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A segment of CBS 60 Minutes, top rated American newsmagazine on television, has recently brought sharp focus on H1B visa abuse. It alleges that the H1B visas are being misused by Indian body shops to bring low-cost Indian software engineers to the United States to replace higher-paid American workers.
H1B Visa Abuse:
The visa category was originally intended to help fill gaps in the high-tech workforce with highly skilled employees from abroad in situations where there aren’t enough Americans. Instead, it has given rise to body shops that bring in workers from overseas, mainly from India, to replace higher-paid American workers.
Recent examples of the firing of American IT workers and their replacement by Indian workers at UC San Francisco and Walt Disney and Co have received a lot of media attention. What has particularly incensed the American public is the practice of forcing the American workers to train their replacements.
Labor Cost Savings:
A loophole in H-1B legislation that US companies are taking advantage of allows them to outsource jobs to Indian body shops without even looking for Americans, if those jobs pay approximately $60,000 or higher. Similar jobs in Silicon Valley pay an average of $110,000 a year.
The average salary of a software engineer ($110,000) in Silicon Valley is about 20X more than the average salaries in India ($6,875) and Pakistan ($4,770), according to Glassdoor.
Indians Gaming H1-B System:
Indian body shops are masters of gaming the H1-B system. Most of India's IT exports to the United States are made up of wages of H1B workers brought to the United States by a handful of Indian body shops like Cognizant, Tata Consulting Services (TCS) an.... In 2014, 86% of the H1B visas for tech workers were granted to Indians, according to available data.
Excluding the Indian H1B workers' pay, India's IT exports drop to about one-twentieth of the the amount reported by the Indian government as IT exports, according to a 2005 study by US General Accounting Office (GAO).
The Indian body shops like Cognizant, TCS and Infosys that rely on the H1B visa program in the US are "the shining star" of the Indian economy, and the country's largest export, according to an Indian-American professor Ron Hira who is a strong critic of the abuses of H1B program. By complaining, the Indian government and firms that rely on the program are trying to "build up a firewall so that no other reforms can come through and constrain the program in any way."
|Average Salaries of Software Engineers in Major Cities Source: qz.com|
Indian Code Coolies:
H1B workers brought in by Indian body shops are described variously as "code coolies" or "H1B slaves". Some call them "indentured servants", like the ones from India who replaced slave labor after the British empire abolished slavery.
“’Indentured servants’ is a pretty accurate term because in many cases that’s exactly what’s going on,” said Phillip Griego of San Jose’s Phillip J. Griego and Associates. Over the years, Griego and his law partner, Robert Nuddleman have represented several H-1B workers in lawsuits against body shops.
Along with cracking down on illegal immigration, a key campaign promise of President Trump has been to create lots of American jobs for American workers. “You’ve heard me say the words, and I’ll repeat them, right now: Buy American and Hire American. It’s not just a motto, it’s a pledge. It’s a pledge to the working people of this country. The era of economic surrender for the United States is over -- it's over,” Trump said at Michigan earlier this week.
Right after the CBS 60 Minutes segment on H1-B visa, Senator Chuck Grassley tweeted: "If u just saw CBS 60minutes abt ripoff H1B visa program is replacing AmWorkers u shld know my/Durbin bill will correct this injustice."
There are reports that new legislation is being offered to change the H1-B program. Among the key provisions of this new proposed legislation are cutting the number of visa by 50% and doubling the minimum salary of H1B workers from $60,000 to $120,000.
The abuse of H1B visas to replace American workers and depress wages is drawing both legislative and executive attention under the Trump administration. High profile cases like the firing of American workers at UC San Francisco and Disney and their replacement by Indian workers has energized the support for cracking down on abuse.
