India's Tata Consultancy Was Gaming the US Visa System
bloomberg.comThe easiest way to solve this is to salary rank the H1B applicants. Those with the highest salaries get picked; not the ‘lucky ones’ that get through a lottery, which puts a PhD from MIT and a new hire at Tata from a no name school in India on equal footing. And I say this as someone who was on H1B. The current system benefits no one but these visa mills.
Edit: for grammar
Where there's a will, there's a way..
It would complicate some of these "games", but I'm sure they would implement a kickback system where the person would receive a great salary but it had a "side contract" where it would be required to pay most of it to another company, or just straight up fraud..
If you throw out every possible design because you can't detect fraud perfectly, you'll never have any solution to anything. The questions we actually need to answer are:
* Does compliance with the law create the behavior we want or does the law itself incentivize bad behavior?
* Can we reasonably detect a large enough percentage of fraud that the distortion to the system will be minimal?
On the second point, see patio11's The optimal amount of fraud is non-zero [0].
People better qualified than I am should analyze anything before we implement it, but at face value I'd guess that OP's proposal stands a good chance of being much better at both metrics than the current system (which is hardly fraud-free).
[0] https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
This would not be quite that easy to circumvent.
The main appeal of H1B abuse is cost effectiveness. If you ruin that by forcing competitive salaries (to even get the H1B in the first place), then that ruins the whole point (and companies are going to engage less in it, i.e. only when needed/"intended").
There is also a huge difference between dealing with a consultancy agency that you suspect engages in "creative visa workarounds" and straight up comitting fraud (=> higher risk, possibly even personal, makes for a much stronger incentive).
I know a scheme here in Switzerland where the company also provides lodging and services and such, for a cost of course, which cost is then deducted from the big salary thus bringing it to much lower and better palatable levels ("better" for the company doing the tricks of course). It works quite fine in IT because IT is not a protected domain, and much more difficult (not impossible though) in areas like construction - where you have unions and collective agreements.
> The main appeal of H1B abuse is cost effectiveness
Yeah but the official purpose of H1B is for companies like to hire highly skilled workers which they can’t find in the US.
Not to hire the cheapest indentured junior devs.
Absolutely; but "non-abused" H1B positions should not be affected too much, because US companies would pay competitive wages for those (presumably).
The proposal would actually help the intended H1B usecase, because it removes those "indentured junior devs" from the H1B lottery pool.
The goal of H1B isn’t to simply suppress wages for the highest paying professions, it’s to make up shortfalls. Lack of high school French teachers in Alaska can be an issue not just a lack of programmers with an AI background.
As such, if only one applicant for underwater welding is submitted the industry likely doesn’t require extra workers even if you’re willing to pay 500k/year. I’d still weight things so people paid 5x as much have 5x as likely to be picked which would discourage company’s submitting hundreds of applications for lower wage jobs.
PS: These were L-1A applications not H1B. https://en.m.wikipedia.org/wiki/L-1_visa
> salary rank the H1B applicants
This isn’t a story about H1-Bs. Changing H1-B rules won’t do anything about L-1A abuse.
A better way is to do away with the quotas to stop all the gaming around it. Switch to a price-based system by imposing a tariff on a percentage of the salary either on the company or on the worker. This would ensure a certain wage premium for local workers to ease the political pressure. This type of policy is more flexible since the tariff can vary based on the nature of the job. After a certain number of years or amount paid the worker should be eligible for permanent residency to limit the leverage companies have over these individuals.
Yeah the only way an extra tax would be fair for the worker would be to think of it like a fee for PR. Otherwise it's just discrimination.
This suggestion assumes that all H-1B applicants are highly paid technologists. While that is the majority of them, there are French immersion teachers ( https://h1bdata.info/index.php?em=&job=french+immersion+teac... ), accountants ( https://h1bdata.info/index.php?em=&job=accountant&city=&year... ) and so on that have rather average wages for where they work.
While we're often focused on technology careers here, this approach puts the new hire at Tata on uneven footing with the French teacher.
If companies want to pay a tax, say 100% of salary, because the employees skills are vital and the tax can fund education and training, I don’t see an issue.
PhD from MIT could very well earn less than a mid range developer even though they are contributing much more to the society and country. Also salary war would mean companies face pressure to increase the salary of immigrants over the citizens.
> PhD from MIT could very well earn less than a mid range developer even though they are contributing much more to the society and country.
