Embed Size (px)
Citation preview
On the Future of the H-1B Immigrant Visa Program
Item Type text; Electronic Thesis
Authors Clapp, Alexander Kenneth
Publisher The University of Arizona.
Rights Copyright © is held by the author. Digital access to this materialis made possible by the University Libraries, University of Arizona.Further transmission, reproduction or presentation (such aspublic display or performance) of protected items is prohibitedexcept with permission of the author.
Download date 15/07/2018 00:58:44
Link to Item http://hdl.handle.net/10150/146592
Clapp 1
ON THE FUTURE OF THE H-1B IMMIGRANT VISA PROGRAM
By
ALEXANDER KENNETH CLAPP
____________________
A Thesis Submitted to The Honors College
In Partial Fulfillment of the Bachelors degree
With Honors in
Business Management
THE UNIVERSITY OF ARIZONA
May 2010
Approved by:
_______________________________
Dr. Paul Melendez
Eller Department of Management and Organizations
Clapp 2
STATEMENT BY AUTHOR – PRINT SEPARATELY
Clapp 3
TABLE OF CONTENTS
ABSTRACT......................................................................................................................... 4
I. INTRODUCTION…………………………………………………………………....... 4
1.1 -- Summary and Organization of Thesis………………………………………............ 6
II. LITERATURE REVIEW…………………………………………………………….. 8
2.1 -- Immigration Policy from 1965-2004…………………………………………………….. 9
2.2 -- Historical Concerns Regarding H-1B Visas……………………………………….. 10
2.2.1 -- Labor and Wage Violations………………………………………………………. 10
Table 1 -- H-1B Complaints, Violations, Back Wages Due, and Fines Assessed.... 11
2.2.2 -- Protecting Domestic Employment……………………………………………. 11
Chart 1 -- Foreign-Born Immigrants as a Percentage of the Total Population
and of the Civilian Workforce……………………………………………………. 12
2.2.3 -- Homeland Security…........................................................................................ 13
2.3 -- Durbin-Grassley H-1B and L-1 Visa Reform Act...................................................... 13
2.3.1 -- Repercussions of Durbin-Grassley…................................................................ 15
III. METHODS…………………………………………………………………………... 17
3.1 -- Overview of Interviews……………………………………………………………... 17
3.2 -- The Dramaturgical Interview………………………………………………………. 18
3.3 -- Introducing the Experts…………………………………………………….............. 20
3.3.1 -- Neville W. Cramer……………………………………………………………. 20
3.3.2 -- Boverianda Nanjappa………………………………………………………... 21
IV. FINDINGS………………………………………………………………………….... 22
4.1 -- List of Interview Questions…………………………………………………………. 23
4.2 -- Expectations Regarding the Interviews…………………………………………….. 25
4.3 -- Insights from the Cramer Interview………………………………………………… 26
4.4 -- Insights from the Nanjappa Interview………………………………………………. 29
4.5 -- Post-Interview Reflections………………………………………………………….. 31
4.5.1 -- Key Issues of the H-1B Program……………………………………………... 32
4.5.2 -- Possible Solutions…………………………………………………………….. 34
V. DISCUSSION…………………………………………………………………………. 36
5.1 -- Thoughts on Thesis-Writing Process……………………………………………….. 37
5.2 -- Further Research….................................................................................................... 38
WORKS CITED………………………………………………………………………….. 40
Clapp 4
ABSTRACT
Dating back to its inception in 1990, the United States’ H-1B visa program has been
marked by intense debate. Through this program, companies are allowed to bring in non-
immigrant workers with special skills for temporary employment in specialized occupations.
The program’s intent has been to drive higher-level industries within the US by attracting the
brightest, most talented workers globally.
The first objective of this investigation is to determine the central issues regarding H-1B
policy which affect the economic development and homeland security of the US. Since these are
non-immigrant workers being allowed to enter the US, H-1B visas directly affect industry wages
and domestic employment, and they can also potentially pose a threat to homeland security. This
investigation will offer a brief history of the H-1B visa program before isolating the key issues
which will guide future reform.
The second objective of this investigation is to formulate potential areas for
improvement. The determination of reform proposals will be guided by both literature review as
well as expert interviews. Through a series of proposals, this thesis seeks to present ideas which
strengthen the original intent of the H-1B program by fostering economic development and
protecting homeland security through regulation and enforcement.
I. INTRODUCTION
While immigration policy is an area of continuous debate, the H-1B program in particular
has faced intense scrutiny since its creation in 1990. Before the system of visa classifications
which includes H-1B visas was created, the United States immigration policy focused on a quota
system guided by general preferences for immigrants. With the advent of the H-1B
classification, a separate quota was created to allow US companies to bring in immigrant
Clapp 5
workers that have special skills for temporary employment in specialized occupations.
Subsequently, the primary objective of the H-1B program has been to drive higher-level
industries within the United States by allowing its companies to attract the brightest, most
talented workers from around the world (US Government Accountability Office).
As mentioned originally, the H-1B program has proven to be a spark for intense debate in
public policy. Various events in recent history have sparked waves of backlash from
protectionists for a variety of reasons. In the early years of the program, employers took
advantage of the visa workers to pay lower wages; in turn, these abuses have led to the criticism
that hiring H-1B workers drives down wages for all workers in the affected industries. In
addition, restricting the H-1B program has been mentioned to strengthen homeland security in
response to such events as the World Trade Center attacks and the Dubai ports scandal.
Furthermore, the US economic downturn in 2003, as well as the recent recession, has
strengthened calls for restricting the H-1B program; with unemployment levels pushing 10% in
the United States, many legislators and labor unions have stepped up efforts to protect domestic
employment (Inside Counsel). Therefore, the issues of wage control, homeland security, and
economic performance have proven to be the main drivers of H-1B critics through the years.
Since the H-1B program’s inception in 1990, subsequent reforms have been introduced to
address the needs and concerns of the United States and its citizens. The cap on annual H-1B
visas grew to its highest level in 2000 at 195,000 visas; however, the amount of visas was
quickly reduced to 65,000 in 2004 amidst an economic downturn and rising unemployment in
the United States (Thibodeau 2003). When wage violations became particularly rampant, the H-
1B program was reformed to ensure that employers pay H-1B workers at least 100% of the
industry standard wage (US Department of Labor, ―Fact Sheet #62A‖). With the US economy
Clapp 6
currently re-emerging from its recession, various forms of legislation have been proposed to
protect domestic employment while promoting growth in the economy. Perhaps the most
controversial pieces of legislation is the Durbin-Grassley H-1B and L-1 Visa Reform Act; among
its proposals is a 50/50 rule which would prohibit companies from employing additional visas is
more than 50% of their US-based workforce consists of H-1B or L-1 visa holders (Sen. Durbin,
―Durbin, Grassley‖).
The proposed Durbin-Grassley legislation provides an intriguing glimpse as to how
immigration policy will be shaped for the future. Proponents of the reform bill believe that its
restrictions and stricter regulations on H-1B visas will protect domestic employment while
fostering growth in the higher-level industries of the United States. Furthermore, proponents of
the bill argue that the bill’s increased oversight of the program—through annual audits and
enhanced tracking of issued visas—holds the potential to strengthen homeland security during
the age of terrorism. However, critics of the Durbin-Grassley bill believe the bill will drastically
damage the competitiveness of the United States’ industries, cause employers to offshore more
work activity, and do little to enhance domestic employment.
This investigation will analyze the H-1B visa program to determine current issues and
future solutions. The program is vital to the continued development and success of several high-
technology industries in the US; however, inefficiencies in the program may hold adverse affects
on such aspects as industry wages, domestic employment, and homeland security. In the spirit of
economic development and protection of homeland security, the objective of this investigation is
to determine the most critical issues hindering an effectively operated H-1B visa program and
then offer potential reform solutions.
1.1 -- Summary and Organization of Thesis
Clapp 7
The remainder of this thesis is structured as follows. In Chapter II, ―Literature Review,‖
the investigation of the H-1B program begins with a brief glimpse at US immigration policy
from 1965 to 2004. After detailing the precursors of the H-1B visa program and its subsequent
development in the years following its inception in 1990, the literature review turns its focus to
historical concerns regarding the H-1B program. Among the key issues discussed are labor and
wage violations, domestic employment, and homeland security. Finally, the chapter ends by
presenting one existing proposal for H-1B policy reform, the Durbin-Grassley H-1B and L-1
Visa Reform Act, and discussing the potential repercussions of the legislation.
