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Ethical Abuses of H1-B Visa Program

Corporate Responsibility Takes a Back Seat to Self-Interest

Donald Trump supported H1-B visas during the Republican debate last Thursday night. He claimed it is difficult to find skilled American workers to fill certain jobs so he advocated bringing in trained foreign workers to do the job. He said he wanted to expand the program. Trump said “We do need highly skilled, and one of the biggest problems we have is people go to the best colleges. They'll go to Harvard, they'll go to Stanford, they'll go to Wharton, as soon as they're finished they'll get shoved out. They want to stay in this country. They want to stay here desperately, they're not able to stay here. For that purpose, we absolutely have to be able to keep the brain power in this country.”

The next day he seemed to reverse his position when his campaign released a statement saying that he actually does not want to expand it. So what’s up? I don’t mean with The Donald changing his position. That has been his mantra during the campaign. Instead, I look at the ethical issues of the Visa program in this blog.

H1-B visas allow U.S. companies to hire foreign workers on a temporary basis, usually for up to 3 years. The federal government limits the number of H1-B visas to 65,000 every year with 20,000 additional visas for foreign professionals who graduate with a Master’s or Doctorate from a U.S. university. Visa workers are in high demand. Technology giants like Microsoft, Facebook and Google repeatedly press for increases in the annual quotas, saying there are not enough Americans with the skills they need.

H1-B visas are not for cheap laborers. A Heritage Foundation study aound the median employee earns $74,250 a year. “The average H1-B salary of $78,600 is 50 percent above that of the average U.S. workers’ of $50,300,” the study said.

Many American companies use H-1B visas to bring in small numbers of foreigners for openings demanding specialized skills, according to official reports. But for years, most top recipients of the visas have been outsourcing or consulting firms based in India, or their American subsidiaries, which import workers for large contracts to take over entire in-house technology units — and to cut costs. The immigrants are employees of the outsourcing companies.

It seems quite clear from an ethical perspective that replacing competent and skilled American workers, many of whom have worked for their employers for years, with skilled foreign workers is unethical. Corporations have a social responsibility to advance the cause and improve the well-being of American workers unless it can be clearly demonstrated that there are no Americans with sufficient skills to fill a job. Even then I contend that a socially responsible corporation should establish a training program, perhaps in conjunction with U.S. universities, to provide the skills necessary to fill employers’ needs.

The problem is very few corporations see themselves as “citizens” of a community with an obligation to better the lives of American workers. Instead, most are out for themselves – nothing more; nothing less. It’s an egoist approach to ethical decision-making. It infects various segments of society including not helping to raise wages of the middle class; outsourcing of jobs; and now, corporate inversions where the corporate headquarters are moved overseas to avoid paying U.S. corporate income taxes.

A case in point about H1-B visa ethical failings is what happened at Disney a couple of years ago. About 250 Disney employees were told that they would be laid off. Many of their jobs were transferred to foreigners on temporary visas for highly skilled technical workers, who were brought in by outsourcing firms, such as Infosys and Tata, based in India. Over the next three months, some Disney employees were required to train their replacements to do the jobs they had lost. Talk about adding insult to injury. Disney needs to be held accountable for its actions and questions should be raised about how this American icon of a company could act so irresponsibly.

Leo Perrero was laid off from his technology job at Disney. Perrero discovered that despite his high performance ratings, he and most of the other 250 tech workers dismissed would not be rehired for at least a year, and probably never. Perero and Dena Moore, another American laid off by Disney at that time, have filed lawsuits in federal court in Tampa, Fla., against Disney and two global consulting companies, HCL and Cognizant, which brought in foreign workers who replaced them. They claim the companies colluded to break the law by using temporary H-1B visas to bring in foreign workers, knowing that Americans would be displaced.

The lawsuits by Perrero and Moore, who each filed a separate but similar complaint seeking class-action status, represent the first time Americans have gone to federal court to sue both outsourcing companies that imported foreigners and the American company that contracted with those businesses, claiming that they collaborated intentionally to supplant Americans with H-1B workers.

The H1-B visa program has an important role to play in driving the economy of the U.S., and many of those hired become responsible citizens and contributing members of society. However, a balance needs to be crafted to provide the skills to American workers when purportedly they are lacking. Corporations should reach out to universities or provide their own professional education and technology training programs to keep our workers competitive.

I have become increasingly more skeptical of the true motivation of corporations given all the recent scandals, such as at companies like Enron and WorldCom; Wall Street investment banks; and now we have rampant insensitivity in the use of foreign workers replacing American workers in the H1-B visa program. It is time for U.S. corporations to prove to the American people that they have the best interests of American workers at heart.

Blog posted by Dr. Steven Mintz, aka Ethics Sage, on March 8, 2016. Professor Mintz is on the faculty of the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at:

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