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July 28, 2007

Myth About Consulting Jobs Versus Permanent Jobs in an H1-B - Outsourcing Influenced World


 In an effort to reduce costs of fielding consultants the Major IT Consulting organizations, which we refer as “The Prestigious Ones”, offer “Permanent Employment” with “Benefits” which comes with a low salary.

Anyone offering “Permanent Employment with Benefits” for consulting assignments is taking the consultant for a ride.  The reality is that consulting assignments have a beginning and an end.  For these reasons the ultimate Clients are willing to pay a substantial premium over the cost of their own employees.  When the assignment is over, the Consulting organizations will make every effort to have the employee transferred to another assignment, but such propositions are not based on certainty but in the hope that the exploitation may be able to continue.  When this fails, the Consultant finds themselves dismissed.

Every Consultant should expect premium compensation in their hourly rate instead of salary (salary employees work many overtime hours without compensation) and that hourly rate should include an amount taking into consideration the costs of self provided benefits, the fact that there are gaps in moving from one assignment to another and that there should be a premium for the difficult life (family wise) of a consultant that needs to travel away from home.   To settle for less means that someone is exploiting the Consultant as the organization will keep the premium for his/her sacrifices.
 

It is important for the Consultant to pay for their own “Benefits” as when they move to the next assignment it might not be with the same organization that provided the previous assignment.  By doing this the Consultant expand its Market and make it possible to achieve substantial earnings in keeping with the effort.
 

To make things worse the “Prestigious Ones” are attempting to replace the USA based Consultant by outsourcing offshore work which services the USA based clients. 

Blown Offshore to Mysore 
Obviously this is tax evasion as the offshore resources do not pay any Federal, State, Social Security or Medicare and the organization hiring do not have to match the Social Security and Medicare taxes  as if the work was performed by a USA based person.

We founded Peningo Systems to combat this problem of multiple layers of markups that ends up in between consultant and the end client. 

Peningo Systems solution to this problem is to bypass these “Offshore Outsourcers” 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.

With the Outsourcing IT Jobs OffShore and/or using employees who are H1-B Visa or L-1 Visa holders, many times the cost of “Services” to the “End Client” is slightly effected. Between huge markups by some of the Larger Outsourcers and/or the combination of multiple layers of subcontractors involved in providing the IT Services with their respective markups, the cost to the “End Client” is still high. All the Offshoring of IT jobs and hiring of H-1Bs & L-1 Visa holders offers is higher profit margins for the Outsourcers…….WHILE PROVIDING LOWER QUALITY OF SERVICE TO THE END CLIENT!!! It is very true the old saying that Power corrupts and that Absolute Power absolutely corrupts. It is time for the Consultant and the End Client to bypass these “Prestigious Ones” which every day are looking more like ruffians and knaves.



 
To All Americans: 

If you wish to voice your opinion, you are welcome in commenting to this post. If you wish to voice your opinion to a greater authority….Congress and/or your State Representatives, please go to the Peningo Advocacy Assistance Page.

July 18, 2007

Support the H-1B and L-1 Visa Fraud and Abuse Prevention Act of 2007

GRASSLEY AND DURBIN INTRODUCE FIRST BIPARTISAN H-1B, L-1 VISA REFORM BILL TO PROTECT AMERICAN WORKERS   

 

WASHINGTON, DC - U.S. Senators Chuck Grassley (R-IA) and Dick Durbin (D-IL) introduced "The H-1B and L-1 Visa Fraud and Abuse Prevention Act of 2007" to overhaul the H-1B and L-1 visa programs to give priority to American workers and crack down on unscrupulous employers who deprive qualified Americans of high-skill jobs.

Uncle Sam is on to you Outsourcers

The H-1B visa program allows American companies and universities to employ temporary foreign workers who have the equivalent of a U.S. bachelor’s degree in a job category that is considered    by the U.S. Citizenship & Immigration Services to be a "specialty occupation".  The L-1 visa program allows companies to transfer certain employees from their foreign facilities to their U.S. facilities for up to seven years.