India Files WTO Complaint Against US Over H1-B Visa Changes
India is the Biggest Source of Illegal Immigration in US
India's IT Exports Highly Exaggerated
Pakistan's Rising College Enrollment
Silicon Valley Pakistani-Americans
Pakistan Third Most Popular Among Outsourcing Countries
Pakistan Among Top Outsourcing Destinations
Software engineers' salaries
Pakistan Avg Rs 500,0000 ( US$4,770) Min Rs 240 K ($2,290) Max $1.08 million ($10,302)
India Avg Rs. 450,000 ($6,875) Min Rs 327,000 ($4,125) Max Rs. 519,000 ($7,930)
China Avg RMB 150,000 ($21,760) Min 80,000 ($11,605) Max 246,000 ($35,687)
USA $95,105 Min $67,000 Max $132,000
UK British Pounds 37,469 ($46,786) Min 26,000 ($32,465) Max 61,000 ($76,168)
Canada C$72,000 ($53,853) Min C$51,000 ($38,146) Max C$95,000 ($71,057)
Germany Euro 54,000 ($58,144) Min 42,000 ($45,223) Max 70,000 ($75,372)
France Euro 42,000 ($45,223) Min 34,000 ($36,610) Max 55,000 ($59,221)
Australia A$83,968 ($63,963) Min 62,000 ($47,229) Max 116,000 ($88,384)
Israel Shekel 240,000 ($65,717) Min 126,000 ($34,501) Max 319,000 ($87,350)
#Indian Owner of #SiliconValley Valley staffing firm charged in #h1b visa fraud - SFGate
SAN FRANCISCO (AP) — The owner of a company that supplied foreign workers to San Francisco Bay Area technology companies is facing visa fraud charges after filing fake documents to bring people to the United States, the U.S Attorney's Office announced Friday.
A federal grand jury indicted Jayavel Murugan, CEO of Dynasoft Synergy, Inc., and a second man, Syed Nawaz, on Thursday on charges including conspiracy to commit visa fraud.
The men obtained H-1B visas for more than a dozen people by claiming the workers had jobs at Stanford University, Cisco Systems and Brocade Communications Systems, according to the indictment. No such jobs existed, but Dynasoft could use the fraudulently obtained H1B visas to get the workers to the U.S., where it could place them with other companies and profit, prosecutors said.
Bala Murali, Dynasoft's chief operating officer, said Nawaz was not available.
Murugan said he did not know about the indictment and was "shocked." He said he needed to consult with his attorney and did not immediately have additional comment.
US Rep Issa says #India benefits disproportionately from #H1B visas, Wants min #H1B worker salary raised to $100,000
Indian companies and workers are disproportionately gaining from the current method of allocation of H-1B visas and this is a distortion of the programme, said a U.S lawmaker at the forefront of an ongoing campaign against alleged abuse of the visa programme.
The current system of selecting H-1B visa recipients is neither fair nor efficient, and it must be replaced, said Congressman Darrell Issa, who has recently introduced a Bill that proposes to raise the minimum salary of H-1B employees to $1,00,000 per year from the current level of $60,000.
Speaking at an event organised by the Atlantic Council on Monday, the California Republican was not sure if his Bill will be passed by the legislature, but said: “The President supports the Bill and we will have strong support in the Senate.”
“We can’t have 75% of a programme going to Indian-owned, Indian-operated companies and Indian employees and not say that this is a distortion. At the end of these reforms, will this programme still disproportionately favour countries that are willing to let go of their high-skilled workers and come here? Yes. Will it be as extreme as it is now? No,” the lawmaker said.
The Congressman had proposed to expand the number of visas in a Bill in 2013, but he said that proposal is not desirable now. “We were then saying that we are pushing to get the best and the brightest to the country. We had a lot of good people going away even after graduating from U.S. universities, including the medical doctors,” he said adding that due to the abuse of the programme, American people have lost confidence in it.
H1-B Visa Applications Pour In by Truckload Before Door Slams Shut
In 2014, the last year for which information is available, just 13 outsourcing firms accounted for a third of all granted visas. The top recipients were Tata Consultancy Services, Infosys and Wipro, all based in India.
The companies, which subcontract their employees to banks, retailers and other businesses in the United States to do programming, accounting and other work, often inundate the immigration service with tens of thousands of applications.
BitTitan, a growing company that hopes to hire 60 engineers in the next 12 months, is submitting six applications. “We are trying to fill specific positions around cloud and artificial intelligence,” the chief executive, Geeman Yip, said. “If we can’t fill them, our innovation suffers.”