The original research for this investigation will consist of two personal interviews with
expert knowledge of the H-1B visa program. Consequently, the third chapter, ―Methods,‖
presents an overview of the interview process and an introduction to the expert interviewees.
The chapter begins with a brief explanation for choosing the interview research method as well
as the interview subjects. Next, the thesis offers an introduction to the dramaturgical approach of
interviewing that is used in this investigation. Finally, the chapter ends by presenting an
introduction to the experience and qualifications of both expert interviewees, Neville W. Cramer
and Boverianda Nanjappa.
The fourth chapter of this investigation, ―Findings,‖ presents the insights gained from the
interview experience before synthesizing the information together with the literature review for
general conclusions. The chapter begins by providing a list of the questions asked to each expert
interviewee respectively. Before detailing the responses given in the interviews, the next section
details the expectations for the interviews, including the specific topics and questions that should
be addressed. Next, insights from both the Cramer and the Nanjappa interviews are provided.
Clapp 8
After presenting the insights gained from the interviews, the chapter ends with a conclusion
regarding the primary issues facing the H-1B program and potential solutions.
The final chapter of the thesis, ―Discussion,‖ serves as a general reflection of the thesis-
writing process. The chapter begins with discussion of my expectations regarding the thesis
before beginning the process as well as how those expectations evolved as the thesis developed.
Next, the chapter includes some thoughts as to how I would approach the thesis differently if
given the opportunity. Finally, the chapter ends with a brief mention of some fruitful areas for
further research regarding H-1B visa policy.
This paper will analyze the entire H-1B program to determine current problems and
future solutions.. It begins with a historical overview of US immigration policy since the 1965
Immigration and Nationality Act Amendments. Next, the paper will analyze the key issues of
the H-1B program; primarily, these topics include wage control, domestic employment,
homeland security, and economic welfare. Subsequently, the paper will discuss the specific
reforms that the Durbin-Grassley legislation proposes, and then it will briefly highlight the
arguments for and against the legislation. Two interviews will be conducted from experts in
immigration policy to gather opinions regarding the H-1B visa program and the appropriate
direction for US immigration policy. Finally, the results of the interview will be summarized
before ultimate conclusions regarding the H-1B program and overall immigration policy reform
are presented.
II. LITERATURE REVIEW
The aim of the literature review is to examine all aspects of the H-1B visa program, from
the history of US immigration policy and this program specifically, to central issues, to the
potential direction which policy reform might take. The chapter begins with a brief history of
Clapp 9
the precursors of the H-1B program dating back to 1965, and then it continues by detailing the
development of the program since its inception. Next, various issues regarding the program are
discussed in detail, specifically labor and wage violations, domestic employment, and homeland
security. Finally, the chapter ends with a discussion of the Durbin-Grassley bill, which is one
direction that H-1B policy reform may take in the near future; after discussing the key
components of the bill, the investigation details some potential repercussions of the legislation.
2.1 -- Immigration Policy from 1965-2004
For much of the United States history, immigration policy was guided by a national
origins quota system, which established quotas for individual nations’ immigrants. With the
advent of the Immigration and Nationality Act Amendment of 1965, the national origins quota
system was ended; instead, annual quotas of 170,000 were set for immigrants from the Western
and Eastern Hemispheres, and a new seven-category system of preferences was used that was
―based primarily on reunification of families and needed skills‖ (Committee on the Judiciary
United States Senate, 1980). The 1965 legislation also marked the first time that visa numbers
were available to evaluate the effectiveness of immigration policy (Committee on the Judiciary
United States Senate, 1980). For the next 25 years, immigration policy using the two-
hemisphere quota system remained relatively consistent, with notable reforms mostly dealing
with tweaks to the quotas and to the preference systems.
The next major step in immigration policy came with the Immigration Act of 1990. After
the act was passed in 1990, immigration policy was reformed to allow for 700,000 immigrants
worldwide, increased employment-based immigration from 54,000 annually to 140,000, and
created a variety of visas (Committee on the Judiciary United States Senate, 1996). Most notable
Clapp 10
of the visas created was the H-1B visa; according to the US Department of Labor’s ―Fact Sheet
#62‖:
The Immigration and Nationality Act (INA) as amended by the Immigration Act of 1990
(IMMACT)…among other things, created the H-1B classification for temporary
employment of foreign workers in the United States in specialty occupations or as
fashion models. The intent of the H-1B provisions is to help employers who cannot
otherwise obtain needed business skills and abilities from the US workforce by
authorizing the employment of qualified individuals who are not otherwise authorized to
work in the United States. The law establishes certain standards in order to protect
similarly employed US workers from being adversely affected by the employment of the
nonimmigrant workers, as well as to protect the H-1B workers.
To attain an H-1B visa, an immigrant worker must be sponsored by an employer, who files an
application with Labor’s Employment and Training Administration and pays a fee. The H-1B
visa is generally valid for three years of employment (US Government Accountability Office).
From 1998 to 2003, various amendments to the H-1B visa program raised the limit of H-
1B visas permitted annually from 115,000 to 195,000 (US Government Accountability Office).
While the visas are generally valid for three years of employment, it can be renewed for an
additional three years of employment; in addition, the Justice Department Appropriations
Authorization Bill of 2002 allowed immigrants to extend the term an additional year as long as
they remained employed (Quan). In 2004, the amount of H-1B visas decreased from a limit of
195,000 to just 65,000 amidst an economic downturn, rising unemployment, and increased
outcries against the program (Thibodeau 2003). The limit of H-1B petitions approved has
remained at the level of 65,000 since 2004, although exemptions are given to graduates from US
learning institutions as well as employees of higher-education institutions (Bureau of Citizenship
and Immigration Services).
2.2 -- Historical Concerns Regarding H-1B Visas
2.2.1 – Labor and Wage Violations
Clapp 11
As the H-1B visa program has developed since 1990, various issues have been addressed
through subsequent reform. After the program was created, employers of H-1B immigrants were
not strictly regulated, and labor and wage violations grew during the first decade of the program.
Such violations were particularly rampant in the high technology sector, which brought in tens of
thousands of the skilled workers as the dot-com boom emerged (Grow). Since employers are
required to sponsor the H-1B visa workers, employers have historically been able to wield
immense power over the immigrants. As result, the amount of labor violations involving H-1B
visas in 2005 grew to 217, with over $5 million in back pay awarded to H-1B workers. Table 1
illustrates the trend in labor-law violations from 2000 to 2005.
Table 1: H-1B Complaints, Violations, Back Wages Due, and Fines Assessed (Source: US Government
Accountability Office)
Fiscal year
Number of complaints
Number of cases with violations
Amount of back wages due
(millions)
Number of employees due
back wages
Civil money penalties assessed
H-1B fiscal year cap
2000 117 93 $1.2 226 $21,000 115,000
2001 192 67 0.6 135 17,750 195,000
2002 238 210 3.8 830 48,350 195,000
2003 148 264 4.0 552 136,890 195,000
2004 158 271 4.2 390 114,125 65,000
2005 173 217 5.2 604 103,350 65,000
Total 1,026 1,122 $19.0 2,737 $441,465
Eventually, the H-1B Visa Reform Act of 2004 addressed the labor violations to protect the H-
1B workers and prevent employers from driving down industry wages. Since the legislation was
introduced, employers are now required to pay at least 100% of the industry standard wage (US
Department of Labor, ―Fact Sheet #62A).
