[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
 H-1B VISAS: DESIGNING A PROGRAM TO MEET THE NEEDS OF THE U.S. ECONOMY 
                            AND U.S. WORKERS

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   IMMIGRATION POLICY AND ENFORCEMENT

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 31, 2011

                               __________

                           Serial No. 112-23

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov



                  U.S. GOVERNMENT PRINTING OFFICE
65-488                    WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  

                       COMMITTEE ON THE JUDICIARY

                      LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT, 
BOB GOODLATTE, Virginia                  Virginia
DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio                   ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana                  MAXINE WATERS, California
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
TED POE, Texas                       JUDY CHU, California
JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
TOM REED, New York                   LINDA T. SANCHEZ, California
TIM GRIFFIN, Arkansas                DEBBIE WASSERMAN SCHULTZ, Florida
TOM MARINO, Pennsylvania
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona

      Sean McLaughlin, Majority Chief of Staff and General Counsel
       Perry Apelbaum, Minority Staff Director and Chief Counsel
                                 ------                                

           Subcommittee on Immigration Policy and Enforcement

                  ELTON GALLEGLY, California, Chairman

                    STEVE KING, Iowa, Vice-Chairman

DANIEL E. LUNGREN, California        ZOE LOFGREN, California
LOUIE GOHMERT, Texas                 SHEILA JACKSON LEE, Texas
TED POE, Texas                       MAXINE WATERS, California
TREY GOWDY, South Carolina           PEDRO PIERLUISI, Puerto Rico
DENNIS ROSS, Florida

                     George Fishman, Chief Counsel

                   David Shahoulian, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             MARCH 31, 2011

                                                                   Page

                           OPENING STATEMENTS

The Honorable Elton Gallegly, a Representative in Congress from 
  the State of California, and Chairman, Subcommittee on 
  Immigration Policy and Enforcement.............................     1
The Honorable Zoe Lofgren, a Representative in Congress from the 
  State of California, and Ranking Member, Subcommittee on 
  Immigration Policy and Enforcement.............................     2
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Chairman, Committee on the Judiciary.......     4
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Ranking Member, Committee on 
  the Judiciary..................................................     5

                               WITNESSES

Donald Neufeld, Associate Director of Service Center Operations, 
  U.S. Citizenship and Immigration Services
  Oral Testimony.................................................     7
  Prepared Statement.............................................     9
Bo Cooper, Partner, Berry, Appleman & Leiden, LLP
  Oral Testimony.................................................    17
  Prepared Statement.............................................    19
Ronil Hira, Ph.D., Associate Professor of Public Policy, 
  Rochester Institute of Technology
  Oral Testimony.................................................    26
  Prepared Statement.............................................    28
Bruce A. Morrison, Chairman, Morrison Public Affairs Group
  Oral Testimony.................................................    36
  Prepared Statement.............................................    38

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Material submitted by the Honorable Zoe Lofgren, a Representative 
  in Congress from the State of California, and Ranking Member, 
  Subcommittee on Immigration Policy and Enforcement.............    47

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the HR Policy Association..................    75
Prepared Statement of Andrew Sherrill, Director, Education, 
  Workforce, and Income Security, the United States Government 
  Accountability Office (GAO)....................................    81
Letter from Ron Somers, President, U.S.-India Business Council...    98
Prepared Statement of Conservatives for Comprehensive Immigration 
  Reform (CfCIR).................................................   100
Letter from Lynn Shotwell, Executive Director, the American 
  Council on International Personnel (ACIP)......................   101
Prepared Statement of Som Mittal, President, National Association 
  of Software and Service Companies (NASSCOM)....................   103
Letter from Randel K. Johnson, Senior Vice President, Labor, 
  Immigration and Employee Benefits, and Amy N. Nice, Executive 
  Director, Immigration Policy, the Chamber of Commerce of the 
  United States of America.......................................   107
Prepared Statement of the National Immigration Forum.............   110
Prepared Statement of the Honorable Maxine Waters, a 
  Representative in Congress from the State of California, and 
  Member, Subcommittee on Immigration Policy and Enforcement.....   112