Several bipartisan bills in the Senate and the House seek to make companies give more priority to American workers before they fill jobs with H-1B visas. They also seek to raise the minimum pay for the jobs, which depend on skill level and location: A computer systems analyst in Pittsburgh, for example, must make at least $49,000 under current regulations. The theory is that higher pay will eliminate some of the rationale for importing workers.
A draft of a presidential executive order on “protecting American jobs and workers by strengthening the integrity of foreign worker visa programs” was distributed widely in late January but never signed. Then, without warning, Citizenship and Immigration Services published a memo on its website over the weekend that could affect many applications.
Specifically, companies seeking to import computer programmers at the lowest pay levels will have to prove that the work they perform qualifies as “specialty” labor, which is what the H-1B visas were created for. “There will be greater scrutiny of the role the company wants to fill,” said Lynden Melmed, a lawyer in Washington and a former chief counsel for the immigration service.
The measure appears to be directed mainly at outsourcing firms, rather than the big technology companies, which tend to hire workers at higher skill and pay levels.
In a statement, the National Association of Software and Services Companies, the main trade group for India’s outsourcing industry, said, “The H-1B visa system exists specifically because the U.S. has a persistent shortage of high-skilled I.T. talent.”
The group said that its members followed all the program’s rules, and that the change would have little impact. “It is aimed at screening out less-qualified workers, whereas our members tend to provide well-credentialed workers to help U.S. companies fill their skills gaps and compete globally,” it said.
Even before the memo and the Justice Department’s warning, fears about the future of the H-1B program were making this year more pressure-packed than most. “Just to make sure the petitions get in, almost every client demanded that theirs arrive on the first day,” said Greg McCall, a lawyer at Perkins Coie in Seattle who prepared 150 applications.
Inside the federal building, a formidable structure that has provided backdrops for movies including “Coma” and “Outbreak,” the logistical dance unfolded over two floors. In the mailroom, about 40 people wearing blue gloves sat around tables opening packages that arrived nonstop in six-foot-high bins. In a huge warehouse, those same packages were separated according to whether the applicants had bachelor’s or master’s degrees.
All told, 1,500 workers were involved, with a second shift expected to stretch past normal business hours.
“This is the day we prepare for months and months in advance,” said Donna P. Campagnolo, the center’s deputy director.
Trucks came and went all day, with some couriers, including from FedEx, staggering their deliveries to avoid having dozens of trucks backed up at the gate.
With its bad #engineers and horrible #internet, #India is far from becoming the next #SiliconValley https://qz.com/950473 via @qzindia
...However, surprisingly, India fared poorly, ranking 26 out of the 28 major global tech hubs evaluated in HackerRank’s April 06 report (paywall).
The coding recruitment platform rated each country on nine factors: corruption perception, english-language proficiency, competition for talent from other tech companies, average salary, rent, taxes, internet speed, STEM grads, and skill. Overall, Singapore topped the list because it had “the lowest taxes, fastest internet & exceptional talent.” Last year, the Singaporean government committed $19 billion towards R&D and the local engineering ecosystem, while Google expanded its office in the city-state to 1,000 engineers.
While India ranked fourth for its supply of cost-efficient engineering talent, it ranked 19th on skill sets as the quality of its talent is questionable. Besides, it isn’t going to stay cheap forever. “The developer cost, the executive cost, was supposed to be at least 50% (compared to Silicon Valley). Now it’s like 75%. And it’s not going down, it’s only going up,” says Ravisankar. India is also at the bottom on corruption and taxes. Moreover, the time difference with the US doesn’t
make life any easier.
Most importantly, India is the worst when it comes to the internet.
An Economist Intelligence Unit study of internet inclusiveness ranked India first among 75 countries on policies to ensure connectivity. However, network availability and quality in the country were deeply flawed. A 3Q 2016 Akamai report says India’s 4.1 megabits per second (Mbps) average internet speed is Asia’s slowest. Frequent power cuts in pockets of the country and a sizeable chunk of the population—240 million—lacking power supply, only add to the chaos.
