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



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






The H-1B visa program was originally created to assist American employers who were having trouble finding American high-tech workers for their businesses. It allowed a fixed number of foreign workers come to the United States to “temporarily” fill those positions while the American companies and the federal government invested time and money in upgrading the training of American workers to meet the new skill levels required.

Although the program was originally designed to benefit American businesses, it has now become a program that benefits foreign companies with offices in America, rather than American companies, because the majority of the H-1B visas are now going to foreign-owned companies. Data just released by the federal government shows that offshore outsourcing firms, mostly from India, dominate the list of companies awarded H-1B visas in 2007. Indian outsourcers accounted for nearly 80% of the visa petitions approved last year for the top 10 participants in the program. These statistics should set off some alarms in congress that the H-1B visa program is not working as it was intended. Aqccording to data from the U.S. Citizen and Immigration Services, Infosys Technologies and Wipro, two companies based in Bangalore, top the list of visa beneficiaries in 2007, with 4,559 and 2,567 approved visa petitions, respectively. Microsoft and Intel were the only two traditional U.S. tech companies among the top 10. Microsoft received only 959 visa petition approvals, or one fifth as many as Infosys, while Intel got only 369. How is this helping American workers and American businesses?

The H-1B work visa program was supposed to be used to bolster the U.S. economy by helping American-owned companies. Under the program, American companies can use the speciality visa to hire foreign software programmers or computer scientists with rare skills in order to encourage innovation and improving competitiveness. Instead, foreign companies such as Infosys and Wipro are using our own government program to undermine the American economy by wiping out American jobs. These foreign-owned companies are bringing low-cost workers into the U.S., training them in the offices of American business clients, and then rotating them back home after a year or two so they can provide low cost, out-sourced tech services that causes American IT workers to lose their jobs. How is this helping American workers and American businesses?

Even though approximately 80,000 Americans lost their jobs in the first two months of 2008, incredibly some members in the House of Representatives have introduced legislation to help these big foreign-owned international corporations bring in an increasing number of foreign workers that will put even more Americans out of work. Since its inception, the H-1B Visa program has been rampant with fraud. In the first half of 2006, the Programmer’s Guild, a group representing U.S. worker interests, filed over 300 discrimination complaints against companies who posted “H-1B visa holders only” ads on internet job boards. It’s obvious that these foreign-owned companies are only targeting foreign workers and undermining the system by bypassing the American worker. How is this helping American workers and American businesses?

While a bill to reduce illegal immigration (HR-4088) is stalled in Congress with the House leadership refusing to bring it to the floor for a vote, Representative Gabrielle Giffords (D-Arizona) has introduced “The Innovation Employment Act” (HR-5630) that would increase the cap of H-1B visas from 65,000 a year to 130,000 a year. In addition, there would be no cap on H-1B applications for foreign graduate students attending U.S. colleges and studying science, technology and related fields. Currently, there's a 20,000 student-a-year cap on visas for graduate students in all fields. The legislation would eventually increase the H-1B cap to 180,000 and the total number of foreigners admitted under this work and graduate education proposal could reach almost 300,000 a year. To make matters worse for the American IT workers, Rep. Lamar Smith (R-Texas) has introduced the “Strengthening United States Technology and Innovation Act” (H.R. 5642), which would TRIPLE the current H-1B visa cap to 195,000 in 2008 and 2009 and Rep. Zoe Lofgren (D-Calif) wants to make Rep. Smith’s increase permanent. How is this helping American workers and American businesses?

There is no real shortage of American information technology workers. It’s just that the large high-tech international companies want to turn these hard earned information technology skills into as cheap a labor commodity as possible at the American workers’ expense. On March 12th Bill Gates appeared before Congress calling for an increase in H-1B visas. Two days later, without soliciting comments from any representatives of American IT workers, Congress introduced two bills that would double or triple the H-1B base cap. Why weren’t the representatives of American IT workers allowed to be heard? Could the average of $25 million dollars a year that members of congress receive in bribes (I mean campaign contributions) from the Computer Equipment and Services Industry, have something to do with this? Here’s some interesting campaign contribution statistics compiled by the Center for Responsible Politics at www.opensecrets.org that shows why congress may be so eager to support the requests of the Computer Equipment and Services Industry over the American IT workers. Here’s how much the high-tech industries have contributed to federal campaigns:

2000 - $38.9 million
2002 - $26.7 million
2004 - $29.0 million
2006 - $18.4 million
2008 - $15.5 million (partial)

These two bills (H.R. 4088 and H.R. 5642) will do nothing to curb the fraud in the H-1B visa program and they will have serious consequences for American citizens that are employed in the information technology field. The proposed legislation will displace even more American IT workers and outsource their good paying, high-technology jobs to foreign off-shore companies. We must learn from our mistakes. The current H-1B visa program has not served the best interests of American workers nor American companies. The current program has actually helped foreign competitors, with branch offices in the USA, hire almost no Americans and shift as many American jobs overseas as possible. How is this helping American workers and American businesses?

The current H-1B Program, as designed, is detrimental and harmful to the welfare of American workers and American high-tech businesses. It should be abolished. In it’s place and only if it is needed, H-1B type legislation should be written in a way that actually benefits American companies, American workers and American students thinking of embarking on a high-tech career.
Any new H-1B Visa legislation should be simple and have the following criteria to help Americans only:

IT MUST BENEFIT BOTH AMERICAN WORKERS AND AMERICAN COMPANIES: The H-1B Visa Program was originally designed to help American companies. Any new H-1B Visa Program should apply ONLY to American-based business entities and the H-1B visas should only be issued to foreign employees after proof is supplied that no American worker has either applied or is otherwise qualified for the position.

BENEFIT FOR AMERICAN STUDENTS: Companies that hire H-1B visa holders should pay an annual fee for each visa holder they hire to be used to fund scholarships for American citizen high school and college students interested in high-tech careers and enrolled in STEM educational programs (Science Technology Engineering and Mathematics).

Candidate for Congress
New York’s 20th Congressional District

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