 H-1B VISAS: DESIGNING A PROGRAM TO MEET THE NEEDS OF THE U.S. ECONOMY 
                            AND U.S. WORKERS

                              ----------                              


                        THURSDAY, MARCH 31, 2011

              House of Representatives,    
                    Subcommittee on Immigration    
                            Policy and Enforcement,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Elton 
Gallegly (Chairman of the Subcommittee) presiding.
    Present: Representatives Gallegly, Smith, King, Lungren, 
Gohmert, Poe, Gowdy, Ross, Lofgren, Conyers, and Jackson Lee.
    Staff present: (Majority) George Fishman, Subcommittee 
Chief Counsel; Marian White, Clerk; and David Shahoulian, 
Minority Counsel.
    Mr. Gallegly. Good morning.
    The Subcommittee last held a hearing on the H-1B program 
almost exactly 5 years ago today. Much has changed since 2006. 
Demand for H-1B visas plummeted along with the great recession, 
especially in Silicon Valley and is only now slowly recovering.
    The number of H-1B workers approved for initial employment 
in the computer systems design industry fell by 46 percent from 
about 44,000 fiscal year 2005 to 24,000 fiscal year 2009.
    On the other hand, the Bureau of Labor Statistics projects 
that some of the fastest growing occupations over the next 
decade will be computer and mathematic occupations with these 
jobs up 22 percent overall. It is encouraging news that the 
median salary of H-1B workers approved for initial employment 
has increased by healthy amounts, going from $50,000 in 2005 to 
$59,000 in 2009 and $60,000 for immigrants in computer-related 
occupations.
    Additionally, the number of visas issued to foreign 
students keep on growing, going from about 238,000 in 2005 to 
approximately 331,000 in 2009. In fact, the single biggest 
selling point for H-1B visas is that they allow foreign 
students educated in the U.S. to work for American companies 
rather than our competitors. As Compete America argues, ``in 
many critical disciplines, particularly in science, math, 
engineering and technology, 50 percent or more of the 
postgraduate degrees at U.S. universities are awarded to 
foreign nationals. The H-1B visas allow these graduates to 
apply their knowledge toward the growth of new jobs and 
industries in the United States.''
    Yet we still hear the same disturbing stories we heard 
years ago about American computer scientists being unable to 
find work, especially when they hit 35 years of age. And we 
still hear the dispiriting stories of Americans being laid off 
and replaced by H-1B workers, sometimes even being forced to 
train their replacements if they want to receive severance 
packages.
    The debate persists over foreign companies being some of 
the biggest users of the H-1B program and utilizing a business 
model whereby they contract out their H-1B workers to their 
employers. GAO reports that a large number of H-1B complaints 
have been filed against such companies.
    The issue certainly reached a boiling point last year. 
Congress approved a special $2,000 H-1B visa fee for these 
companies. One of our witnesses today, Don Neufeld, Associate 
Director of Service Center Operations at U.S. Citizenship and 
Immigration Services, has waded into this controversy. He 
issued a memo determining that in many cases the business model 
is not an authorized use of the H-1B program. I am sure we will 
hear more from Mr. Neufeld as the hearing moves on.
    Finally, there is an ongoing matter of enforcement of the 
H-1B program. Because employers need to bring in H-1B workers 
onboard in the shortest possible time, the H-1B program's 
mechanism for protecting American workers is not a pre-arrival 
review of the need for foreign workers and the unavailability 
of American candidates. Instead the employer had to file a 
``labor condition application,'' making certain basic promises 
such as a promise to pay at least the prevailing wage. The 
Labor Department is entrusted with investigating complaints 
alleging noncompliance. The level of enforcement has always 
been problematic. The GAO has recommended that Congress grant 
the Department several additional enforcement tools. We should 
give careful consideration to these recommendations.
    All this being said, I look forward to today's hearing and 
at this point I would move over to my good friend and the 
Ranking Member, Miss Lofgren.
    Ms. Lofgren. Thank you, Mr. Chairman.
    In 2005 the National Academy of Sciences, the National 
Academy of Engineering and the Institute of Medicine published, 
at Congress' request, a seminal and very sobering report on the 