Where to go
As the Trump administration clamps down on immigrant workers, companies in the Valley—the biggest tech behemoths and up to 19,000 startups—will probably seek innovation hubs outside the US. Even otherwise, the region is approaching saturation.
HackerRank designed an interactive tool that lists the top countries for users based on parameters that matter to them. “Large companies like Google or Facebook might care less about cost than a startup. Smaller, more agile companies may prioritize cost-effectiveness and skill level to hire developers who can start coding on day-one,” the report states. “If you’re anticipating overseas collaboration, then low corruption levels and language barriers could take priority.” For instance, despite its shortcomings, a company that values cost savings above all might find India favourable due to the low rents and cheap labour costs here.
The following are HackerRank’s top five countries for collaboration, cost, and talent, and their rankings in the sub-categories used to determine them.
COLLABORATION Internet English Corruption
1. Singapore 1 8 5
2. Canada 12 1 6
3. UK 10 1 9
4. New Zealand 17 1 3
5. Ireland 13 1 10
COST Salary Taxes Rent
1. Egypt 1 14 1
2. Bulgaria 8 5 4
3. The Philippines 2 13 8
4. India 4 23 3
5. Hungary 7 15 5
TALENT STEM Grads Skill Competition
1. China 1 1 20
2. Taiwan 3 5 5
3. Russia 9 2 14
4. Poland 8 3 11
5. Hungary 25 4 12
While these locations show promise, Silicon Valley remains a class apart. “I think Silicon Valley is still one of the best places to start a company because of infrastructure, for things like Y-Combinator, and other investors,” says Ravisankar. “People there have solved the social network problem. People have built YouTube, people have built Paypal, people have built Square.”
What software engineers are making around the world right now
A new study published by the data science team at Hired, a jobs marketplace for tech workers, shows why it’s becoming harder for software engineers to afford life in San Francisco, even while they make more money than their peers elsewhere in the U.S. and the world.
Based on 280,000 interview requests and job offers provided by more than 5,000 companies to 45,000 job seekers on Hired’s platform, the company’s data team has determined that the average salary for a software engineer in the Bay Area is $134,000. That’s more than software engineers anywhere in the country, through Seattle trails closely behind, paying engineers an average of $126,000. In other tech hubs, including Boston, Austin, L.A., New York, and Washington, D.C., software engineers are paid on average between $110,000 and $120,000.
Yet higher salaries don’t mean much with jaw-dropping rents and other soaring expenses associated with life in “Silicon Valley,” and San Francisco more specifically. Indeed, factoring in the cost of living, San Francisco is now one of the lowest-paying cities for software engineers, according to Hired’s lead data scientist, Jessica Kirkpatrick. According to her analysis, the $110,000 that an Austin engineer makes is the rough equivalent of being paid $198,000 in the Bay Area, considering how much further each dollar goes in the sprawling capital of Texas. The same is true of Melbourne, Australia, where software engineers are paid a comparatively low $107,000 on average, but who are making the equivalent of $150,000 in San Francisco.
In fact, Hired says it’s seeing a “huge percentage of our candidates” in other markets that are attracting and hiring relocation candidates. In Austin, says Kirkpatrick, 60 percent of job offers are being extended to and filled by people outside of Texas.
(It should be noted that candidates who are willing to move to a new city are often paid more than local candidates, per Hired. It says this is especially true of European, Canadian, and Asian markets, where, astonishingly, non-local candidates can earn up to 57 percent more than their local peers.)
How bias shows up in salaries
Hired’s study explores a range of other data, including how much data scientists and product managers are being paid across 16 major cities and how that salary information has changed over time. Of greater interest to us, however, is another section focused on the impact of bias on salaries and hiring practices. It’s something Hired began following roughly a year ago by collecting voluntary demographic data from candidates and examining how their identity impacts the wages they ask for — and what they receive.
Bias is nothing new, of course. In fact, in a survey released Tuesday by the job site Indeed.com, one quarter of U.S. workers in the tech sector said they’ve felt discrimination at work due to their race, gender, age, religion or sexual orientation. Roughly 29 percent of female respondents said they experienced discrimination, compared with 21 percent of men. Meanwhile, 32 percent of Asian and nonwhite employees said they were discriminated against, compared with 22 percent of white employees.