If this is true, the supply of such people should be reduced (i.e. don't hand out H1B visas to them), so that by the laws of supply and demand the salaries increase for them.
The problem is that research is not as beneficial to the company at least in the short term. e.g. Google wouldn't be affected much if quantum computing divison is shut down, but would be affected if google ads stops showing, even though the quality of people working in former is likely higher.
The massive pressure in these Visa systems is precisely because of the opposite issue - it’s cheaper (and gives the employer more leverage) to hire from abroad than pay someone local.
Indian IT firms made about $100-120 Billion in revenue last year. That's just handling Corporate Americas IT/BPM ops. Add the rest of the worlds IT stuff and it doubles. Why will this happen if it benefits no one? This story is 30 years old now. And its not the first time the Visa system is being gamed. If you assume Corporate America saves 40-50% in salaries (usually the conservative diff in avg sal level of Indian vs American Engineer) through this route, then someone has to pay that diff to make this stop. Otherwise the incentives have not changed and there is no "easy fix".
How does this solve L1-A abuse? There are no limits and no salary restrictions on L1 visa applicants.
this posts have the same ideas over and over. I've been hearing this particular "idea" for over 2 decades every few months on HN.
rebuttal to this is that, all the visas will get gobbled up by big tech in this scheme starving out startups, hospitals , chefs ect.
IMHO anything other than making it a meritocracy wouldn't work. Just remove governmnet bureaucracy from the hiring process, abolish work visas and if you are worried about the local workers help them some other way(pay them UBI, provide them with training that can make them more valuable - I don't know what works for specific case but nationality is not a merit).
Do you know how do they game the minimum salary requirements? They pay the worker the minimum and then the worker pays back the difference over the actual salary they agreed. Depending on the jurisdiction the implementation will change.
Are you suggesting allowing unrestricted immigration as long as there is a job offer?
That is simply not going to happen in the current political climate (and not under the next government either).
The whole problem from the local workers perspective is that H1B abuse depresses local wages because they now have to compete with other workers from poorer countries; eliminating bureaucracy, government provided job training or UBI does nothing to solve that problem.
There is a reason why the H1B exists
You are trying to kill the reason make it exist
Theres nothing new here. Everyone knows, when you join outsourcing orgs in India, the goal is to go on-site. There is lot of internal politics and toxicity to be in that position to go onsite.
Recently, I have seen these orgs. do the same in europe. They are just bombarding the system with applications.
What is the motivation you ask? For billable resource, rates are different for resource when they are on-site vs off-site. Margins are better too.
This has been going on for decades and everyone in the industry knows it. Articles like these are simply propaganda to make it seem like something‘s being done about the issue.
The system is and has been completely broken and, like most of the immigration policy in the US, it is a façade with the sole purpose of providing cheap labor for US corporations. There are plentiful capable US engineers available to be hired without the need for any of these programs other than the most exclusive programs for the top 0.1% of talent in the world.
The same tired old argument is made in the unskilled immigration space as well. Companies scream that there’s no availability of workers to build houses, operate restaurants, tend farms, clean facilities, drive trucks, or virtually any other job.
Does anyone wonder why the current administration is targeting the immigrants themselves and not the employers that hire them? They know that by targeting the immigrants it looks like they’re doing something, when really they are doing little to stem the problem. This whole problem largely goes away if employers are targeted directly for abusing the system, but it will never happen because cheap labor for corporations is the true driver.
> There are plentiful capable US engineers available to be hired
An anecdote, for what it's worth:
My brother graduated from Berkeley last year (CS/Math), and has absolutely struggled to find jobs. His friends have struggled; everyone he's talked to has struggled.
Meanwhile, job postings in the Indian job market (we're both Americans, but are Indian by origin so we tend to keep up with things there) are damn-near overflowing. It's a frustrating position to be in, and it doesn't look like the current administration is going to fix anything.
> job postings in the Indian job market (we're both Americans, but are Indian by origin so we tend to keep up with things there) are damn-near overflowing
The wild part is there is a market between Indian wages and American wages for the H-1Bs.
> There are plentiful capable US engineers available to be hired without the need for any of these programs other than the most exclusive programs for the top 0.1% of talent in the world
Yes for engineers, no for a lot of low-level work. The role of AI is being overstated. But there is a cap to IT salaries given remote working’s impact on the relative cost of offshoring.