state of our science and technology industries and our eroding 
economic leadership in these areas. The report, entitled, 
``Rising Above the Gathering Storm,'' shows how the Nation's 
economic strength and vitality are largely derived from the 
productivity of well trained people and the steady stream of 
scientific and technical innovations they produce.
    But after reviewing trends across the globe, the authors of 
the report were deeply concerned that due in part to 
restrictive immigration policies the scientific technological 
building blocks critical to our economic leadership are eroding 
at a time when many other nations are gathering strength.
    According to the report, and I quote, ``Although many 
people assume the United States will always be a world leader 
in science and technology, this may not continue to be the case 
in as much as great minds and ideas exist throughout the world. 
We fear the abruptness with which a lead in science and 
technology can be lost and the difficulty of recovering a lead 
once lost, if indeed it can be regained at all.''
    Fortunately, Congress passed the America Competes Act in 
2007 which we authorized again last year to address many of the 
educational and research challenges raised by the national 
academies. But, on our broken immigration system Congress has 
done nothing at all.
    Let me just share a few quick statistics. Immigrants in the 
United States were named as inventors or co-inventors in one-
quarter of international patent applications filed from the 
United States in 2006. Of U.S. engineering and technology 
companies started between 1995 and 2005 more than one-quarter 
have at least one foreign-born founder. In my district, in 
Silicon Valley, over half of the new companies, the start-ups, 
were started by immigrants. Nationwide, immigrant-founded 
companies produced $52 billion in sales and employed 450,000 
workers alone in 2005.
    Due partly to immigration, our country, with just 5 percent 
of the world's population, employs nearly one-third of the 
world's scientific and engineering researchers, accounts for 40 
percent of all R&D spending and publishes 35 percent of all 
science and engineering articles. This leadership in science 
and technology, according to the Academies, has translated into 
rising standards of living for all Americans, with technology 
improvements accounting for up to half of GDP growth and at 
least two-thirds of productivity growth since 1946. This is 
because, according to the Academies, while only 4 percent of 
the Nation's workforce is composed of scientists and engineers, 
this group disproportionately creates jobs for the other 96 
percent.
    Based on these statistics one would think we would be 
jumping all over ourselves to keep bright, innovative minds in 
the United States. But by failing to reform our employment-
based immigration laws, which have not been substantially 
updated in more than 20 years, we have been doing exactly the 
opposite. In 1977 only 25 percent of masters and PhDs in 
science and engineering were foreign nationals. By 2006, the 
majority of U.S. graduate students in these fields were 
immigrants. In some fields, such as engineering and computer 
sciences, immigrants now comprise more than two-thirds of all 
PhD graduates. But rather than keep the best and brightest of 
these U.S. trained graduates to innovate and create new jobs 
here at home, our laws force them to leave and compete against 
us from overseas.
    To remain the greatest source of innovation in the world, 
we need to educate more U.S. students in STEM fields, that is 
why I championed the American Competes Act. But we also must 
retain more of those who actually graduate from our 
universities, unquestionable the best in the world. Sending 
these graduates home is a reverse brain drain that threatens 
our competitive advantage in the global marketplace. Countries 
around the world are increasingly scrambling to lure these 
talents to their shores in the global race to create new and 
better technologies as well as the millions of jobs that come 
with them.
    I am glad that we are having this hearing to discuss the H-
1B program and how it can help us retain the talent this 
country needs to stay ahead.
    We will hear witnesses today discuss limitations inherent 
in the H-1B program as well as recent problems with the 
program's administration that create roadblocks and uncertainty 
for employers and H-1B workers alike. And we will hear 
witnesses talk about a lack of safeguards that leaves the H-1B 
program subject to abuse and manipulation by bad apple 
