By Miriam Jordan And Sean McLain
The U.S. government is investigating two Indian outsourcing
firms and a California power company over whether they violated
labor and immigration laws by replacing American workers with
foreigners on temporary work visas.
The Labor Department said it is trying to ensure the Indian
companies and Southern California Edison complied with the terms of
the nation's skilled-worker-visa system. Controversy has exploded
in recent months over whether these foreign workers, who typically
have visas known as H-1Bs, displace or complement U.S. workers.
A Labor Department spokeswoman said she couldn't provide any
more details of an "open investigation."
In response to questions, the company, a unit of Edison
International, said it worked with the Indian companies as part of
its plan to shrink its IT department to about 860 employees by
midyear from about 1,400 previously, through layoffs or voluntary
severance agreements. It noted the two Indian companies, Tata
Consultancy Services Ltd. and Infosys Ltd., must comply "with all
applicable laws."
A spokeswoman for Tata said the company "maintains rigorous
internal controls to ensure we are fully compliant with all
regulatory requirements related to U.S. immigration laws."
Infosys, likewise, said it has followed all U.S. rules.
Other companies including Walt Disney Co. and Fossil have been
accused by former employees of replacing them with foreign workers
who they had trained. A Disney spokeswoman said this didn't occur,
and said the company's resort division had added 70 U.S.-based IT
positions. Fossil officials didn't respond to requests for comment,
but the watchmaker has said it was doing what it believed was right
for the company.
It will be difficult to penalize any employer, experts say,
because most companies aren't barred from replacing Americans with
H-1B workers. Ultimately, it is for Congress to change laws that
govern the program.
"Only very heavy users of H-1Bs face any restrictions" on
displacing workers, said Norman Matloff, a computer-science
professor at the University of California, Davis, who studies the
tech-labor market.
"Southern California Edison and Disney are not in that
category," he added.
Immigration researcher Daniel Costa said laws stipulate H-1B
workers must be paid either a legally defined prevailing wage or
the same wage as others doing similar work at the company.
The investigation comes after former Edison workers have lodged
complaints with the Labor Department and after several lawmakers
have criticized companies' visa practices.
"We're pleased to hear that the Labor Department is taking a
first step to stanch this tide of visa abuse," said Sens. Richard
Durbin (D., Ill.) and Jeff Sessions (R., Ala.) in a statement about
the investigation.
"A number of U.S. employers, including some large, well-known,
publicly traded corporations, have laid off thousands of American
workers and replaced them with H-1B visa holders. To add insult to
injury, many of the replaced American employees report that they
have been forced to train the foreign workers who are taking their
jobs," the statement said.
An American IT specialist, who worked 16 years at Edison and
earned $106,000, said an April 2014 memo from the company detailed
an "IT Employee Requested Severance Program," inviting voluntary
departures. The memo said employees who chose not to participate
would be "subject to possible retention or termination."
Among other things, it said that employees who chose not to take
the package might be offered another position. However, "if the
employee chooses not to accept an offered position that is
comparable to his/her current position, the employee will be
terminated and will not receive severance benefits, unless the new
position would quality for relocation and the employee declines to
relocate," the memo said.
The layoffs were staggered, starting in August 2014, said one
employee who left in January. He trained two individuals, one
remotely via computer and another in his cubicle. Edison had no
comment on the memo or on any employee training.
"It was kind of humiliating," the IT specialist said.
"Sometimes, you are fired and walk out the door. This was someone
sitting next to you for three months who you're training to do your
job."
Write to Miriam Jordan at miriam.jordan@wsj.com and Sean McLain
at sean.mclain@wsj.com
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