Using H-1B Visas To Help Outsource IT Work Draws Criticism, Scrutiny

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An employee walks along a path at the Tata Consultancy Services Ltd. Synergy Park campus in Hyderabad, India, in 2016. Some in-house PG&E employees will be replaced by workers from TCS. Namas Bhojani/Bloomberg via Getty Images hide caption

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Namas Bhojani/Bloomberg via Getty Images

An employee walks along a path at the Tata Consultancy Services Ltd. Synergy Park campus in Hyderabad, India, in 2016. Some in-house PG&E employees will be replaced by workers from TCS.

Namas Bhojani/Bloomberg via Getty Images

A utility in California is cutting a small fraction of its information technology jobs and shipping them off to India. By doing so, Pacific Gas and Electric is stepping into a complex debate in Washington right now about immigration, jobs and the H-1B, a visa designed for high-skilled labor.

The logic behind sending IT jobs to India is straightforward: Workers there are cheaper.

Brian Hertzog, a spokesperson for PG&E, says the utility is offshoring 70 jobs, which he describes as routine IT work the company plans to eventually phase out.

"Generally, this represents an opportunity for cost savings," he says. "They're able to do the work more affordably than we would be able to do it in-house."

The in-house PG&E employees are now training their replacements: workers from Tata Consultancy, an India-based contracting company. Some of the replacements are in the U.S. on H-1B visas.

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These workers come in, learn the ropes and then send the IT work to be done cheaply in India — by training workers in their home country to do those jobs. PG&E did not make any affected workers available to comment.

The company is far from the first to outsource like this. Disney, Toys R Us, universities and other utilities like Southern California Edison have done it.

"When this was happening 10 years ago, it wasn't as blatant," says Paul Almeida, with the union federation AFL-CIO. "But it's gone on for so long, and it's become part of the business model."

He says the H-1B visa has become, unfortunately, a critical part of this outsourcing business model. Multinational contractors like Tata Consultancy get thousands of H-1B visas for their workers. This visa is intended for high-skilled employees who can't be found in the U.S. — not people doing standard IT work.

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Almeida says outsourcers such as Tata are misusing the system and undercutting U.S. workers.

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"Where does it end?" he asked. "We told our kids for years to go to school and get jobs in tech, and now there's nothing for them."

Tata Consultancy did not return a request for comment.

For years, lawmakers in Washington have tried and failed to reform the H-1B system. It's contentious. On one side are labor advocates like Almeida. On the other are tech companies like Google and Facebook that say they can't get enough visas for top foreign talent.

There's a cap on the number of H-1Bs issued every year and a random lottery to award them. This means sometimes foreign graduates from top U.S. universities, places like the Massachusetts Institute of Technology and the University of California, Berkeley, can't get one.

Gali Gordon, an immigration lawyer in San Francisco, recalls a client of hers who repeatedly lost the lottery.

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"We filed three years in a row for him," she says. "He was unsuccessful, and he eventually went back to Europe and started a company, and to my knowledge, he's there."

There are currently three H-1B reform bills in Congress, some of which are more friendly to concerns of the tech industry and others to those of labor advocates.

In addition to these bills, a draft executive order from the White House has been leaked to the media. The order is vague, but it suggests the Trump administration could make major changes to the H-1B and a number of other visas.

Gordon says the executive order is adding a layer of chaos to the whole issue.

"It is crazy right now," she says. "People are scared, companies are worried, there's a lot of uncertainty, and companies are thinking about backup plans."

At PG&E, the IT workers training their replacements are thinking of backup plans of their own.

They will be out of jobs in the next few months.