2.2.2 -- Protecting Domestic Employment
Often times the largest criticism of the H-1B program is that US citizens are deprived of
employment opportunities by allowing foreign citizens to legally enter the job market. In
Clapp 12
making their case, critics often point out the increasing percentage of foreign-born immigrants as
part of the US workforce, as demonstrated by Chart 1:
Chart 1: Foreign-Born Immigrants as a Percentage of the Total Population and of the Civilian Workforce
(Source: Inside Counsel)
4.8
6.2
7.9
11.1
12.6
6.26.7
9.3
12.5
15.7
2
5
8
11
14
17
1970 1980 1990 2000 2007
Year
Perc
en
tag
e
Immigrants as Percentage
of Total Population
Immigrants as Percentage
of Civilian Labor
From 1970 to 2007, the percentage of immigrants in the US workforce has increased
significantly from 6.2% to 15.7%. To help appease domestic employment concerns from H-1B
opponents, the H-1B Visa Reform Act of 2004 introduced various stipulations. Included in the
legislation is the mandate that an H-1B worker would not displace any US worker in a similar
occupation. Furthermore, the legislation requires that employers make a ―good faith‖ effort to
hire a US worker for an open position, and the job must be offered to any US worker who applies
and is equally or better qualified‖ (US Department of Labor, ―Fact Sheet #62A‖).
In response to criticism of the H-1B program hurting domestic employment, proponents
of the program maintain that H-1B workers do not compete in a ―zero-sum game‖ against
Americans for employment opportunities; instead, proponents point out research by the National
Foundation for American Policy which reveals that ―employers hired four new American
workers for each new H-1B employee‖ (Sherk and Nguyen). However, one enduring
Clapp 13
employment concern is that many international outsourcing companies use the H-1B program to
place workers in US-based occupations on a short term basis; rather than the H-1B worker using
the visa as a means to attain naturalization and become a US citizen, many companies [such as
India’s Infosys, Wipro, and Tata Consulting Services (TCS)] ultimately have their employees
return to their home companies after the visa expires (Herbst).
2.2.3 – Homeland Security
Another important concern for immigration policy is the need to protect homeland
security. Especially with highly-skilled workers placed in high-technology occupations, the
potential exists for breaches of important intelligence and homeland security. An important
parallel to the H-1B debate is the Dubai Ports World controversy of 2006. In February 2006, a
British-based firm sold the management contracts for six major US ports to Dubai Ports World, a
government-owned company of the United Arab Emirates. In the wake of the announcement,
concerns mounted over the national security implications of allowing a government-owned
company from a volatile region to have access to numerous major US ports (Carafano).
Eventually, Dubai Ports World’s purchase was rejected. However, the situation carries a
semblance of the potential threat that loose regulation of H-1B could pose; if not closely
monitored, the placement of H-1B visas in specialty occupations could make the US homeland
security vulnerable to attack.
2.3 - Durbin-Grassley H-1B and L-1 Visa Reform Act
Currently, President Obama has made known that he plans a comprehensive overhaul of
the nation’s immigration laws in 2010, though he has yet to specifically mention the H-1B
program. As of now, the major existing reform proposal with the potential to affect the H-1B
program is the controversial Durbin-Grassley H-1B and L-1 Visa Reform Act. This legislation
Clapp 14
aims to limit the outsourcing of jobs to H-1B workers while strengthening regulations to reduce
fraud and abuse of the H-1B program.
Within the Durbin-Grassley, the section which applies directly to H-1B visas is Title I—
H-1B Visa Fraud and Abuse Protections. One wage stipulation of the bill states that:
Sec. 101 (a) (A) The employer—
(i) is offering and will offer to H-1B nonimmigrants, during the period of
authorized employment for each H-1B nonimmigrant, wages that are determined
based on the best information available at the time the application is filed and
which are not less than the highest of--
(I) the locally determined prevailing wage level for the occupational
classification in the area of employment;
(II) the median wage for all workers in the occupational classification in
the area of employment; and
(III) the median wage for skill level 2 in the occupational classification
found in the most recent Occupational Employment Statistics survey (Sen.
Durbin, S.887).
Thus, the Durbin-Grassley bill aims to strengthen protection against H-1Bs from driving down
industry wages by establishing minimum wage-level requirements.
To address the concerns for the protection of domestic employment, the Durbin-Grassley
bill contains some reform to the recruitment process for employers. First, the bill would require
in Sec. 101 (b)(3)(i) that an employer ―has posted on the Internet website described in paragraph
(3) for at least 30 calendar days, a detailed description of each position for which a
nonimmigrant is sought‖ (Sen. Durbin, S.887). Another requirement surfaces in Sec. 101 (e)(F),
which reads ―The employer shall not place, outsource, lease, or otherwise contract for the
services or placement of H-1B nonimmigrants with another employer unless the employer of the
alien has been granted a waiver‖ (Sen. Durbin, S.887). In this regard the bill’s proposals aim to
establish a preference for domestic workers and provide stipulations to ensure that domestic
workers are given priority consideration.
Clapp 15
The area in which the Durbin-Grassley has caused the most controversy is Section 102,
New Application Requirements. The legislation begins with stating:
(H)(i) The employer has not advertised any available position specified in the application
in an advertisement that states or indicates that—
(I) such position is only available to an individual who is or will be an H-1B
nonimmigrant; or
(II) an individual who is or will be an H-1B nonimmigrant shall receive priority or
a preference in the hiring process for such position (Sen. Durbin, S.887).
While the previous legislation appears straightforward in an attempt to prevent employers from
solely seeking out H-1B workers for US specialty occupations, the following proposal is more
radical. Section 102 continues to mandate that: ―(I) If the employer employs 50 or more
employees in the United States, the sum of the number of such employees who are H-1B
nonimmigrants plus the number of such employees who are nonimmigrants described in section
101(a)(15)(L) may not exceed 50 percent of the total number of employees (Sen. Durbin, S.887).
While most reform proposals regarding H-1B visas aim to protect domestic employment by
setting recruitment guidelines, the Durbin-Grassley ―50/50‖ rule is unique in setting minimum
percentage requirements for the overall composition of an H-1B employer’s workforce. As to
the current status of the bill, it was referred to the Senate committee, read twice, and has since
been referred to the Committee on the Judiciary.
2.3.1 -- Repercussions of Durbin-Grassley
Should the Durbin-Grassley legislation be passed into law, it will bring out a variety of
consequences for the H-1B-involved industries. Since the program’s creation, India has
dominated H-1B visas and Indian outsourcing firms have become a major player in supplying
workers to US-based specialty occupations. With the H-1B annual cap already reduced to
65,000 since 2004, H-1B visa applications greatly outnumber the limited amount permitted; in
fact, Kripalani states that every year, by the day after the US immigration department releases
Clapp 16
the H-1B, ―nearly all are snapped up by Indian tech companies.‖ Faced against the threat of
Durbin-Grassley, the Indian outsourcing giants such as Infosys and TCS will have several
options to adapt. The firms may well decide to replace their US-based outsourcing activity by
providing more work to Europe and other countries, or they may decide to cut down cumulative
outsourcing activity to focus on domestic opportunities within India. Finally, the firms could
decide to circumvent the legislation by strengthening methods of providing computer services to
US companies from offshore facilities. The last case would be the most troubling for the US;
instead of maintaining its position as a major global presence in specialty occupations, domestic
employment would remain unchanged while these specialty jobs are offshored.
Another potentially negative aspect of the Durbin-Grassley bill affects employers in H-
1B-involved industries. For US firms that currently employ H-1B workers, the legislation holds
the potential to drastically cut the available talent pool and lead to the hiring of less-qualified,
domestic workers. Recent research suggests that there is a high demand for skilled workers that
cannot be satisfied by the limited market supply of qualified domestic and H-1B workers. A
study by the National for American Policy (NFAP) has found that ―over 140,000 job openings
exist for skilled professionals in the 500 companies that make up the S&P (Standard & Poor’s)
500 (NASSCOM). If the legislation does indeed hurt the US talent pool significantly, the
phenomenon may occur that US companies ―may not get the best qualified person or even the
individual with the right set of professional skills to do the job‖ (Sherk and Nguyen).
Amidst the backlash against the Durbin-Grassley bill, and its 50/50 rule specifically, the
legislation could provide some benefits for the United States. First, the stipulations laid out in
Section 101 (a)(A) clearly lay out minimum wage levels using three different market measures;
the measures laid out in this section would go along ways in preventing US companies from
Clapp 17
abusing the H-1B program to drive down wage levels. Second, the New Application
Requirements articulated in Section 102 would establish clear recruitment procedures; through
these guidelines, companies would be forced to give equal weight to domestic and H-1B
applicants, while demonstrating a preference for the domestic worker should two applicants have
equal qualifications. Furthermore, although the 50/50 rule may appear to be drastic, it could
effectively prevent US employers from allowing H-1B visas to dominate their workforce at the
expense of qualified domestic workers.