employers. We need to address these issues so that the H-1B 
program better serves the employers that use it while better 
protecting U.S. and H-1B workers alike, and there are ways to 
achieve this.
    But I would be remiss if I did not say that the H-1B 
program is not the solution to America's most pressing 
problems. We have years long backlogs right now that are 
preventing H-1B workers from getting the green cards that would 
actually allow them to lay down roots, start businesses and 
invest in America. Increasing H-1B numbers can't fix this. 
Indeed, every day we learn of stellar scientists and engineers 
who pass up the H-1B visas and return home because of the 
uncertainty that H-1B status represents: Years in limbo, a 
limited ability to take promotions or other jobs, spouses 
unable to work, their destiny not their own. Meanwhile, Europe, 
Australia, Canada and even China and India are changing their 
laws and rolling out the welcome mats providing permanent visas 
and citizenship to STEM advanced degree holders. We must do the 
same or risk being left behind.
    And I yield back, Mr. Chairman.
    Mr. Gallegly. I thank the gentlelady.
    At this time I would recognize the Chairman of the full 
Committee, Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman and let me comment on 
the audience today. It is nice to see so many people who are 
interested in this particular subject and the interest is well 
deserved.
    The H-1B visa program plays a vital role in our economy. It 
allows American employers to hire talented foreign students 
graduating from U.S. universities with degrees in science, 
technology, engineering and math fields. It gives these 
students a tryout period so that American employers can 
determine which are talented enough to deserve permanent 
residence. These foreign scholars are part of America's present 
and future competitiveness. These students have the potential 
to come up with an invention that can save thousands of lives 
or jumpstart a whole new industry. They also have the ability 
to found a company that can provide jobs to tens of thousands 
of American workers.
    It appears that doctorates lead to much more invention than 
bachelors or masters degrees. Sixteen percent of those with 
doctorates were named as inventors on a patent application, 
while only 2 percent of those were with bachelors degrees and 5 
percent of those with masters degrees were so named.
    Not all H-1B visas go to workers in scientific fields. In 
2009 only 35 percent of all initial H-1B approvals went to 
workers in computer related fields. Foreign workers are 
receiving H-1B visas to work as fashion models, dancers, chefs, 
photographers and social workers. There is nothing wrong with 
those occupations but I am not sure that foreign fashion models 
and pastry chefs are as crucial to our success in the global 
economy as are computer scientists.
    The 65,000 base annual quota of H-1B visas is going to come 
under more and more pressure as the economy improves. If 
Congress doesn't act to increase the H-1B cap, then we may need 
to examine what sort of workers qualify for H-1B visas. 
Congress also will have to ensure that the L and B visa 
programs are not abused by employers seeking ways around the H-
1B cap.
    No matter how generous our legal immigration system is, 
there will always be individuals who seek to game the process. 
The H-1B program has safeguards built into it to protect the 
interests of American workers. It is a subject of great dispute 
as to whether those safeguards are sufficient. The Government 
Accounting Office recently found that H-1B employers 
categorized over half of their H-1B workers as entry level, 
which is defined as quote, ``performing routine tasks that 
required limited, if any exercise of any judgment,'' end quote, 
and only 6 percent as fully competent. Are all these entry 
level workers really the best and the brightest?
    The dollar differences are not trivial. In New York City, 
the prevailing wage for a computer systems engineer in systems 
software is $68,000 for an entry level worker and are $120,000 
for a fully competent worker. Are American workers losing out 
to entry level foreign workers?
    We also need to safeguard national security. The Government 
Accounting Office recently found that the U.S. Government 
approved thousands of H-1B visas to foreign nationals from 13 
``countries of concern,'' the names of the countries withheld 
for security reasons.
    I am also concerned about the legacy of fraud in the H-1B 
program. At a hearing over a decade ago we heard about 
petitioning companies that were nothing more than a post office 