> Does anyone wonder why the current administration is targeting the immigrants themselves and not the employers that hire them?
Absolutely. That said, the American consumer probably isn’t ready for the cost of food where everyone in the supply chain is paid a minimum wage and full benefits. (Counterfactual: the Netherlands.)
> Companies scream that there’s no availability of workers to build houses, operate restaurants, tend farms, clean facilities, drive trucks, or virtually any other job.
If I hear the phrase "nobody wants to work anymore" I'm going to toss my cookies because a friend of mine just graduated with her CS undergrad, with prior management experience in an IT setting, and devops experience working through university and she is getting no interviews. Nor are many in her graduating class.
> plentiful capable
I heard from a top executive at one of the FAANGs that they are only able to fill 40-50% of their workforce from local hiring.
But, FAANG don't really hire the "visa mill" L1-A immigrants, it's usually H1-B folks that have a m.s/phd in some american university.
MS/PHD to do what? Almost all of those jobs are just basic programming positions updating websites, writing crud apps, internal tools, devops, cloud deployment, and other run of the mill typical programming tasks.
We all know the reality of these jobs requires very little (if any) of a masters or PhD level education.
Furthermore, FAANG is laying people off not hiring.
MS is done mainly to get access to the US job market. Of course some of them do use it to get into more sophisticated work.
Also, they're hiring in some divisions, firing in many divisions.
With all of the profits they're bringing in they could certainly train up people like the old industrial titans of the mid-20th century.
They don't even need to go to that extreme. Probably a majority of their qualified applicants are screened out via their leetcode and high-stress interviews. They tell congress they can't find capable employees then tell applicants they only hire the best of the best.
Yeah that's true. But I'm not sure how the costs for that will work out at scale considering software is a high attrition industry with career advancements done mostly through lateral movement.
> software is a high attrition industry with career advancements done mostly through lateral movement
If employees invest in training up employees (and more than just the standard HR pablum anybody who isn't a complete sociopath already know and the sociopaths spend their time trying to game all of the parts of the system) then the incentive will be to retain them else they will have to go through that training from scratch again on whomever they hire.
If you give people a place to work where they don't constantly feel like they're fighting fires, where they're not always begging for a raise, and where they're at an office designed to cater to the needs of employees rather than employers then you'd be surprised how long most workers will stay there.
>Articles like these are simply propaganda to make it seem like something‘s being done about the issue.
What are you referring to? The post's article is about federal lawsuits filed by former TCS employees under the False Claims Act and the subsequent investigation into the practice of fraudulently abusing L-1A visas. A couple of the lawsuits were mentioned as being promptly dismissed, with one currently being appealed. The article is not portraying the state of affairs as if the issues in the system are being dealt with, but is showing that for the most part, nothing is currently being done to stop the abuse.
Corporations exploiting cheap labor is a bipartisan issue in the US. There doesn't seem to be any knobs that can be turned to go after corporations for exploiting cheap but legal immigrant labor. What can any administration do? "You didn't break the law, but we don't like you" isn't going to stand up in court.
What the current administration is trying to do that WILL impact corporations is raise tariffs. This will raise the cost of production overseas and on-shore some business, which will increase the demand for labor domestically.
Many people argue that this will cause inflation. I don't think it will. Consumers cannot pay with more money than they have. If some country in Asia wants to sell their wares for $10 usd, and the consumer only wants to pay $9, guess what? They're only getting $9 for the goods.
Many countries are promising reciprocal tariffs, though that's what the current administration is attempting to impose. This is also great for Americans. That means corporations have to sell goods overseas for less, meaning there is less competition for their products, which means Americans can buy for less. Corporations will HAVE to accept lower margins.
It would be great if a bill could be passed to completely eliminate all white-collar immigration. We have enough talent in this country, and the other countries need it more.
Make companies pay 50% of the salary of someone on an H1B or other such work visa as an excise tax. You can spin this as reducing the debt and creating jobs for Americans. You'll see that practice dry up pretty quick.
Of course then they'll move more heavily to offshoring/remote, but at least then they're being honest that it was never about finding talent but suppressing wages.
Here's what I don't get about TCS: I worked for a local Fortune 100 company, and 20 years ago they started outsourcing IT-related jobs to TCS (and a couple smaller staffing companies). Mostly in India and South America.
Then about 10 years ago, the company dedicated almost an entire building to TCS, and TCS starting hiring contractors locally, and perhaps moved H1B's here to work on-site?