III. METHODS
The methods chapter offers an overview of the personal interview research method as
well as an introduction to the expert interviewees. The chapter begins by discussing the reasons
why the interview method is used for the thesis’ original research. Since the interviews follow
the dramaturgical approach, the next section details important aspects of the dramaturgical
interview. Finally, the chapter ends with a brief introduction to both of the expert interviewees,
Neville W. Cramer and Boverianda Nanjappa, by listing their relevant experience and
qualifications regarding H-1B policy.
3.1 – Overview of Interviews
To further explore the nature of the H-1B program and gather insight into opposing sides
of immigration reform issue, I will conduct two personal interviews. Most of the academic
research I have gathered on the issue of H-1B reform, and the potential impact of the Durbin-
Grassley Bill, appears to reflect a general feeling that expansion of the program would help
American business and allow for economic development. On the other hand, most forms of
proposed legislation in recent years have reflected a general anti-immigration sentiment, seeking
to further downsize and/or restrict the H-1B immigration program. Therefore, I will be
Clapp 18
interviewing the president of a large IT service provider whose workforce is composed of a large
proportion of H-1B immigrants; in doing so, I will gain a better understanding of how the H-1B
program works in its current form, and I will also gain an opinion of how the program should or
should not be changed to encourage business. Also, I will interview a representative of the
Immigration and National Service (INS) to gain the government’s perspective of the issue; in
doing so, I hope to better understand the political as well as homeland security issues associated
with the H-1B program.
3.2 – The Dramaturgical Interview
The personal interviews for the two experts will be conducted in the spirit of the
dramaturgical interview. In such an interview, the simple interview is transcended to foster a
creative climate similar to a social performance; as Berg explains, ―The proposed dramaturgical
model differs most from the active interview in its emphasis on the interviewer using the
constructed relationship of the interview and subject to draw out information from the subject‖
(78). Specifically, viewing the interview as a performance suggests that the interview should
elicit the emotions of both participants in order to affect a more reflexive exchange of
information. From this dramaturgical model, I will be following a semi-standardized interview
format. Compared to a standardized interview, which follows a strict schedule of questions that
resembles a survey, the semi-standardized interview offers a greater degree of flexibility. In the
interviews there will be a schedule of questions that may be re-ordered or adapted as the
interview proceeds; as unforeseen topics are broached or as partial answers call for elaboration,
the semi-standardized format allows for the questions list to be enhanced or altered as seen fit.
Berg clarifies the nature of this interview by stating that ―these questions are typically asked of
Clapp 19
each interviewee in a systematic and consistent order, but […] the interviewers are permitted (in
fact, expected) to probe far beyond the answers to their prepared standardized questions.
In order to achieve an effective interview, there are four types of questions that will be
included: essential questions, extra questions, throw-away questions, and probing questions. As
the name suggests, essential questions are those which focus on the central subject of the
interview. Typically, they are scattered throughout the interview with the ultimate aim of
drawing specific information. Expanding on the essential questions, extra questions ―are those
questions roughly equivalent to certain essential ones but worded slightly differently […] to
check on the reliability of responses‖ (Berg 86). Next, throw-away questions are simple
demographic or general questions typically located at the beginning of interviews. While the
name may suggest that these questions are important or even a waste of time, they are important
to developing a rapport between interviewer and interviewee. Furthermore, throw-away
questions offer the interview a useful tool to cool out the subject if a sensitive are has been
broached and emotions run high. Finally, probing questions are useful tools that allow the
interviewer to elicit a more complete response from the subject; for example, probing questions
can enhance an original question that draws a short answer simply by asking ―How come?‖ or
―Why did this happen?‖ (Berg 86).
Since only two interviews will be conducted, each individual importance is extremely
crucial; for this reason, the interviews will be longer in order to elicit a complete response on the
entire list of issues and topics surrounding the H-1B program. Furthermore, because of the
increased importance of the two interviews, the best method of interviewing will be a personal,
face-to-face interview. Conducting the interviews face-to-face allows for greater interaction and
rapport between interviewer and subject, as well as the added benefit of reading any nonverbal
Clapp 20
cues. In the event that a face-to-face interview is not possible or preferable for the interviewee, a
telephone interview will be conducted. While not as effective as a face-to-face interview, the
telephone interview can still achieve a strong rapport and flow of information.
3.3 – Introducing the Experts
3.3.1 – Neville W. Cramer
The first interviewee is Neville W. Cramer, former INS Special Agent-in-Charge.
Information regarding Neville Cramer’s experience, education, and accomplishments comes
courtesy of his personal bio. He will be extremely valuable for his immigration law enforcement
expertise, particularly in relating the political and economic impact of immigration legislation.
Cramer boasts over twenty-six years experience with the federal government, specializing in
executive level leadership and training with the legacy INS. Originally, he entered the
immigration law enforcement career as a US Border Patrol Agent in Eagle Pass, Texas. Later, as
a field supervisor, Cramer was responsible for investigations relating to immigration fraud,
welfare fraud, counterfeiting of immigration documents, and alien smuggling. Additionally, he
assisted other agencies in disrupting foreign intelligence operations within the US.
Serving at INS Headquarters from 1985 to 1990, Cramer established and implemented
the Systematic Alien Verification for Entitlements (SAVE) Program, which was mandated for
nationwide use under the 1986 Immigration Reform and Control Act. Cramer’s SAVE program
eventually developed into Homeland Security’s E-Verify Program, and he was nominated for the
US Attorney General’s Award in 1988.
Cramer attended the University of Arizona for his undergraduate education, earning a
bachelor’s degree in Law Enforcement Administration; he then went on to acquire his master’s
degree in Criminal Justice from the George Washington University. Cramer is a graduate of the
Clapp 21
US Border Patrol Academy and became the first INS Special Agent selected to attend the
prestigious FBI National Academy in Quantico, Virginia.
With his considerable experience and education, Neville Cramer is an expert on the
political and economic impact of legal and illegal immigration, E-Verify employment status
verification, I-9 procedures, and passport/visa/document fraud. With Congress, he helped
promote legislation that led to the use of ―smart‖ technology to prevent passport and immigration
document fraud; in addition, he remains involved with Congress and corporate law firms on
immigration enforcement matters. Cramer has written two books concerning US immigration
challenges, including his recent Immigration Chaos. Also, he has appeared on various
nationally-syndicated television and radio programs to discuss immigration issues, including
CNN’s ―Lou Dobbs Tonight.‖
3.3.2 – Boverianda Nanjappa
The second interviewee is Boverianda Nanjappa, president of @Business, Inc., an international
IT service provider with offices in Southern California and Bangalore, India. The following
information comes courtesy of his profile at http://www.atbusiness.us. Nanjappa boasts over
thirty years of experience in all aspects of the IT field with an emphasis in telecommunication
projects management, software applications and information management applications, and
operation of complex telecommunications and computing infrastructure.
Boverianda Nanjappa was born and raised near Bangalore, India. In 1967, he completed
his Bachelor of Science in Electrical Engineering at the BMS College of Engineering in India.
Afterwards, Nanjappa entered the United States on a student visa to acquire his diploma in
Computer Science at the Institute of Computer Management in Cleveland, Ohio. Since then, his
education and training has been complemented throughout the years with various classes and
Clapp 22
seminars related to Software Development, maintenance, and production support. In 1998,
Nanjappa officially obtained his US citizenship.
Nanjappa began working in the United States in 1970 in various programming positions
for the maintenance and development of business application systems for the Consolidated
Natural Gas Company. In 1975, Nanjappa started his twenty-one year career at Southern
California Edison; he started out at as a programmer and ultimately rose through the ranks to
become the General Manager of Wide Area Network Communications and Computing Services.
After retiring in 1996, Nanjappa briefly worked for the Sceintific Applications International
Corporation (SAIC) as Assistant Vice President of Offshore Application Development.
In May 1998, Nanjappa founded @Business, Inc., which is a provider of IT services to
key clients based in the US and also manages an India office that was established in 2000.