“Our immigration policy should seek to complement our U.S. workforce, not replace it,” Durbin said. “Some employers have abused the H-1B and L-1 temporary work visa programs, using them to bypass qualified American job applicants.  This bill will set up safeguards for American workers, and provide much-needed oversight and enforcement of employers who fail to abide by the law.”

 

"This is about protecting the American worker,” said Senator Grassley.  “We're closing loopholes that employers have exploited by requiring them to be more transparent about their hiring and we're ensuring more oversight of these visa programs to reduce fraud and abuse.  A little sunshine will go a long way to help the American worker."

 

Provisions of the Durbin-Grassley bill would change existing law in the following ways:

Currently, the H-1B visa program is criticized for failing to protect American workers.

  • Under current law, only employers that employ H-1B visa holders as a large percentage of their U.S. workforce are required to pledge that they have attempted to find American workers before bringing in foreign workers.  The Durbin-Grassley bill would require all employers seeking to hire an H-1B visa holder to pledge that they have made a good-faith effort to hire American workers first and that the H-1B visa holder will not displace an American worker.
  • The Durbin-Grassley bill would require that before an employer may submit an H-1B application, the employer must first advertise the job opening for 30 days on a Department of Labor (DOL) website.  DOL would also be required to post summaries of all H-1B applications on its website.
  • The Durbin-Grassley bill would require that H-1B employers may not advertise a job as available only for H-1B visa holders or recruit only H-1B visa holders for a job.
  • The Durbin-Grassley bill would prohibit employers from hiring H-1B employees who are then outsourced to other companies. This is a method that some companies use to evade restrictions on hiring H-1Bs.


Currently, so-called “job shops” hire large numbers of foreign workers on H-1B visas for short time periods to train and then outsource these workers offshore.


  • The Durbin-Grassley bill would prohibit companies from hiring H-1B employees if they employ more than 50 people and more than 50% of their employees are H-1B visa holders.

 

Currently, the Department of Labor lacks sufficient oversight and investigative authority over the H-1B program.

  • The Durbin-Grassley bill would give DOL the ability to conduct random audits of any company that uses the H-1B program, and would require DOL to conduct annual audits of companies with more than 100 employees that have 15% or more of those workers on H-1B visas.
  • The Durbin-Grassley bill would give DOL authority to review employers’ H-1B applications for “clear indicators of fraud or misrepresentation of material fact.” Currently, DOL is only authorized to review applications for “completeness and obvious inaccuracies.”
  •  The Durbin-Grassley bill would give DOL 14 days to review H-1B applications, instead of the seven days currently permitted.
  • The Durbin-Grassley bill would give DOL more authority to conduct employer investigations and streamline the investigative process by, among other things, permitting DOL to initiate its own investigations and eliminating the requirement that the DOL Secretary personally authorize an investigation.
  •  The Durbin-Grassley bill would require the Department of Homeland Security (DHS) to share with DOL any information in H-1B visa applications indicating that an H-1B employer is not complying with program requirements.
  • The Durbin-Grassley bill would strengthen existing whistleblower protections for the H-1B program and establish whistleblower protections for the L-1 program.
  • The Durbin-Grassley bill would authorize the hiring of 200 additional DOL employees to administer, oversee, investigate and enforce the H-1B program.



Currently, the H-1B and L-1 visa programs are criticized for making it possible for companies to hire foreign workers at lower wages and with fewer rights than Americans, in turn creating incentives for companies to avoid hiring Americans.


  • The Durbin-Grassley bill would require H-1B and L-1 employers to pay employees the prevailing wage to ensure employers are not undercutting American workers by paying substandard wages to foreign workers.
  • The Durbin-Grassley bill would require the government to provide H-1B visa holders with information about their rights.
  • The Durbin-Grassley bill would require H-1B employers to provide an H-1B employee’s immigration documents to the employee upon request. 


Under current law, experts argue that employers can use the L-1 program to evade restrictions on the H-1B program because the L-1 program does not have an annual cap and does not include protections for American workers.  As a result, efforts to reform the H-1B program are unlikely to be successful if the L-1 program is not reformed at the same time.

