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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.