@Business provides IT solutions to numerous companies, with Edison International, the electric
utility company, as its largest client. Established in 1998, @Business has grown over the years
to a $20 million dollar company, and the company employs numerous H-1B and L-1 immigrants
in its staff.
With his first-hand experience of US immigration laws as they have evolved over the past
forty years, Nanjappa will offer invaluable input from the side of the H-1B immigrants as well as
the purely-business side. Nanjappa employs numerous H-1B and L-1 workers primarily from
India, which happens to be the largest overall contributor of such visas into the US. Since he has
extensive experience with these workers as a service provider at @Business as well as an
executive for Edison, Boverianda Nanjappa boasts a unique perspective on the logistical and
ethical issues that arise from practical application of immigration law.
IV. FINDINGS
Clapp 23
The objective of this chapter is to synthesize the insights gained from the expert
interviews together with information offered in the literature review to isolate the central issues
regarding the H-1B program and offer potential areas for reform. First, the chapter begins by
providing the specific list of questions asked to both experts in their respective interviews. Next,
I provide various thoughts and expectations entering the interviews, together with specific topics
and questions this investigation hopes to address. Subsequently, the next section details the
specific insights gained from both the Cramer as well as the Nanjappa interviews. The chapter
ends with a synthesis of the information gained from the interviews and literature review,
resulting in discussion of key issues and appropriate future solutions for an effective H-1B visa
program.
4.1 – List of Interview Questions
The following is the list of questions given to Mr. Cramer and Mr. Nanjappa,
respectively:
Neville Cramer o As an immigration law enforcement expert, what security problems do you see
with the current H-1B visa program?
o How effective do you think current immigration policy is at preventing fraud of
specialty-occupation visas (e.g., H-1B, L-1)?
o What systems are set in place to monitor the visas awarded each year as well as
existing visas?
o Under current practices, employers of H-1B visas are required to maintain up-to-
date I-9 forms. What verification checks are currently in place to ensure alien
documents are authentic?
o What incentives are currently in place to ensure that employers maintain valid I-
9s and refrain from knowingly employing workers with invalid documents?
o In your opinion from a security standpoint, how could the H-1B program be
improved?
o Under existing policies, how would homeland security be affected by a
restriction in the H-1B program?
How would it be affected by an expansion?
What impact would these scenarios have on the economy as well as
domestic employment?
o One proposed legislation would be to include a 50/50 rule for H-1B employers,
are you familiar with that legislation (Durbin-Grassley)?
If implemented, how effectively do you think it would be enforced?
Clapp 24
Under same legislation, different proposals would change the recruitment
process. How viable do you think the proposal is from an enforcement
standpoint?
o One existing complaint/problem (depending on your side) of the current program
is that the use of H-1B workers drives down industry wages. Do you have any
opinion as to how this problem can be more adequately solved?
o Reading your book, you warn against what would happen if the current 10+
million illegal immigrants would be immediately deported. In an extreme
scenario, what would happen to higher-level industries, in which H-1Bs are
involved, if the supply of these workers were to be drastically withdrawn in a
similar manner?
o What do you think the most likely direction will be under the current
administration with regards to the H-1B program?
Direction of employer verification and monitoring?
Boverianda Nanjappa o How much experience have you had with the H-1B visa program and its related
classifications in regards to processing, employment, etc…?
o How important a role do H-1B workers play in the success of your business?
How important do you think H-1B workers have been in the
development of the IT industry and its continued development/success?
o The following questions relate your experience and knowledge of the H-1B
system:
One primary criticism of the program is that H-1B workers drive down
industry wages. In your opinion, is this a valid criticism? What
experiences can you share in this regard?
As of 2004, employers are required to pay 100% of industry
wages. From an employer’s perspective, how well is this
enforced?
Another criticism of the program is that since H-1B workers require an
employer to sponsor their visa, the employers wield significant power
over the workers and labor violations are common. In your experience,
how easy is it and how frequently do employers take advantage of H-1B
workers?
Another criticism of the H-1B program is that US citizens are deprived
employment opportunities by allowing foreign citizens to legally enter
the job market. As result, the percentage of foreign-born immigrants as
part of the US workforce has increased steadily.
In your view, do employers demonstrate a preference for H-1B
workers? Do you find this trend to be a positive or negative?
How can this trend be addressed through H-1B reform?
How effective are current regulations at encouraging domestic
employment in the IT industry?
In 2004, the annual limit on H-1B visas was lowered from 195,000 to
65,000. What effect has this decrease had on your business and the IT
industry as you see it?
What recommendations would you have for the future limit of
H-1B visas?
The Durbin-Grassley H-1B and L-1 Visa Reform Act was introduced in
April 2009 to address some of the perceived abuses of the program. Are
you familiar with the bill?
Clapp 25
One controversial proposal is the 50/50 rule. How would this
rule affect your business? What impact would it have on H-1B
employers across the industry?
In your opinion, should the H-1B program be kept as is, reformed, or
scrapped for a different program?
How should it be reformed? How would an expansion or scaling
down of the program affect the IT industry?
What other program should the government institute to better
handle the immigration of specialty workers?
What other thoughts would you like to relate about the H-1B program in
general?
4.2 – Expectations Regarding the Interviews
Entering the two interviews, I had various assumptions as to the responses I would
receive from each interviewee. Knowing that Cramer has an extensive background dealing with
immigration law stemming from his vast experience as a special agent for the INS, I expected his
responses to center on increased regulation of the program as well as decreasing the amount of
H-1B visas. Additionally, I expected Nanjappa’s perspective as an employer to be pro-business
and favor an enhanced H-1B growth with continued growth. As to my own perspective, most of
the academic research I conducted suggested that the H-1B program was essential to the growth
of the US economy, and the research also led me to believe that the program should be increased
for the country’s higher-level industries to remain competitive globally. From my research, I
believed the main issues associated with the H-1B program were economic rather than regulatory
concerns. However, I was surprised to observe the high level of agreement in the responses of
both Cramer and Nanjappa. Both individuals believe that regulation was the most important
issue related to the ongoing success of the H-1B program. Furthermore, both interviewees also
believe that the annual limit of H-1B visas should remain at its current level, if not slightly
reduced.
Through the interviews, I hoped to gain insight into how the H-1B visa program should
most appropriately run to address the economic and homeland security concerns of the United
Clapp 26
States. To that end, there are a series of questions which I hope to answer with the information
gathered from the expert interviews, including:
How are H-1Bs processed currently, and how effective is the system?
How rampant is fraud within the program?
How does the H-1B visa program affect the US economy, domestic employment,
and industry wages?
In what ways can the program be improved from regulatory, enforcement, and
business perspective?
4.3 – Insights from the Cramer Interview
Since his professional background centers on the enforcement perspective of immigration
issues, most of Cramer’s insights centered on improving the regulation and enforcement of the
H-1B program. For Cramer, the initial problem of the program is an inter-agency disconnect; H-
1B visas are issued by the US Department of State at an overseas embassy, while the initial
application is completed by the company in the United States to the US Citizenship and
Immigration Services (USCIS). Therefore, the application and issuance of H-1B visas are
handled by completely different departments with completely different interests. Furthermore,
both departments are partial to ―stove-piping,‖ which Cramer defines as each agency wanting to
secure their information and only allow limited access. Thus, the inter-agency breakdown in H-
1B visa processing activities, compounded by the uncoordinated record-keeping, severely
complicates the monitoring of visas and can frequently allow imposters to pass through.
In regards to visa fraud prevention, Cramer believes that the USCIS and Homeland
Security are ineffective. Within the past several months, the USCIS has increased its anti-fraud
division and its inspections of non-immigrant employers. However, since the inception of the H-
1B visa program, lawyers from large firms have set precedent laws governing how much
enforcement activities can be done. Effectively, these laws have become roadblocks preventing
Immigration and Customs Enforcement (ICE) from entering companies and taking action on
Clapp 27
fraudulent visas. In fact, ICE will not go after an H-1B visa worker who violates their status
unless they commit some other crime that deals with local law enforcement. Thus, while the
USCIS has set up and increased the size of its anti-fraud division, the amount of meaningful
action is relatively insignificant.