 

  • The Durbin-Grassley bill would limit issuance of L-1 visas for employees of a “new facility” to an initial period of 12 months, which can be extended after the employer demonstrates that the new facility is legitimate.
  • The Durbin-Grassley bill would prohibit so-called “blanket petitions” for L-1 visas, requiring employers to submit a separate application for each L-1 visa. 
  •  The Durbin-Grassley bill would prohibit the outplacement of L-1 visa holders.
  •  The Durbin-Grassley bill would establish a process for DOL to investigate, audit and penalize L-1 employers.

 

Peningo Systems supports the efforts of U.S. Senators Chuck Grassley (R-IA) and Dick Durbin (D-IL). We feel that they are on the right track in addressing the abuses in these programs that in turn destroy opportunity for Americans in the IT Industry.

Bill has a dreamWith the Outsourcing IT Jobs OffShore, and/or using employees who are H1-B Visa or L-1 Visa holders, many times the cost of “Services” to the “End Client” is slightly effected. Between huge markups by some of the Larger Outsourcers and/or the combination of multiple layers of subcontractors involved in providing the IT Services with their respective markups, the cost to the “End Client” is still high. All the Offshoring of IT jobs and hiring of H-1Bs & L-1 Visa holders offers is higher profit margins for the Outsourcers…….WHILE PROVIDING LOWER QUALITY OF SERVICE TO THE END CLIENT!!! It is very true the old saying that Power corrupts and that Absolute Power absolutely corrupts. It is time for the Consultant and the End Client to bypass these “Prestigious Ones” which every day are looking more like ruffians and knaves.

We founded Peningo Systems to combat this problem of multiple layers of markups that ends up in between consultant and the end client.

Peningo’s solution to this problem is to bypass these “Offshore Outsourcers” 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.

If you wish to voice your opinion, you are welcome in commenting to this post. If you wish to voice your opinion to a greater authority….Congress and/or your State Representatives, please go to the Peningo Advocacy Assistance Page

 

 

 

July 16, 2007

Media should focus on L-1 Visa Abuses by Large IT Outsourcing Firms

Unfortunately, in the mass media today, there are very few who see and are willing to report on the injustice, abuses and corruption that is behind the motivation of the movement to Outsource IT jobs Offshore. Lou Dobbs is one of the few that for years, has stood out of the crowd, defending the Middle Class of America.

 

Recently, an immigration law firm posted a video of their techniques to avoid hiring Americans, thus skirting the intent of the law, in order to bring in foreign workers on H1-B. The abuses of the H1-B Visa program has been going for years, and is just another dimension on this attack on the Middle Class of America. In the video below, Lou Dobbs takes on the H1-B issue:

 

While the H1-B abuses are real and truly harm opportunity for Americans, I would like for Lou Dobbs to open his eyes to another dimension that is more dangerous to the American Middle class, and that is the use and abuse of the L-1 Visa program. In my opinion the “Prefect Storm” that is currently attacking the IT Industry is the combination of the L-1 Visa and Outsourcing IT Jobs Offshore.

I have been in the business of providing IT Consultants for 20 years, so I have seen it all. One of the outrages is that a Foreign Corporation who is one of the largest Outsourcers of IT Jobs Offshore in year 2006 had approximately 4000 H-1B Visas and approximately 4000 L-1 Visas, for a total of 8000 new Visas in the USA for just year 2006. The majority of these Visas went to workers from India. While the H-1B Video shows clear abuse in terms of avoiding the “Intent” of the Law, the abuses in the L-1 Program, in my opinion, are more rampant than you’ll find in the H1-B program.

 

I am planning on requesting an Amendment to be added to the Immigration bill. I feel that my proposal should become America’s Proposal. I would like to have the Amendment referred to as the “H1-B and L-1 Visa Social Security and Medicare Recovery Amendment”.

