A year ago the big employment story in the United States was that technology companies were lobbying Congress to expand the H1-B visa program to allow more foreign workers into the country (see Visa Envy?). There was a shortage of workers, they complained. A year later, many of these companies are laying off thousands of workers and cutting their total head counts down as much as 50 percent.

The story has shifted. The question now is what will happen to all these foreign workers who were let into the country to fill jobs during the shortage?

Neither the U.S. Immigration and Naturalization Service (INS) nor the U.S. Department of Labor track how many H1-B workers have been laid off, but anecdotal evidence suggests that the 400,000 workers currently employed in this country on H1-B visas haven’t been as adversely affected by the economic downturn as some had feared. At least not yet.

For example, Lucent Technologies Inc. (NYSE: LU), which was ranked 13th for the number of H1-B requests filed in 2000 by the INS, laid off 10,500 people between January and June of 2001. Of that number, fewer than 100 were H1-B workers, says Bill Price, a media spokesperson for Lucent. Immigration experts also say they haven’t seen a flood of H1-B visa workers looking for help.

”Honestly, the problem is not that severe,” says Greg Siskind, a partner at the law firm Siskind, Susser, Haas & Devine, which specializes in H1-B cases. “We’ve not heard of anyone being deported. And H1-B inquiries are as high as they’ve ever been.”

There are a couple of reasons why, he explains. For one, changes in the law last year have made it much easier for current H1-B visa holders to transfer jobs. So if an employer gives an employee some notice before the layoff occurs, the foreign worker has the opportunity to look for another job and simply transfer his H1-B visa to the new company.

Secondly, the INS seems to be rather sympathetic to workers who have been laid off. According to the rules, once an H1-B worker loses his job, he is not in status and must return immediately to his homeland, usually within 10 days. But Bill Strassberger, a media spokesperson for the INS says that the INS has been evaluating cases individually and generally allows 60 days.

“There is no grace period in terms of the status of the H1-B visa,” he says. “But they should have a reasonable time period to leave the country. The INS won’t be knocking on the door of every non-immigrant visa holder.”

The problem that visa holders face is that if they are terminated and find a job within the 60-day window, they must reapply for a new H1-B visa because the status of their original visa was cancelled. But Strassberger says that people in this situation are usually allowed to stay in the country while they wait for the new visa to process. Since the processing time has been greatly improved, Siskind says that a new H1-B visa only takes about two weeks to complete, versus the two to three months it used to take.

Even though companies large and small have been laying off thousands of workers, the INS reports that for fiscal 2001, which ended on September 30, companies requesting H1-B workers used up nearly all of the 195,000 spots allocated. This is more than last year, since fiscal 2001 was the first of three consecutive years that the cap has been temporarily raised to 195,000 from 115,000. It is also the first year that university researchers and professors were not included in the H1-B pool, which means the number of skilled foreign workers who entered the country in fiscal 2001 could have been much higher. Siskind estimates the true number could be as high as 240,000 foreign skilled workers.

As the economy continues to slump, however, H1-B workers may start feeling the affects. For example, consider Lucent again. Along with the 10,500 jobs it cut in the first half of this year, it plans to cut another 12,000 by the end of the year. And even though only a small fraction of the 1,700 H1-B visa holders at Lucent were affected in the first round of cuts, there is no guarantee that others won’t be affected in the next round.

The main concern, of course, is that unemployment is rising. During August and September of 2001, the unemployment rate in the United States was 4.9 percent, up from 3.9 percent a year ago, according to the Bureau of Labor Statistics of the U.S. Department of Labor. While 4.9 percent is still considered a low rate of unemployment, many laid off workers in the optical networking industry say that it has become extremely hard to find jobs lately. Workers in Silicon Valley, which is home to dozens of small startups and several large networking companies like Cisco and the networking division of Nortel, seem to be feeling the brunt of the pain.

“I think I’m going to have to move out of the Valley altogether,” says a software developer who recently lost his job when Geyser Networks folded. “There are so many people like me looking for work and just not enough jobs to go around. Besides, I can’t take a pay cut because it’s just too expensive to live here.”

With unemployment on the rise, some critics of H1-B visas have pointed out that the need for foreign workers has diminished. Ira Mehlman, media director for FAIR (the Federation for Immigration Reform), a group that has lobbied against the expansion of the H1-B quota, says that domestic workers should not have to compete for jobs with foreign workers in the U.S. on temporary visas.

If the economy continues to worsen (and terror-inspired xenophobia continues to grow) views such as FAIR’s could affect how the INS administers its rulings. “It all comes down to how much discretion and how lenient the INS wants to be,” says Siskind.

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com