What's the next step, start hiring off-shore again?
You have to maintain certain ratio to hire locally and move h1b employees. Quite sometimes, you need client facing employee to be a local.
Also, what i have seen in europe is that, there is a mandate where in they have to publish the job locally and when they cannot find the employee, they can sponsor a visa and bring them into the country. However, what they do is, they would reject all the local candidates and claim that they could not find the candidate with right technology fit.
“The manager visas, known as L-1As, are easier for employers to obtain and have fewer guardrails; for example, they lack even the minimal pay requirements that Congress has imposed for H-1B holders.”
This isn’t a story about H-1B abuse. It’s a story about TCS avoiding even the minimal restrictions of H-1B by sending applicants through L-1A.
It's kind of interesting that Indian companies and H1-B abuse has been so cemented in people's minds that almost 80% of the comments here are about H1B abuse and what to do about it rather than the L1-A which this article is talking about. L1-A is a bigger source of fraud because there is fewer guardrails and most companies see it as a given if they want to move the employee. The only thing is you have to wait a year or so after hiring the employee to move them.
This is common knowledge. Fucking pricks should be banned. Ruining H1B prospects for many deserving candidates
> Ruining H1B prospects for many deserving candidates
Not a story about TCS abusing H-1Bs.
> Ruining H1B prospects for many deserving candidates
H1B shouldn't exist, there is no shortage of domestic talent for what amounts to standard office work. The sort of things I've seen done by H1B is nothing short of appallingly bad which makes this whole debate all the more infuriating.
Visas do exist for truly exceptional talent.
This story is missing some details about L-1 visas - most notably that you have to work for a year in an overseas office for the company that has a US office before they can use an L-1 to transfer you.
Wikipedia is useful on this: https://en.m.wikipedia.org/wiki/L-1_visa
The article talked about L1-A, not L1-B.
I've had a rule for many years: "it will be gamed, no exceptions." All systems, economies, markets, etc. will be gamed.
> I've had a rule for many years: "it will be gamed, no exceptions."
No shit. The point is figuring out how. Both to game and to be gamed.
Shocker. We've known this for 20+ years now.
So its not H1B its L1A that they gamed. Anyways, hardly the job strealing scheme its touted to be. You gotta renew it every year and should the employer fire you, you lose the visa. Not a win-win for the employee.
This manager culture is prevailing in Indian outsourcing shops. Many talented and deserving candidates are taken back and such manager community is shipped out. Because of risky H1B visa, companies retain better talent in India to fix real issues. If you are planning to source, better to travel down to India (Bangalore/Hyderabad) and meet real heroes. There is a massive talent, IC roles are waiting to bring innovative and efficient solutions.
What article states is 100% true, being involved with similar company, passed beyond my NDA agreement duration.
A coverup you say? With a paper trail? Hopefully someone goes to prison. But I doubt it.
no. shit. sherlock.
h1b abuse you say? Shocking.
TCS filed 5k H1B visa applications last year, compared to 9.5k by Amazon and 8k by Infosys. Not sure why specifically TCS is being targeted.
> New data show how TCS makes heavy use of employment visas reserved for managers. Ex-staffers say it was to get around H-1B rules.
> ...
> Kini and two other former TCS employees who filed similar lawsuits say the company repeatedly made improper use of special manager-level visas to hire front-line workers who had no management responsibilities. All three cases, which were filed under the federal False Claims Act, were dismissed before the allegations of visa fraud were examined in court; Kini’s is on appeal. The manager visas, known as L-1As, are easier for employers to obtain and have fewer guardrails; for example, they lack even the minimal pay requirements that Congress has imposed for H-1B holders.
> Kini told Bloomberg that as Trump took office eight years ago executives at TCS, an arm of the Indian conglomerate the Tata Group, were trying to make their organizational charts match their visa applications, before any federal inspectors showed up on their doorstep.
And then further down in the graphic:
> Infosys and Cognizant, two similarly sized IT outsourcers, obtained 1,289 and 1,122 L-1As respectively between 2020 and 2023.
> During the same period, TCS obtained 6,682 L-1As, the most across all US companies. That’s over five times more than the second highest recipient of L-1A visas, Infosys.
Note the use of the L-1A visa rather than the H-1B visa.
TCS is being targeted because they're abusing another visa class other than the H-1B visa.