 

In order to bring some equity back to the American tax paying workers, we at Peningo Systems would like to propose the following as the “H1-B and L-1 Visa Social Security and Medicare Recovery Amendment”:

- Any company that hires an H1-B or an L-1 Visa to work in the United States must pay a tax that is equal to 100% of the “Employer and Employee” portion of the Social Security and Medicare tax. This is important, since it takes away one of the “MAIN” incentives to fire an “AMERICAN WORKER” and replace them with an H1-B or L-1 Visa based worker. As it is, some of the H1-Bs, L-1s and their respective employers could be EXEMPT FROM PAYING SOCIAL SECURITY AND MEDICARE TAX! Also, many companies pay the employees on these Visas far less than an American, resulting in a lower tax overhead for the companies. Also by placing 100% of the FICA obligations on the company, even if the Visa holder is being paid less than the Americans, it gives some insurance that the hiring of such individuals is not strictly based on “Cost of Labor”. This Proposal is also very important, since it addresses an issue that is near and dear to every American, and that is, supporting Social Security.

 

- To combat the abuse of low pay to the H1-B and L-1 Visa holder, which results in the under cutting of the American based worker, which is a violation of the letter of the law, the Federal government must come up with a “Up To Date” Salary survey that would accurately reflect what an American actually would get in the free market place. Then the H1-B or L-1 Visa holder MUST be paid in the UPPER 10% of the Salary range…that’s right…. the H1-B or L-1 MUST be paid in the UPPER 10% of the Salary range. This would insure that H1-B and L-1s are treated, in terms of cost, the same as an American and that the H1-B and L-1 Visa holder is truly a talent that is needed! Also, to combat the “Tax Evasion” aspect of these programs, by paying the Visa Holder in the upper range of the Salary Survey, the “Tax” base that the Employee is being paid at would be in par with what Americans pay. Let’s remember the “Spirit” of these Visa programs is to bring talent that cannot be found in the USA marketplace. If this is truly the case, then in the free market, these individuals should command a higher salary than Americans, since they are “SO SPECIAL”. Unfortunately, they only special quality most of these Visa holders have over Americans is that they “ARE CHEAPER” than Americans.

 

If we implement these 2 proposals, then the H-1B and L-1 would compete with an American based worker on the merits of his/her abilities and not solely based on the fact that the H1-B’s or L-1’s resume looks good and the H1-B or L-1 is 10s of thousands of dollars cheaper than the American. This is a fair way to bring equity back into the US as well as protect our Tax Base from these Tax Evading scheme of hiring foreign workers and avoid paying for Social Security and Medicare tax.

 

With the Outsourcing IT Jobs OffShore and/or using employees who are H1-B Visa or L-1 Visa holders, many times the cost of “Services” to the “End Client” is slightly effected. Between huge markups by some of the Larger Outsourcers and/or the combination of multiple layers of subcontractors involved in providing the IT Services with their respective markups, the cost to the “End Client” is still high. All the Offshoring of IT jobs and hiring of H-1Bs & L-1 Visa holders offers is higher profit margins for the Outsourcers…….WHILE PROVIDING LOWER QUALITY OF SERVICE TO THE END CLIENT!!! It is very true the old saying that Power corrupts and that Absolute Power absolutely corrupts. It is time for the Consultant and the End Client to bypass these “Prestigious Ones” which every day are looking more like ruffians and knaves.

 

We founded Peningo Systems to combat this problem of multiple layers of markups that ends up in between consultant and the end client. Peningo’s solution to this problem is to bypass these “Offshore Outsourcers” 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. Lou Dobbs is a hero, since he is one of the few who is willing to stand up a fight for the American worker. I think to complete the coverage of this circle of this attack on America, Lou Dobbs needs to focus on the IT Industry’s “Perfect Storm”, the combination of the L-1 Visa Program with Outsourcing IT Jobs Offshore and its effect on taking opportunity away from America and cheating every American. If you wish to voice your opinion, you are welcome in commenting to this post. If you wish to voice your opinion to a greater authority….Congress and/or your State Representatives, please go to the Peningo Advocacy Assistance Page

http://www.peningo.com

July 14, 2007

Shocking H1-B Video may result in H1-B Reform Bill with no Quota Increase

I have been in the business of providing IT Consultants for 20 years, so needless to say, I have seen it all. The recent H1-B Video of the Immigration Law firm’s procedures to basically defraud America was shocking….but no surprise to me. For those of us who have been in the Business for years, we all knew this has been going on for years. It has been my opinion that the H1-B process is currently riddled with corruption and fraud.