#H1B visas: #India talks tough, signals it may hit back over #US curbs. #Trump
India has signalled it could respond against the US move to restrict H-1B visas by capping the royalty payout by American companies in India to their parent firms.
Not only does the veiled threat signal a toughening of India’s stance, the move, if implemented, risks escalating into a full-blown trade war that could harm the otherwise warm relationship between the two countries.
“It is not just that Indian companies are in the US, several big US companies are in India too,” trade minister Nirmala Sitharaman told reporters on the sidelines of an event in New Delhi. “They are earning their margins, they are earning their profits, which go to the US economy. It is a situation which is not where only the Indian companies have to face the US executive order. There are many US companies in India which are doing business for some years now. If this debate has to be expanded, it has to be expanded to include all these aspects. We shall ensure that all these factors are kept in mind.”
The trade minister, however, declined to be drawn into a confrontational stance, saying India still preferred a constructive dialogue.
Sitharaman’s remarks came two days after US President Donald Trump ordered a review of the H-1B visa regime for bringing skilled foreign workers into the US, a move that could undermine technology and outsourcing firms.
When asked whether there is a case for India to drag countries such as the US, Australia and New Zealand to the World Trade Organization (WTO) for raising barriers to the free movement of professionals, Sitharaman said: “At this stage I can only say that we will ensure that we engage with them constructively. At the same time, I have no hesitation (in) saying that India will ensure that it shall not accept unfair treatment.”
At the event, Sitharaman said countries like the US had provided a commitment to the WTO on the number of work visas they would provide, and India can question them if they didn’t live up to the commitment.
#India's #IT giants are laying off employees. And the worst is yet to come. #H1B #Wipro #Infosys #TCS http://www.dailyo.in/politics/it-sector-unemployment-layoffs-cogniz... … via @dailyo_
The $150-billion Indian IT sector has not just been an important contributor to the country's GDP and global exports, but has also been at the vanguard of white-collar job creation in an otherwise jobless growth of the past two decades.
For years, campuses across India have relied on the mass hiring by the likes of Infosys, Tech Mahindra, Cognizant, etc as the placement hub for India's large crop of engineers. But, of late, the sun has stopped shining on the sector. Major recruiters like Wipro, Infosys, Cognizant have been seen significant reduction in their workforce. The bad news though is that the worst is yet to come.
For various reasons, we may see massive layoffs in the IT sector. Here's why:
1. The rise of automation
Over the past few years, automation has gathered pace and, in the coming time, it promises to replace many jobs, especially of repetitive and mundane nature.
The competitive advantage in favour of automation has been increasing with technological advancement reducing cost, improving performance and wider applicability becoming possible. The Indian IT sector faces a serious challenge from automation as the nature of most jobs here is "mundane". Besides, human discretion and intelligence are low enough to be easily replaced by automation.
2. 'Freeze' on hiring Indians abroad
India's abundant labour force had made it less expensive to hire Indian expats for projects abroad. But the tide has turned against this trend with US proposing to raise the minimum income requirement for H1B visa to $130,000 from existing $60,000. Australia, Singapore and many other popular lucrative markets too have introduced procedural changes making life difficult for Indians. Getting a work visa has been made both time-consuming and costly.
This will affect one of the most lucrative opportunities that our IT workforce enjoyed, and make it more difficult to employ middle-level employees whose higher salary expectations are difficult to fulfil within India in an industry, where mass hiring at the bottom (to keep the cost low) is the norm.
3. Rises of protectionist politics in US, Europe
The rise of protectionist politics in advanced economies has increased the pressure on companies there to outsource contracts to local companies, instead of firms in India. This is making growth prospect more difficult for Indian IT companies.
The proposed reduction in corporation taxation in the US as well as France will also further incentivise more of the IT big shots to shift back some, if not a major portion, operation back to the US. All this again doesn't bode well for jobs in the Indian IT sector.
4. Corporate governance and Indian IT brands
Indian IT's fabled rise was built on the foundation of outstanding corporates who won the trust and respect of their stakeholders at home and abroad through admirable corporate governance.