Document verification is another crucial aspect to a properly run non-immigrant visa
program, as it ensures a non-immigrant’s identity, qualifications, and eligibility to work. The
primary document that enforces this verification is the I-9 form, which an employer is required to
maintain for each employee. However, employers have minimal incentives to maintain valid I-
9s; Cramer states that the fear for companies of an ICE operation is always present, yet almost
99% of ICE operations went after corporations which employed illegal immigrants, not legal
ones such as the H-1B. One program currently available that Cramer endorses for document
verification is E-Verify. E-Verify is an internet-based system that allows employers to determine
the eligibility of an employee to work in the US using the information reported on an employee’s
I-9 form. Even though there is no charge to use the E-Verify program, Arizona is currently the
only state which requires its use by employers. If the use of the E-Verify program were to be
mandated at a national level, Cramer believes the program would be a ―tremendous solution to
the regulation of non-immigrant visas, although it would not solve fraud, since fraud comes from
the companies.‖
To improve the H-1B visa program from a security standpoint, Cramer believes that the
first step would be to ―Remove the responsibility for issuance of non-immigrant visas from the
Department of State, put the Counselor Service Division overseas under the department of
Homeland Security, and integrate all the visa issuance processes into one agency.‖ By
consolidating all visa issuance processes into a single agency, the difference of interest between
Clapp 28
the Department of State and the USCIS in the current system is eliminated, as are the parallel
records which hinder monitoring and allow for imposters. Currently, US Border Patrol has
20,000 agents which Cramer believes have not been an effective help to the issue of immigration
enforcement. Instead, Cramer advocates redirecting a portion of that manpower to create a cadre
of individuals concerned with interior enforcement; this team would profile companies believed
to be involved with fraudulent activities, engage in operations on fraudulent companies, and
make sure that each business actually exists. Furthermore, Cramer believes that the use of the
AR-11, which would require visa holders to report regularly to their local Homeland Security
office, provide a current photo and copy of immigration documents, and have a Homeland
Security officer compare and update records. Through this process, fraud would be significantly
decreased and Homeland Security would ensure that an H-1B visa holder is employed at the job
for which he was granted the visa.
Controlling industry wages serves as one of the most vital issues to improving the H-1B
program. Since employers are required to sponsor an employee’s H-1B application, a process
that costs thousands of dollars with legal fees, they hold immense bargaining power over their H-
1B workers. Because of this, kickbacks are often involved; whereas a contract might state an H-
1B worker’s wage to be $30/hr, the individual might only be paid $12/hr. To address this issue,
Cramer suggests that an H-1B visa holder not only should be required to go through E-Verify to
get a job, but if a contract calls for payment to the worker for a job, the company must prove
through income tax returns that the true wage is being paid. By requiring audits of income tax
returns for H-1B employees, the H-1B program will be able to prevent labor violations and
maintain true market wages for both citizen and non-immigrant employees. Once the issue of
wages is properly addressed, citizens will be treated fairly in the high-technology sectors in
Clapp 29
which H-1Bs are heavily involved; when a company is no longer to hire H-1Bs at below-market
wages, companies will hire H-1Bs when their expertise is required, the original intent of the
program.
Due to the nature of his background, Cramer did not have very strong opinions regarding
the economic implications of the H-1B program. However, in his view the concept that non-
immigrants like the H-1B are needed for US high-technology industries has slowly developed
over the past twenty to thirty years. At this point, the computer services industry in particular is
heavily dependent on the H-1B workforce, so removing or drastically cutting the program would
have dramatic implications for US industries. Cramer advocates the establishment of a
commission or board solely concerned with reviewing immigration visa policies and abuses
thereof. This commission would ―apolitically monitor visa numbers/categories and decide how
many non-immigrants each industry needs, down to individual companies.‖ Therefore, instead
of a fixed annual quota of H-1B visas, Cramer believes the best system would be to constantly
monitor and adjust the number of H-1B visas need to meet market demands.
4.4 – Insights from the Nanjappa Interview
Going into the Nanjappa interview, I expected his perspective as an immigrant and an
employer to translate into defending the H-1B program and advocating its expansion. However,
I was surprised to observe that while he defended the program in some instances, he also had
various criticisms. As for the importance of H-1B workers for the high-technology industries,
Nanjappa believes that only about 40-50% are actually qualified for the work. Furthermore, he
believes that with H-1B workers, ―the US does not really get their money’s worth because of
communication problems, writing skills not very good, and so on.‖ Most of the time, IT
businesses are better off hiring local graduates instead of H-1B visa holders.
Clapp 30
In addressing the concerns that H-1B workers drive down industry wages, Nanjappa’s
opinions deal with the common practice of subcontracting. In the current system, many IT
service companies bring in H-1Bs before subcontracting them to another client company.
Through this manner, the service providers can charge the client the appropriate rate for the
contracted work, but then take a substantial profit before passing on the wages to the actual H-1B
employee. Often times, an H-1B worker will be subcontracted through two or three other
companies, further decreasing the true wage the H-1B worker receives; for example, the bill rate
for an H-1B to a client may be $90/hr, but by the time that wage is passed through the various
subcontractors, the H-1B may only receive around $40/hr.
The problem with this practice is that H-1B workers have very limited ability to call for
an appropriate wage; since their visa belongs to the employer, they will not complain about their
wages for the fear of losing their job and being sent home. Although he qualifies the statement
by stating that not all companies engage in these abusive practices, Nanjappa believes that
predominantly bigger companies are able to abuse their workers due to the sheer size of the H-
1B workforce. Even though audits are supposed to address the issue, the wages paid to the H-1B
are still low; for example, the H-1B may be hired at the correct market wage, but after two to
three years the company will charge its clients more money while declining to escalate the rate
paid to the H-1B worker.
In regards to the effect the H-1B visa program has on domestic employment, Nanjappa
believes that domestic employment is hurt by the wages employers are able to pay H-1B
workers. As touched on previously, companies that bring in H-1B workers will not hire local
workers because their profit margins go down. To correct this issue, Nanjappa believes that
taxes should be more heavily incorporated into the regulation of the H-1B visa program. If
Clapp 31
companies subcontract H-1Bs to client companies, their profit should be taxed at a higher rate; in
this manner, once companies realize that they cannot increase their profit by abusing the H-1B
program, domestic employment will improve.
From Nanjappa’s perspective, the H-1B visa was originally meant to meet the needs of
companies that needed extremely technologically-skilled workers or workers with a very specific
area of expertise. Instead, the program has gradually evolved to the point where H-1Bs are used
all the time for jobs for which local workers have the same qualifications. In his opinion, the
qualifications needed for obtaining an H-1B visa are very simple now; as long as the applicant
has a university degree and a year’s worth of experience in their home country, they qualify for
the visa. Thus, Nanjappa believes that the H-1B program should enforce stricter rules regarding
the qualifications need to obtain a visa.
As far as the annual limit on H-1B visas is concerned, he does not believe that the
reduction of the quota in 2004 to 65,000 has significantly impacted the IT industry. To this
point, he points out that about 5,000 visas were left unfilled by the end of the last calendar year.
While he agrees with the spirit of Durbin-Grassley’s proposed 50/50 rule, that it will help ensure
more local hires, he has other proposals to improve the effectiveness of the H-1B program.
Under a revised H-1B program, and H-1B employer should not be allowed to engage in
subcontracting. By ensuring that the H-1B worker must work directly for a company, the non-
immigrant worker will be assured a proper market wage that can be more effectively audited.
Furthermore, by eliminating subcontracting, companies will not be inclined to hire H-1Bs
because they can obtain a higher profit margin; thus, domestic employment will be strengthened.
4.5 -- Post-Interview Reflections
Clapp 32
After completing the two expert interviews, I believe that I was able to collect answers
for most of my primary questions for the thesis. While the academic research I conducted
offered a wide-perspective glance at H-1B policy, the interviews were able to complement the
research by offering more specific information for each facet of the H-1B visa program. This
section will present the key issues that currently face the H-1B program before presenting
various proposals to improve the program.
4.5.1 – Key Issues of the H-1B Program
The first issue that arose from both my academic research as well as expert interviews
deals with the processing of H-1B visas. Currently, H-1B visa application and issuance
procedures are handled by separate government agencies with separate interests. Employers
apply for H-1B visas to the USCIS, while the visas are issued by the US Department of State.