Thanks to that now famous “H1-B Video”, the masses will understand what we mean by corrupt and unfair to Americans. That video is going to do more “GOOD” to the cause of bringing fairness and equity back to the Americans, than thousands of posts on these Blogs!! This video could not have come at a better time, when our nation is debating on how to handle the H-1B and L-1 Visa based worker. In my opinion, this Video exposes the true intent of the IT Industry Leaders who have been lobbying hard to increase the H-1B quota from 60K to 180K – 250K. If you have not seen it yet, check out the video below:



Some in the Senate support increasing the H1-B Visa Quotas. In my Opinion, with the amount of abuse and corruption in this program, increasing the quota would be a totally irresponsible act against the American People.


I am planning on requesting an Amendment to be added to the Immigration bill. I feel that my proposal should become America’s Proposal. I would like to have the Amendment referred to as the “H1-B and L-1 Visa Social Security and Medicare Recovery Amendment”.

 

In order to bring some equity back to the American tax paying workers, we at Peningo Systems would like to propose the following as the “H1-B and L-1 Visa Social Security and Medicare Recovery Amendment”:

- Any company that hires an H1-B or an L-1 Visa to work in the United States must pay a tax that is equal to 100% of the “Employer and Employee” portion of the Social Security and Medicare tax. This is important, since it takes away one of the “MAIN” incentives to fire an “AMERICAN WORKER” and replace them with an H1-B or L-1 Visa based worker. As it is, some of the H1-Bs, L-1s and their respective employers could be EXEMPT FROM PAYING SOCIAL SECURITY AND MEDICARE TAX! Also, many companies pay the employees on these Visas far less than an American, resulting in a lower tax overhead for the companies. Also by placing 100% of the FICA obligations on the company, even if the Visa holder is being paid less than the Americans, it gives some insurance that the hiring of such individuals is not strictly based on “Cost of Labor”. This Proposal is also very important, since it addresses an issue that is near and dear to every American, and that is, supporting Social Security.

- To combat the abuse of low pay to the H1-B and L-1 Visa holder, which results in the under cutting of the American based worker, which is a violation of the letter of the law, the Federal government must come up with a “Up To Date” Salary survey that would accurately reflect what an American actually would get in the free market place. Then the H1-B or L-1 Visa holder MUST be paid in the UPPER 10% of the Salary range…that’s right…. the H1-B or L-1 MUST be paid in the UPPER 10% of the Salary range. This would insure that H1-B and L-1s are treated, in terms of cost, the same as an American and that the H1-B and L-1 Visa holder is truly a talent that is needed! Also, to combat the “Tax Evasion” aspect of these programs, by paying the Visa Holder in the upper range of the Salary Survey, the “Tax” base that the Employee is being paid at would be in par with what Americans pay. Let’s remember the “Spirit” of these Visa programs is to bring talent that cannot be found in the USA marketplace. If this is truly the case, then in the free market, these individuals should command a higher salary than Americans, since they are “SO SPECIAL”. Unfortunately, they only special quality most of these Visa holders have over Americans is that they “ARE CHEAPER” than Americans.

If we implement these 2 proposals, then the H-1B and L-1 would compete with an American based worker on the merits of his/her abilities and not solely based on the fact that the H1-B’s or L-1’s resume looks good and the H1-B or L-1 is 10s of thousands of dollars cheaper than the American.

This is a fair way to bring equity back into the US as well as protect our Tax Base from these Tax Evading scheme of hiring foreign workers and avoid paying for Social Security and Medicare tax.

With the Outsourcing IT Jobs OffShore and/or using employees who are H1-B Visa or L-1 Visa holders, many times the cost of “Services” to the “End Client” is slightly effected. Between huge markups by some of the Larger Outsourcers and/or the combination of multiple layers of subcontractors involved in providing the IT Services with their respective markups, the cost to the “End Client” is still high. All the Offshoring of IT jobs and hiring of H-1Bs & L-1 Visa holders offers is higher profit margins for the Outsourcers…….WHILE PROVIDING LOWER QUALITY OF SERVICE TO THE END CLIENT!!! It is very true the old saying that Power corrupts and that Absolute Power absolutely corrupts. It is time for the Consultant and the End Client to bypass these “Prestigious Ones” which every day are looking more like ruffians and knaves.