But even as the industry needs the goodwill in these difficult times, the Indian IT bellwether have had a rather tough time negotiating corporate governance troubles.
While TCS has seen Tata Sons being mired in a dirty and ugly boardroom struggle, Infosys, after years of being led by unsatisfactory successors to its founders, found a decent performer in Vishal Sikka. But the respite seems short-lived as the current leadership has been engaged in a power-cum-perception struggle against Infosys old guard, notably Narayana Murthy, who has levelled and repeated some serious charges against the present leadership.
5. Sluggish global economy and low demand
As such, the big ticket projects are far fewer in number now with the global economy slowing compared to the initial decade of the millennium when Indian IT sector came of age.
#India's tech sector downsizes heavily as #Trump’s #H1B temp worker visa policy creates uncertainty
Technology companies in India are in the midst of a massive restructuring drive that has both employees and industry analysts worried over the future of the sector.
Information Technology companies like Infosys, Cognizant and Tech Mahindra have announced redundancies this year and some analysts have said that this string of layoffs are expected to continue for the next two years.
A recent report from McKinsey India says that at least 200,000 software engineers in India will lose their jobs each year over the next three years.
According to local media reports, tech giant Infosys had earlier announced its plans to lay off about 1,000 employees at senior levels based on performance-based processes, the company also then announced its plans to hire 10,000 Americans over the next two years – a move many analysts have said will please U.S. President Donald Trump. Following this move, other companies such as Cognizant announced their plans to cut 6,000 jobs.
"With the majority of their business coming from US-based clients, it seems like a natural step for Indian IT companies to expand and strengthen their client offering in a market that promises sustained growth. This will undoubtedly benefit U.S. workers and sing to the tune of Trump's America First strategy," Af Malhotra, co-founder of Bangalore-based IT firm GrowthEnabler, told CNBC via email.
U.S. President Donald Trump's "America First" agenda and focus on curbing immigration especially around the much-sought-after H-1B visa policy may hurt India's massive information technology sector that forms a strong base for the country's economy.
Data from Goldman Sachs estimates that Indians accounted for nearly 195,257, or 70.1 percent, of all beneficiaries of the H-1B visa program in 2015. And hence, President Trump's decision to steer his policies towards "America First" is clearly going to hurt these professionals as well as Indian software companies. But there are divergent views on whether the redundancies in India by major IT companies have anything to do with Trump's policies.
"It does not seem like Indian companies are laying off in India so they can hire in the US," an IT-professional based in the U.S. told CNBC on the condition of anonymity due to the sensitive nature of the topic. "The IT sector has been struggling, these companies have been having poor disappointing earnings/lower guidance for a few quarters now and that is probably the primary driver."
125 #IT Jobs Just Moved From #Noida #Delhi #India To #Islamabad, #Pakistan. #Tech
On the night of November 1, stretching into early next morning, close to half the workforce at the Noida office of a US-based IT service provider was informed that their services were no longer needed. A former employee says salaries for the staff at the Noida office were declared delayed by a day on October 31. The official explanation was that the servers were not working. “They weren’t clear about how many people were going to be laid off,” he says. The next night, they “axed 125 people in half-an-hour.” They all got a severance package—a cheque for October and another two months of salary—and a termination letter. Rumours of layoffs had started doing the rounds four to five months ago. The talk was that the company was opening offices in a neighbouring country.
Curiously, the day the workforce in Noida was sacked, almost the same number of employees for the same low-level IT-enabled jobs logged into their systems, 676 kilometres away, in Islamabad, Pakistan.
Job cuts have plagued the Indian IT sector for about two years now and have begun to get pretty serious from the start of this year. “Bloodbath in Bangalore” has been the recurring headline. But the trend of these jobs going to techies in Pakistan is more recent. Away from all the noise of ceasefire violations and surgical strikes, where Pakistan could really hurt India is in taking away low-end IT jobs. The neighbour has a budding IT industry, growing in its own space, looking to emulate the Indian IT success story where right now data operators and BPO callers come much cheaper.