Outsourcing Expert Reacts to Report on H-1B Visa Fraud

A new report that reveals a 20-percent violation rate in the nation’s H-1B Visa program has led to strong criticism of the system by outsourcing expert Ron Hira, assistant professor of public policy at Rochester Institute of Technology and author of Outsourcing America.

The H-1B program provides temporary work visas to skilled foreign workers employed in the United States. Hira argues that loopholes and lack of program oversight have allowed companies to misuse the H-1B system by paying below-market wages to foreign guest workers and facilitating the outsourcing of U.S. jobs overseas.

“I'm stunned by the high incidence, nearly one in five, of obvious fraud and serious violations in H1-B visas. That means that literally tens of thousands of these visas have been granted under false pretenses. The system has been thoroughly corrupted,” notes Hira.

“Where has the government been for the past 10 years? The H-1B program has completely spun out of control and is in desperate need of reform to ensure that both foreign and U.S. workers are treated fairly and justly.”

The report, conducted by U.S. Citizenship and Immigration Services in the Department of Homeland Security, found that one of the most common incidences of fraud is companies paying below prevailing wages or not paying workers at all.

Hira has previously contended that numerous companies have manipulated the H1-B program to facilitate their knowledge-transfer operations to ship work overseas. Companies rotate in low-cost foreign workers to learn U.S. workers’ jobs, who then take the work back to their home countries.

Hira says that rather than providing firms with workers who possess unique skills, the program is dominated by low-wage workers who provide little added value—and instead of preventing outsourcing, the program is speeding it up.

“This report makes it clear that better oversight, including an auditing function, is desperately needed to clean up the corruption,” Hira adds. “But we shouldn't forget that the major problems with the H-1B program are caused by massive loopholes that allow firms to legally pay below-market wages and force U.S. workers to train foreign replacements. Those wouldn't show up in this investigation because they are entirely legal and wouldn’t be considered fraudulent or a violation. This report has simply scratched the surface in identifying what’s wrong with the H-1B program.”

To view the full U.S. Citizenship and Immigration Services report, visit http://grassley.senate.gov/private/upload/100820081-3.pdf.