Compounded by the fact that both agencies maintain separate records, this inter-agency
disconnect leads to inefficiencies in the program. Furthermore, since the Department of State is
primarily interested in international diplomacy, they issue visas without much regard for
qualifications of H-1B visa applications. As Nanjappa’s interview revealed, the result of this
faulty process is that, in Nanjappa’s estimation, only about 40-50% of H-1B workers are truly
qualified. Therefore, the breakdown of H-1B application and issuance processes has led to
inefficiencies in the program and the issuance of H-1B visas to unqualified workers.
Leading from the ineffective system of H-1B visa application and issuance procedures,
the H-1B visa program also faces a significant issue with fraud. The Cramer interview revealed
that it is impossible to monitor H-1B visa workers after they enter the US, and interior
enforcement in the US is extremely limited. Various precedent laws established over the last
thirty years have prevented the ability of ICE and USCIS to take action on fraudulent visas.
Clapp 33
Furthermore, the overwhelming majority of ICE operations target employers of illegal
immigrants, not H-1B and other legal immigrants; currently, a potentially fraudulent H-1B visa
will not be investigated unless there is a criminal complaint from local law enforcement. One
example of the prevalence of H-1B visa fraud is the presence of the Russian mob in Long Island,
North Miami Beach, and Glendale (California). Dating back 15 years, the Russian mob was able
to abuse the H-1B and L-1 visa program with fraudulent paperwork to enter the US and set up
various insurance scams (Cramer).
Another key problem facing the H-1B program is that the visas drive down wages in the
US high-technology industries. My academic research revealed the prevalence of labor
violations with H-1B employers; however, my research suggested that such legislation as the H-
1B Visa Reform Act of 2004 began to address the issue by requiring employers to pay H-1B
workers at least 100% of the industry standard wage. While the legislation seems to address the
wage issue on paper, my expert interviews revealed that enforcement of the wage requirements is
extremely ineffective. The Cramer interview revealed that since an employer sponsors a non-
immigrant worker and controls their H-1B visa, they wield immense bargaining power. Many
companies prefer hiring an H-1B employer simply because they can pay that worker lower
wages than they would be required to pay a US citizen; in addition, the companies frequently
engage in this activity without concern of repercussions because of various legal roadblocks
which prevent auditing. Another facet of the wage control issue is the popular practice of
subcontracting for H-1B visa workers. Nanjappa’s professional experience revealed that many
firms pursue H-1B workers because they can subcontract the worker multiple times, with
kickbacks resulting in higher company profits and lower wages for the H-1B worker. The ability
Clapp 34
to pay H-1B workers lower wages also directly impacts domestic employment, as US citizens are
negatively affected.
Most of my academic research suggested that the US high-technology industries benefit
significantly from the H-1B visa program, and most of the literature recommended raising the
annual H-1B quota back to its pre-2004 level of 195,000 per year. The explanation given by
most sources claimed that H-1B visas are necessary for the US to bring in the most qualified
workers and keep the high-technology industries competitive on a global scale. After
complementing the research with expert interviews, I still believe that the H-1B program is vital
to the continued development of high-technology industries in the US. However, the demand for
H-1B workers is skewed by the ability of employers to hire H-1B workers at lower wages.
Furthermore, the demand for H-1B workers can shift dramatically for various reasons; for many
years, the 65,000 annual quota was filled within a few days, yet the quota was left unfilled in
2009. For these reasons, a fixed quota does not effectively meet the true demands of the market.
4.5.2 – Possible Solutions
After isolating the key issues facing a properly run H-1B visa program, this section aims
to guide future reform. The Durbin-Grassley is one proposed legislation that has received much
publicity recently, and my research into the H-1B program reveals an intense debate over its
various reform proposals. The 50/50 rule in particular, which aims to protect domestic
employment, has been heavily discussed in academic literature. After conducting the Cramer
interview, I believe that the legislation is not the best way to reform the H-1B visa program and
protect domestic employment. The main concern with the reform bill is that it does very little to
address how the legislation will be adequately enforced. As mentioned earlier, interior
enforcement with regards to wage controls and visa fraud is ineffective at this time. Instead, I
Clapp 35
believe that wage control and visa fraud must be properly enforced in order to promote domestic
employment.
I believe the first step towards creating a more effective H-1B program that promotes
economic development and strengthens homeland security is the integration of all H-1B visa
issuance processes into a single agency. Whether it is run under the USCIS, Homeland Security,
or a new agency, the integration of visa issuance process will improve qualification verification,
visa monitoring, as well as record-keeping. The current inter-agency breakdown between the US
Department of State and the USCIS easily allows for visa fraud, and the parallel record-keeping
hinders visa verification and monitoring. Therefore, the integration of H-1B visa issuance
processes will improve the ability of the US to verify the identity of a non-immigrant worker and
protect fraudulent visas from threatening homeland security.
Another step towards protecting homeland security through the H-1B visa program is
improving interior enforcement. As discussed previously, through such means as lack of
manpower or legal roadblocks, very monitoring of H-1B visas currently takes place. First, I
believe the E-Verify program should be implemented at a national level. Using this program, the
US will be able to verify employment eligibility and prevent visa fraud. Furthermore, since the
program has already been developed and is free for every state, the program will not bear
significant additional costs. In addition, visa fraud will only be prevented if the government is
truly able to monitor H-1B employers and take action when fraudulent activity is suspected.
Therefore, I strongly agree with Cramer’s recommendation of redirecting manpower from the
US Border Patrol (currently 20,000+ officers) into creating a cadre of individuals to profile H-1B
employers suspected of fraudulent activities. Subsequently, this team will investigate and take
direct action on the fraudulent activity
Clapp 36
Beyond visa fraud, I believe that wage control is the central issue facing an effectively
run H-1B visa program. Currently, the ability of employers to pay H-1B workers lower wages
negatively impacts not only the non-immigrant worker, but it also affects the ability of US
citizens to attain employment in high-technology industries. As both Cramer and Nanjappa
agree, the best way to monitor wages and ensure that H-1Bs are paid 100% of market wages is
through income tax audits. H-1B employers must be required to show through income tax
returns that the appropriate wage is being paid. Furthermore, I believe that H-1B workers must
be required to work directly for the employer which owns the visa; by eliminating
subcontracting, kickbacks will be eliminated and H-1Bs will receive their true wage.
Subsequently, by properly enforcing wage control, US citizens will be treated equally in the
candidate pool, and domestic employment will improve as a result.
Finally, the H-1B visa program would benefit immensely from the creation of a
commission that solely reviews immigration visa policies. As Cramer advocates, this
commission would review visa policies, abuses of those policies, and lead reform. Apolitically,
this commission would make policy reform and control visa quotas. Ideally, the commission
would be able to monitor visa applications by number and category to determine how many non-
immigrant visas are needed each year. In doing this, the fixed quota system for H-1B visas
would be eliminated; since the demand for H-1B visas fluctuates constantly, the commission
would be able to gauge how many visas are appropriate for the continued economic development
of the US high-technology industries.
V. DISCUSSION
The concluding chapter of this investigation serves as an overall reflection on the thesis-
writing process. The chapter begins with my own thoughts entering the process as well as a
Clapp 37
reflection on how my perspective shifted as the investigation progressed. Next, I mention some
specific ways in which I would approach the thesis-writing process differently if given the
opportunity. Finally, the thesis concludes with a mention of fruitful areas for future research
regarding H-1B policy.
5.1 -- Thoughts on Thesis-Writing Process
Entering the thesis-writing process, my limited familiarity with the H-1B visa program
stemmed from my experience as a summer intern for Nanjappa’s IT service company,
@Business, Inc. Through my administrative role for @Business, I was able to observe how
many H-1B non-immigrants were involved in the IT industry. Furthermore, in the Fall 2009
semester I enrolled in a course on Professional Outsourcing and Offshoring at the University of
Arizona. For this class, I began researching outsourcing in the IT industry, with a focus on how
the IT industry has come to rely on H-1B visas for a large portion of its workforce. From this
initial work and classroom experience, I developed a positive view on the H-1B program.
However, I also noted how the H-1B program has become a sparkplug for debate on US
immigration policy. In particular, the Durbin-Grassley seemed to spark much academic debate
as to the future of the H-1B program. Therefore, I embarked on my thesis on the H-1B visa
program with the Durbin-Grassley bill as my initial starting point.
