A report published in the New York Times claims that Toy 'R' Us has used the H-1B visa system to facilitate the layoff of US workers, employ foreign workers and ultimately send job roles overseas. The H-1B visa is a temporary visa program that permits US employers to recruit foreign professionals usually with at least a bachelor's degree to work in "specialty occupations"
Many foreign workers recruited through the H-1B visa program are employed in the IT, engineering and health sectors to meet the needs of employers requiring particular skills. According to federal guidelines, employers must sign a declaration stating that the employment of overseas workers 'will not adversely affect the working conditions of Americans or lower their wages.'
Alleged H-1B visa violations
However, in recent years, it has been said by some that global consulting and outsourcing firms that obtain thousands of temporary visas to recruit foreign workers are taking jobs once held by US workers. Investigations by the Labor Department have already begun into possible visa violations by contractors at the Walt Disney Company and Southern California Edison.
These two companies are alleged to have recruited overseas workers for the purpose of replacing US employees. Four former Disney employees have started legal proceedings alleging discrimination. However, Disney and Southern California Edison say they have complied fully with all the laws applicable to the employment of foreign workers.
The New York Times says that the layoffs taking place at Toys 'R' Us, plus the New York Life Insurance company and other companies, go 'a step further' than those at Disney and Southern California Edison.
An excerpt from the New York Times report reads: "They are examples of how global outsourcing companies are using temporary visas to recruit workers from overseas who don't appear to have any exceptional skills. Having conducted interviews with around a dozen current or former employees of Toys 'R' Us, many job roles are being sent abroad, particularly to India."
Shortage of skills at specialty level in the US
In the majority of cases involving US workers losing their jobs, the positions have been in technology, with employers citing a 'shortage of Americans with the most advanced skills' as the reason behind recruiting overseas workers. However, more recently, American job losses have occurred across sectors such as accounting and administration, despite there being no shortage of US workers qualified for these types of jobs. It should also be noted that there is no actual requirement that the employer show that there are no local workers available to do the job under the H-1B visa scheme.
Lynn Shotwell, executive director of the Council for Global Immigration, which lobbies Congress for more visas for highly-skilled foreign workers, said: "The primary purpose of the H-1B visa program is to help US companies compete in the global economy. If employers can hire key people, they're able to keep jobs in the US and create new jobs here."
Outsourcing firms, along with the companies hiring them, say they take every care not to violate any laws. However, some commentators have said that the H-1B visa program is being misused.
San Francisco lawyer, Christine Brigagliano, said: "At the very least, the spirit of the law is being violated. Contractors are signing declarations to say that they will not undercut the wages and working conditions of Americans. In reality that's exactly what they're doing."
Companies say they have complied with US immigration laws
Toys 'R' Us have a different view. Kathleen Waugh, a spokesperson for the toy giant, said: "Staff reductions are part of designing a streamlined, more efficient global organization to make it fit for growth. Contractors are required to comply with any and all immigration laws, while outsourcing results in significant cost savings."
The federal government does not monitor how often US workers lose their jobs to workers on a temporary visa. However, employees across numerous companies - such as Cengage Learning – say that around 30 accountants across Ohio and Kentucky lost their jobs after training Indian workers on temporary visas. They say the workers, along with the jobs, went to India.
H-1B visas are capped at 85,000 every year. Over the last five years, federal records reveal, the companies receiving the largest proportion of H-1B visas have been global outsourcing companies. These include the likes of TCS [Tata Consultancy Services] and Infosys, both Indian firms, Cognizant [based in the US] and Accenture [a firm incorporated in Ireland].
Allegations of L-1B visa misuse
Some companies, including TCS, have also been accused of exploiting the L-1B visa program – a temporary visa with no annual cap that permits businesses to transfer professional level staff from their overseas offices to the US. Spokesman for TCS, Benjamin Trounson, said: "Strict internal controls are in place to ensure that we comply with all the necessary requirements."
Recently, more and more American workers – many of whom wish to remain anonymous for fear of losing their jobs or jeopardizing any severance packages – have complained about the practices of many big companies bringing in foreign workers on a temporary visa.
A former accountant for Toys 'R' Us said: "We were asked to cooperate and show foreign workers respect while training them to do our jobs! I'd worked for them for 12 years, but was told if I didn't cooperate I'd be asked to leave."