bachelor’s degree: how is this specialized talent?” Employers, such as Cisco and Microsoft, seek them out and recruitment companies like InfoSys provide them for one reason only: they come cheap.

“Some workers are being paid (on average) $2.00 an hour,” Palmer testified. The average worker is paid what he might be paid in India–around $5,000.00 per year.

B-1 vs H-1B

Jay Palmer revealed in his testimony how the B-1 visa has been used by InfoSys and other offshore recruiters to circumvent H1-B caps, always a thorn in the side of the cheap labor lobby. B-1 visas, which have no cap, are intended for foreign nationals coming to the United States for a specific and limited time for the purpose of attending conferences, negotiating deals, meeting with colleagues, and the like. B-1 holders are not expected and are not legally entitled to be working at jobs while in the U.S. The B-1 program is the visa program most susceptible to fraud, according to Palmer, because these visas are cheap ($500) and are comparatively easy to get. Once in America, the B-1 recipients–like many foreign students–are apt to simply disappear from sight, often seeking employment as “1099” contractors and are thus able to circumvent E-Verify restrictions.

InfoSys began to use the B-1 program extensively in 2009-2010 when its H-1B allotment was cut. Palmer documents InfoSys’ carefully planned scheme to fraudulently leverage the B-1 program, which has little monitoring, to get thousands of Asian workers into the United States and thereby reap huge corporate earnings. According to Palmer, InfoSys stock rose from $21 a share in March 2009 to $71 per share in January 2011. The company’s profitability has continued. It currently has more than 15,000 foreign nationals working in the U.S. from which it earns more than $3.5 billion every year.

[pullquote align=”center” textalign=”left” width=”50%”]”H-1B workers that are replacing the U.S. workers have minimal skills and little to no business knowledge. Companies will not invest in the American worker but [instead] bring in cheap labor.”[/pullquote]


The effects of packing the American workforce with foreign-born workers to improve the bottom lines of U.S. corporations and service companies such as InfoSys are disastrous. As Palmer notes, often the foreign workers’ “living conditions…are horrific. Many times 6-8 people are living in a hotel room or 1 bed apartment.” The picture he paints is one of indentured servitude at best and at worst little more than outright slavery.

Yet it is the displaced American worker, deprived of any livelihood whatever, who suffers most. Palmer cites an example from only one month of his tenure at InfoSys–January 2009–when he witnessed 7000 Home Depot employees forced to train their foreign-born replacements, after which all 7000 were laid off.

Senator Chuck Grassley, chairman of the Judiciary Committee, said in his own statement:

Then there are stories about how U.S. workers are treated. Time and again, we hear about how U.S. workers are being laid off and forced to hire their replacements, many of whom are not truly skilled. This is the case with Southern California Edison, a utility company that started laying off 500 American workers from its “IT” department last August. The company replaced them with foreign H-1B workers. The company opted to lay off Americans and instead contract that work out to two overseas-based IT consulting companies, which also happen to be some of the largest users of H-1B visas. In 2013, one of the two IT companies paid $34 million in a civil settlement after allegations of systemic visa fraud and abuse, but was not prohibited from continuing to petition for H-1B workers.

This displacement  is merely a prelude, Grassley says, to the eventual offshoring of Edison’s workforce altogether:

 [M]ost of the 500 jobs that had been held by Americans at Southern California Edison will eventually just move overseas. According to the Los Angeles Times, Edison admits that eventually about 70% of the work will shift overseas permanently.


Meanwhile, the demand for more and more cheap foreign labor continues unabated. The Big Money lobby is as determined and as well funded as they come. Without a Congress strong enough to resist it, the fraud and the displacement of American workers will go on.

(Download Jay Palmer’s testimonySenator Grassley’s statement)


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