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April 30, 2007

Offshoring Software and Confidentiality Rights Is A Bad Idea For The IT Industry

In the past the IT Industry and specially Peningo Systems Inc. have been very careful to secure the Client’s rights in works developed for the Client by the Consultants working in the development of  computer based systems as well as securing confidentiality agreements over such works. 

The larger IT corporations in America (which we refer them as  the “Prestigious Ones” ) in their efforts to engage in “Tax Evasion” by outsourcing offshore the development work  of software (The offshore developers are not subject to USA taxes and the US corporation avoid paying matching Social Security, Medicare and Unemployment Insurance),  fail to secure the Software Rights and Confidentiality, agreements that would be protected if celebrated under USA laws.

The offshore developers are not bound by USA laws, therefore, there might be some surprises to those using American Firms that have engaged offshore resources and the foreign developer may want one day to claim royalties over the software that you the “end client” have paid in full.   As customary in our USA based industry such works are contracted as belonging to the “end client”. Under the offshore circumstances it will no longer be so.

In addition, and for the same reasons stated for the Software Rights, confidentiality of the “end client” information, including that of its Customers may be compromised, as the foreign elements offshore will be free to sale such information to other organizations in the USA or world wide.

Peningo’s solution to this problem is to bypass these “Prestigious Ones”, and with the support of Peningo Systems Inc., contract directly between the consultant (a USA person) and the “end client”, thus, eliminating these “Prestigious Ones” who are failing to secure the “end client’s” Software Rights and Confidentiality and will leave the “end client” and their customers exposed to the abuses of foreign nationals who are beyond the reach of USA law.

April 20, 2007

Hooked By The H1-B / L1 Visas IT Industry "Prestigious Ones" Turn To Offshore "Tax Evasion"

There is an ongoing effort in the IT industry mainly on the part of  the “Prestigious Ones” to bring into the USA foreign nationals to work in the IT industry.  These importing of personnel under the H1-B and the L1 visas are basically motivated by cost savings as the individuals under those visas are either paid a lower salary than Americans, that result in a lower tax rate, or possibly are exempt from Social Security and Medicare taxes and the employers save a similar amount as there is no matching by the “employer”. In addition the foreign nationals are not paid prevailing wages as required by law.

Each State labor department establishes what is supposed to be prevailing wages and based on our 30 years experience in the industry those prevailing wage surveys runs about 50% to 70% below the real prevailing wages.  

American Corporations set up branches in India and then import those Indian employees under the L1 visa which is supposed to exist for the purpose of providing USA based training to foreign nationals of those corporations but in reality due to the immense numbers, really represent another source of cheap labor and evasion of USA laws.

The purpose of the H1-B is to facilitate to American Business the importing and use of exceptional talented individuals that bring to America knowledge which is exceptional or so rare that it could not be found in our IT technical labor market.

Due to the economic incentives mentioned and the lack of supervision by our government, the H1-B and L1 have been prostituted to the point that a foreign corporation (from India ) established operations in the USA and becomes the major user of H1-B visa to the degree of representing 30% plus of all H1 visas.  These foreign corporations bring the H1-B individuals to work in projects so that when they are repatriated to their country of origin will have worked for an American Clients  that would have been hooked into the cheap labor and will feel the need to outsource the jobs to that country.

We at Peningo feel that the situation of the H1-B and L1 visas have become so corrupt that the only solution is to eliminate them immediately and have a period of dialog among ourselves as to how we are going to handle and supervise the original objectives of H1-B and L1 visas.

During this period many will be surprised to find that the individuals working under the USA1 category (Americans) will turn to be the best solution for business when the laws are being followed.

We recommend bypassing the IT industry “Prestigious Ones” and having the consultant and the end client contract directly as supported by Peningo Systems Inc.

April 11, 2007

Offshoring Outsourcers Of American Jobs - Major Importers Of Third World Attitudes

The Outsoucer and the ConsultantThe American IT Corporations committed to “Globalization” and “Offshore Outsourcing” of American Jobs are mostly driven by the opportunity to engage in big time “Tax Evasion”.

The reason for outsourcing of American Jobs by these “Prestigious Ones” is the fact that the employer is getting away with retaining employees in the Offshore location at lower salaries and engaging in “Big Time Tax Evasion” as those employees do not pay Federal, State, Social Security, and Medicare tax. The employer avoids paying matching Social Security and Medicare taxes, as well as, Unemployment Insurance, while the employer uses the services of the offshore employee to support operations in the USA. If the operations were supported from  a location within the USA, the companies would be require to pay all of the Taxes.

If this is not “evil” enough, these Offshore Outsourcers are the major importers of "Third World Attitudes" toward USA IT employees. The once gracious attitudes and sense of justice toward the IT labor force has been modified to reflect the “Prestigious Ones” attitude that Americans are now at the par with Third World Economies employees.

Peningo’s solution to this problem is to bypass these “Prestigious Ones”, and with the support of Peningo Systems Inc., contract directly between the Consultant and the End Client, thus, eliminating these “Prestigious Ones” excessive Mark-ups and allowing for increased compensation for the Consultant while lowering the costs for the End Client.

Let us Outsource the Offshoring Outsourcers of jobs and Importers of deplorable Third World attitudes.



April 03, 2007

Outsourcing Of Tech Jobs Offshore Threatens The Future Of The IT Industry in the USA

Outsourcing_CharmerThe future of our IT Industry in the USA is in jeopardy due to practices of some of the more "Prestigious" names in our IT Industry. We will refer to these organizations as the "Prestigious Ones".  

The claim by the “Prestigious Ones” is that outsourcing offshore is limited to low skills technical jobs.  The way America acquired our high skills workforce was due to the opportunity to train and grow through the ranks of low skill technical jobs.

Is it possible that the “Prestigious Ones” expect our college graduates to take jobs in India to train for the high skill jobs in America?  Of course not! The fact is that they do not care as long as their excessive Margins are protected.

The  Offshoring of IT Jobs  leaves our kids, when they come out of College, with no opportunities.    If this trend is left untouched, the IT Industry and the technology that has kept America prosperous and free will be compromised.  

Peningo’s solution to this problem is to bypass the “Prestigious Ones” and contract directly with the “End Client” thus allowing the IT consultant to obtain higher rates while the “End Client” obtains a cost reduction thanks to the elimination of the “Prestigious Ones” excessive Mark-ups.

The advantage of Offshore Outsourcing is based, to a point, in the lower offshore salaries and mostly to the fact that the “Prestigious Ones” will be able to service USA based businesses with a labor force that is not burdened by the USA tax system (Federal, State, Social Security, Medicare and Unemployment Insurance).
Peningo’s approach will eliminate the “Prestigious Ones” from the USA market and obviously the need to Outsource Offshore American jobs will be eliminated.

Let us Outsource the Outsourcers of Jobs Offshore!!!!


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