Tech Firms Scramble For Visas

Tech firms scramble for visas

Monday key in race for limited — and controversial — H1-B permits for foreign workers

Tom Abate,
San Francisco Chronicle Staff Writer

Sunday, April 1, 2007

While most Americans are relaxing today, hiring managers at Microsoft, Oracle, Intel and other high-tech companies will be mailing applications to U.S. immigration officials seeking permission to hire temporary foreign employees under a controversial work permit called an H1-B visa.

Since 1990, the H1-B program has allowed U.S. companies to bring in a limited number of foreigners to work in “specialty occupations,” which range from rocket science to fashion modeling.

The current H1-B quota is 65,000, but a series of exemptions make that a soft number. In 2005, the most recent year for which data are available, the U.S. approved 116,927 H1-B visas.

By law, such temporary work permits are normally issued to persons who hold at least a bachelor's degree. Government data show roughly half of people holding H1-Bs meet that minimum. The other half have master's degrees or better, although high school dropouts with vital experience can qualify — which happened in 2003 when 117 fashion models won H1-B visas.

H1-B work permits run on a fiscal year that begins Oct. 1. Immigration officials say Monday is the soonest they'll accept applications, and employers fear that if they don't file their applications as soon as possible, this first-come, first- served system will exhaust its quota quickly — perhaps within days, which is why hiring managers are pulling post office duty today.

A similar rush last year forced Seth Sternberg, chief executive of Meebo, to delay some hiring plans. Meebo, a Mountain View developer of a Web site for instant messaging from anywhere, had hoped to add two foreign programmers to its 15-person staff last year. On May 27, the startup filed the paperwork to hire the two people, one from the United Kingdom and the other from Italy. But it turned out that last year's quota had been exhausted the day before Meebo's requests arrived.

“We'll have those applications ready to go day one,” Sternberg said last week. He plans to resubmit the visa requests to hire those two same code warriors starting this October.

Such frustrations have made an overhaul of the H1-B system a top priority of high-tech leaders. Microsoft Chairman Bill Gates has questioned the wisdom of putting any restrictions on hiring “the best and the brightest” in a global, knowledge-based economy — although his company's chief lobbyist, Jack Krumholtz, said a boost in the quota is probably all that is politically feasible.

But H1-B critics — led by older American-born programmers and their academic allies — say even if U.S. high-tech firms need employees from overseas to stay competitive, the program is flawed in a way that leads to the loss of jobs through outsourcing.

Ron Hira, a professor of public policy at the Rochester Institute of Technology, cited the most recent U.S. immigration data that show 44 percent of all H1-B visas were issued to people from India. Other government data show that Indian programming companies, including Infosys Technologies and Tata Consultancy, are among the biggest seekers of H1-Bs. Based on these facts, and reports from disgruntled Americans, Hira argues that the Indian companies hire H1-Bs from home, and use these temporary workers to learn their way around U.S. data centers in order to ship processes to India.

“The people who dominate the H1-B process now are engaging in offshore outsourcing,” Hira said.

Infosys and Tata declined to discuss the issue directly, redirecting questions to Jeff Lande, senior vice president of the Information Technology Association of America, which represents many U.S. and foreign-owned companies.

“That argument is not one I buy into,'' Lande said. “Companies, regardless of where they are headquartered, are facing a serious skills shortage here in the United States.”

The skills shortage is the central tech-industry argument for the upward revision or lifting of the H1-B quota. Robert Hoffman, Capitol Hill lobbyist for Oracle Corp., said one example of the scarcity of homegrown brainpower is the number of foreign students attending the nation's top schools.

“In practically every graduate program in math, science or engineering in major U.S. universities, about half or more of graduates are foreign born,” Hoffman said, arguing that firms like Oracle hire these sought-after specialists on H1-B visas as a prelude to helping them get the green cards that signify permanent residency status or citizenship should they desire.

Microsoft's Krumholtz, in reference to these sought-after foreign graduates, said: “We ought to be stapling a green card to their diplomas,” to make sure that they employ their intellects in the United States rather than returning home to compete against us.