We founded Peningo Systems to combat this problem of multiple layers of markups that ends up in between consultant and the end client.

Peningo’s solution to this problem is to bypass these “Offshore Outsourcers” 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.

If you wish to voice your opinion, you are welcome in commenting to this post. If you wish to voice your opinion to a greater authority….Congress and/or your State Representatives, please go to the Peningo Advocacy Assistance Page

Thank you

 

July 02, 2007

L1 Visa Abuses - A Silent Killer To The IT Industry In The USA

With all the immigration attention being turned to the current attempt by the Outsourcing Corporations to increase the H1-B Quota from 60K to 250K H-1B workers “PER YEAR” to enter and work in the United States, very little to nothing has been said regarding the workers entering the USA working on the L-1 Visa, which currently has NO QUOTA CAP.

As Outsourcing Offshore evolves many companies who have been entrenched in Outsourcing have learned that you need to have more control to have a remote chance to provide the quality of service that is needed to support operations in the USA. In response to this, these companies are now creating divisions overseas in the places like India. These companies are the name plates that we have associated with “Corporate America”, and by no coincidence are the same firms that often announce the laying off of thousands of American workers. The L-1 Visa allows companies with divisions offshore to transfer an employee internally from their division in the Offshore nation to the United States. Many of the qualities of the L-1 Visa are similar to the H1-B, with the exception that the L-1 can only work for the parent company.

Like the H1-B, the L-1 Visa employees may not have to pay for Social Security or Medicare or are paid at a lower salary based effecting the tax base. More importantly, the Employer of the L-1 visa holder may not have to pay for the “Employer” portion of Social Security and Medicare or are paying at a lower tax rate due t the low salary base. This is one of the “MANY” tax advantages and incentives that corporation have to “LAYOFF AMERICANS” and replace them with the L-1 (or H1-B) Visa workers.

Though it is clearly illegal in the letter of the law, many of the workers on either L-1 or H1-B are paid substantially less than their American counterparts….that they have replaced. It’s our opinion that as a result of replacing an American with an internal employee on an L-1 Visa, the company can save thousands, if not 10s of thousands per year, per employee when you factor in the cut in base salary and the savings from the lower tax base of the cut salary or possibly NOT PAYING FOR ALL OF THE SOCIAL SECURITY AND MEDICARE TAX OBLIGATIONS !!!! As you can see, this puts any American at a huge disadvantage!

We must remember the corporations really don’t give a “hoot” regarding the American based worker; they only give a hoot about making a buck …. as they should. It is the lawmakers of our land and the enforcers of those laws who have not step up to the plate. As a result, industries are being destroyed, as well as the lives of those who have worked in those destroyed industries. The true Traitors may not be the Companies who are currently stabbing us in the back……the true Traitors to us Americans are the Legislators and enforcers who do “Nothing” to combat this Corporate Scheme to “EVADE” Taxation while paying L-1 and H1-B Visa holders substantially less than their American Counterparts, which is in clear violation of the law.

In order to bring some equity back to the American tax paying workers, we at Peningo Systems would like to propose the following:

- A CAP must be placed on the number of L-1 Visa based workers than can enter and work in the United States per year.

- Any company that transfers an L-1 Visa into the United States must pay a tax that is equal to 100% of the “Employer and Employee” portion of the Social Security and Medicare tax. This is important, since it takes away one of the “MAIN” incentives to fire an “AMERICAN WORKER” and replace them with an internal transfer from an Offshore nation who’s on an L-1 Visa.

- To combat the abuse of low pay to H1-B and L-1 Visa holder, which is a violation of the letter of the law, the Federal government must come up with a “Up To Date” Salary survey that would accurately reflect what an American actually would get in the free market place.

I plan to personally deliver these proposals to my Federal Representatives.

If you agree with me, please feel with sharing these proposals with your Federal Legislators.

If you wish to voice your opinion, you are welcome in commenting to this post. If you wish to voice your opinion to a greater authority….Congress and/or your State Representatives, please go to the Peningo Advocacy Assistance page.