Most of the academic research I conducted centered on the economics of the H-1B policy
debate. The key issues brought up in my research were wage control, domestic employment,
homeland security, and the Durbin-Grassley H-1B and L-1 Visa Reform Act. After reviewing
most of the literature, my first inclination was believing that proper measures were in place to
protect wages and domestic employment, and that the program should be expanded to continue
development of high-technology industries in the US. However, I found very little attention to
Clapp 38
enforcement concerns through the academic literature I reviewed. Thus, I was surprised to see
the extent of visa fraud and interior enforcement deficiencies that Cramer indicated in his
interview. Furthermore, I was also surprised by the Nanajappa interview to see how his
employer’s perspective had many concerns regarding the regulation of the H-1B program. Both
individuals advocated for enhanced regulation and against an expansion of the H-1B program.
Therefore, my perspective on the H-1B program changed dramatically after the expert
interviews; instead of my initial economic focus for H-1B visa program reform, I came to realize
that future reform should focus on homeland security and interior enforcement.
If I were to start the thesis experience over again, I would have focused on the regulatory
and enforcement issues of the H-1B program from the beginning. While homeland security was
one of my key issues from the beginning of the process, I did not realize the significance of H-
1B visa regulation and enforcement until conducting my expert interviews. Most of the key
economic issues that I did focus on from the start, such as wage control and domestic
employment, were closely tied to regulation and enforcement. However, I do believe that my
economic focus was a direct result on the availability of academic literature on the H-1B
program; most of the literature came from academic journals or think-tanks which were
primarily concerned with overall economic policy.
5.2 -- Future Research
In terms of further research, I believe more attention should be given to the regulatory
and enforcement practices for the H-1B program. From Cramer’s estimation, 99.9% of ICE
operations went after corporations that employed illegal immigrants, not legal immigrants like
the H-1B. Thus, I would be interested to see how many operations have actually investigated
fraudulent activities of H-1B employers, especially after the USCIS increased its anti-fraud
Clapp 39
division this last year. Also, I would be interested to learn more about the disconnect in visa
application and issuance processes from the US Department of State and USCIS; since the
organizations keep separate records, it would be interesting to see how significantly this
disconnect affects visa fraud and monitoring issues. As the Obama administration has stated
plans for a complete overhaul of immigration policy, I expect the H-1B program to continue to
receive significant attention in the near future.
Clapp 40
WORKS CITED
Berg, Bruce L. Qualitative Research Methods for the Social Sciences, 5th
Edition. Pearson:
Boston, 2004.
Bureau of Citizenship and Immigration Services. ―Characteristics of Specialty Occupation
Workers (H-1B).‖ 1 May 2009. Accessed 16 December 2009
<http://www.uscis.gov/USCIS/New%20Structure/2nd%20Level%20(Left%20Nav%20Pa
rents)/Resources%20-
%202nd%20Level/h1b_fy08_characteristics_report_01may09.pdf>.
Carafano, James Jay, Ph.D. ―Securing the Home Front.‖ 10 July 2007. The Heritage
Foundation. Accessed 17 December 2009
<http://www.heritage.org/Press/Commentary/ed071107a.cfm.
Committee on the Judiciary United States Senate. History of the Immigration and Naturalization
Service. December 1980. LexisNexis Congressional. Accessed 16 December 2009
<http://www.lexisnexis.com.ezproxy2.library.arizona.edu/congcomp/getdoc?CRDC-
ID=CRS-1980-EPW-0051>.
Committee on the Judiciary United States Senate. Legal Immigration Act of 1996. April 1996.
LexisNexis Congressional. Accessed 16 December 2009 <http://web.lexis-
nexis.com.ezproxy1.library.arizona.edu/congcomp/document?_m=2e358a1325e068c87b
ee180a6f355462&wchp=dGLzVtb-
zSkSA&_md5=7af2f532768c95b17fe2e097c4472f71>.
Cramer, Neville W. Personal Interview. 23 February 2010.
Grow, Brian. ―Skilled Workers—Or Indentured Servants?‖ 16 June 2003. BusinessWeek, issue
3837, p. 54-55. Academic Search Complete. Accessed 16 December 2009
<http://ezproxy.library.arizona.edu/login?url=http://search.ebscohost.com/login.aspx?dire
ct=true&db=a9h&AN=9996021&site=ehost-live>.
Herbst, Moira. ―Work Visa Bill Threatens Indian Outsourcers.‖ 4 June 2009. BusinessWeek
Online, p. 16. Academic Search Complete. Accessed 3 November 2009
<http://ezproxy.library.arizona.edu/login?url=http://search.ebscohost.com/login.aspx?dire
ct=true&db=a9h&AN=42008670&site=ehost-live>.
Inside Counsel. ―Policy Puzzle.‖ July 2009, vol. 20, issue 211, p. 42-52. Business Source
Complete. Accessed 16 December 2009
<http://ezproxy.library.arizona.edu/login?url=http://search.ebscohost.com/login.aspx?dire
ct=true&db=bth&AN=43493236&site=ehost-live>.
Kripalani, Manjeet. ―Is the Party Over for Indian Outsourcers?‖ 7 August 2007. BusinessWeek
Online, p. 26. Academic Search Complete. Accessed 17 December 2009
Clapp 41
<http://ezproxy.library.arizona.edu/login?url=http://search.ebscohost.com/login.aspx?dire
ct=true&db=a9h&AN=26137064&site=ehost-live>.
Nanjappa, Boverianda (Raghu). Personal Interview. 7 April 2010.
NASSCOM. ―Research.‖ April 2008. NASSCOM Newsline, issue 77. Accessed 17 December
2009 <http://www.nasscom.in/Nasscom/templates/NormalPage.aspx?id=53905>.
Quan, Margaret. ―H-1Bs Now Can Stay Longer.‖ 18 November 2002. Electronic Engineering
Times, Issue 1245, p. 101. Academic Search Complete. Accessed 16 December 2009
<http://ezproxy.library.arizona.edu/login?url=http://search.ebscohost.com/login.aspx?dire
ct=true&db=a9h&AN=8508697&site=ehost-live>.
Sen. Durbin, Dick. ―Durbin, Grassley Introduce Legislation to Reform H-1B Visa Program.‖ 23
April 2009. Accessed 16 December 2009
<http://durbin.senate.gov/showRelease.cfm?releaseId=311910>.
Sen. Durbin, Richard. S.887 H-1B and L-1 Visa Reform Act of 2009. 23 April 2009. Library of
Congress. Accessed 17 December 2009 <http://thomas.loc.gov/cgi-
bin/query/z?c111:S.887:>.
Sherk, James and Nguyen, Diem. ―Restricting H-1B Visas is Bad for Business and the
Economy.‖ 13 May 2009. The Heritage Foundation. Accessed 17 December 2009
<http://www.heritage.org/Research/HomelandSecurity/wm2440.cfm>.
Thibodeau, Patrick. ―H-1B Visa Count Down, Anger Up.‖ 3 February 2003. Computerworld,
vol. 37, issue 5, p. 7. Academic Search Complete. Accessed 16 December 2009
<http://ezproxy.library.arizona.edu/login?url=http://search.ebscohost.com/login.aspx?dire
ct=true&db=a9h&AN=9112588&site=ehost-live>.
US Department of Labor. ―Fact Sheet #62: What Are the Requirements to Participate in the H-
1B Program?‖ July 2008. Catalog of US Government Publications. Accessed 16
December 2009 <http://www.dol.gov/whd/regs/compliance/FactSheet62/whdfs62.pdf>.
US Department of Labor. ―Fact Sheet #62A: Changes Made by the H-1B Visa Reform Act of
2004.‖ 2008. Catalog of US Government Publications. Accessed 16 December 2009
<http://www.dol.gov/esa/whd/regs/compliance/FactSheet62/whdfs62A.pdf>.
US Government Accountability Office. H-1B Visa Program: More Oversight by Labor Can
Improve Compliance with Program Requirements). 22 June 2006. Catalog of US
Government Publications. Accessed 16 December 2009
<http://frwebgate.access.gpo.gov/cgi-
bin/getdoc.cgi?dbname=gao&docid=f:d06901t.pdf>.