Both assertions — about the scarcity of homegrown talent and the need to boost the quota to compensate — are reruns of debates that occurred in the late 1990s as the tech industry roared toward what ultimately proved to be the dot-com bubble. By 1999, employers had persuaded Congress to temporarily boost the quota of 65,000 H1-Bs to as high as 195,000 in fiscal 2003.

Ironically, the H1-B quota peaked during the dot-com bust, when tech hiring was weakest, and in fiscal 2004 it reverted back to 65,000 — just as the Web 2.0 phenomenon was rekindling the competition for programming talent.

But those opposed to lifting the H1-B cap say the present program gives employers all the tools they need to absorb the highly skilled foreign graduates that tech officials talk about, and complain — with justification — that the so-called cap of 65,000 is a fiction.

A November report from U.S. Citizenship and Immigration Services puts the basic quota of H1-Bs at 65,000. But the law also says the first 20,000 H1-B applications filed for any masters' degree candidate or higher do not count against that quota. So that gets the number to 85,000. The report adds that “petitions for new H1-B employment are exempt” for foreigners hired to work at universities, nonprofit research institutions or governmental laboratories, and that would push the cap above 85,000.

According to the report, the United States approved 103,584 H1-B visas in fiscal year 2002; 105,314 in 2003; 130,497 in 2004; and 116, 927 in 2005.

“It sure looks like they're issuing a hell of a lot more visas than they ought to be,” said John Miano, an attorney and H1-B critic from New Jersey.

If hiring the best and brightest is the goal, Miano said, the data show that the current program misses the mark because it awards most H1-B visas to people with bachelor's degrees (45 percent in the most recent year, down from 49 percent the prior year) who come from low-wage countries (India tops at 44.4 percent, China second at 9.2 percent).

Sacramento software engineer Kim Berry, president of the Programmers Guild — which he describes as “disproportionately over age 40 and disproportionately underemployed” — said it's tough for U.S. tech workers to see jobs going to H1-Bs.

“The top users of this (program) are foreign companies that come in and exclusively hire foreign workers and then the industry says we need more H1-Bs because they're all used up,” he said.

Shirish Gupta, president of the South Asian Bar Association of Northern California, said Congress should double the limit on H1-Bs. “The need for highly qualified engineers has not decreased,'' he said. “I think we might be facing a supply crunch. The U.S. should not be hamstrung.”

Inderpreet Sawhney, an immigration attorney in Santa Clara, agreed that “the U.S. economy will only benefit from skilled people coming here.” Her practice lets her see the flip side of the H1-B story — the people who come to the United States on temporary work permits with the hope of getting permanent residency and find themselves trapped.

“If they later on apply for a green card, they tend to stay with the same employer because if you chance changing employers during that time, you have to start all over again,” she said, adding “they get locked in.”

As this year's quota season opens Monday, Congress is gearing up to take another look at the H1-B issue, but so far Democratic leaders have said they want to address the high-tech worker issue in the context of the larger and far more complex debate over how to reform the immigration system.

Three dozen House members recently co-sponsored HR1645, a comprehensive immigration reform bill that includes revisions to the H1-B program favored by the high-tech industry, but those provisions are buried in a larger bill.

It's impossible to tell whether the overall package will move, or whether leaders like Rep. Zoe Lofgren, D-San Jose, whose influence stems from her chairing of the House Judiciary Subcommittee on Immigration, will back off from her mantra that reform should be “not only for rocket scientists but strawberry pickers” and push a separate bill for the tech lobby if the larger package fails.

Late last week Sen. Dick Durbin, D-Ill., introduced a bill more to the liking of H1-B critics that would tighten provisions that are supposed to ensure that foreign workers don't undercut American job applicants — and leaving the present cap in place.

While policymakers jockey over the issue, employers that want to hire workers on H1-B visas are doing whatever they can to make sure their applications get to the head of the queue.

“We're going to mad dash,” said Margie Jones, immigration manager for Intel in Santa Clara, adding, “I've got 200 cases that I'm working on.”

Chronicle staff writer Ralph Hermansson contributed to this report. E-mail Tom Abate at

This article appeared on page B – 1 of the San Francisco Chronicle