box, an abandoned building or a fictitious address and a single 
telephone number. We heard about H-1B workers slated for 
employment as janitors or nurses aides or store clerks.
    Apparently, such fraud is not a thing of the past. Despite 
a $500 anti-fraud fee that was instituted in 2004, 2008 Office 
of Fraud Detection and National Security issued an assessment 
that found outright fraud in at least 13 percent of randomly 
selected cases. Still, the H-1B program usually does operate to 
the benefit of America, American employers, especially high 
tech employers, and American workers. It is the job of Congress 
to ensure that it always does.
    Thank you, Mr. Chairman. Yield back.
    Mr. Gallegly. I thank the gentleman.
    At this time I recognize the Ranking Member of the full 
Committee, Mr. Conyers, for an opening statement.
    Mr. Conyers. Thank you, Chairman Gallegly.
    Long ago when Zoe Lofgren was a commissioner in California, 
Morrison and I were working on the same problem. We were 
waiting for her to come along and give us the legislation that 
solved the problem then and solves it now. Create more green 
cards. And so here we are today with a lot of great witnesses 
trying to figure out how we do it.
    The second thing is to raise the compensation for the kind 
of engineers that we need. A computer analyst could make 
$70,000 instead of $50,000 and there would be a great movement 
toward that area.
    In addition, we need a--the concept of portability in terms 
of being able to carry these rights from one employer to the 
next. Now this is a vast secret never before revealed in a 
Judiciary Committee hearing, employees that have H-1B visas are 
at the mercy of their employers. This is shocking, I know, and 
may require another hearing in and of itself. They work 
frequently at lower pay, they can't--there is no question they 
can't change jobs or they will be sent back.
    Chairman Gallegly said that 50 percent of the engineers are 
foreign nationals that are graduating. We think it is even more 
than that. And so the most simplistic answer that we can arrive 
at is, fine Chairman Emeritus, just add more H-1B's. That is 
all we need to do and you will be okay, right? Wrong. What we 
need are more green cards and the bill that Morrison and I got 
Lofgren prepared for was to do just that, staple a green card 
to a foreign national's graduating certificate when he 
graduates from an engineering school. You would then relieve 
the problem of most of them ending up going back home to become 
our competitors when most of them didn't want to go, really 
wanted to stay.
    So, I thank you for the hearing and I look forward to the 
witnesses' comments.
    Mr. Gallegly. I thank the gentleman from Detroit.
    And with this we will move on with our witnesses. We have a 
very distinguished panel of witnesses today. Each of the 
witnesses' written statements will be entered into the record 
in its entirety.
    I ask that the witness summarize his testimony in 5 
minutes, if possible, or as close to it, to help stay within 
the time constraints that we have. We have provided lights down 
there and while I am not going to be real hard on it, I just 
ask your cooperation so we can get through this hearing and 
give everyone an opportunity to ask the questions that they 
would like to ask.
    Our witnesses are started by Mr. Donald Neufeld. Mr. 
Neufeld serves as associate director of Service Center 
Operations at the U.S. Citizenship and Immigration Services. He 
oversees all planning, management and execution of functions of 
Service Center Operations. He began his career with the 
Immigration and Naturalization Service in 1983 and joined the 
management team in 1991. In this capacity Mr. Neufeld has held 
various management positions.
    Mr. Bo Cooper serves as partner in Berry Appleman & Leiden 
in Washington D.C. He provides strategic business immigration 
advice to companies, hospitals, research institutions, schools 
and universities. Mr. Cooper served as general counsel of the 
Immigration and Naturalization Service from 1999 until 
February, 2003 when he became responsible for the transition of 
Immigration Services to the Department of Homeland Security. 
Mr. Cooper earned JD at Tulane University Law School and holds 
a bachelor of arts from Tulane University.
    Dr. Ron Hira is associate professor of public policy at 
Rochester Institute of Technology where he specializes in 
policy issues on offshoring, high-skilled immigration, 
technological innovation and the American engineering 
workforce. Ron is also a research associate with the Economic 
Policy Institute. Dr. Hira holds a Ph.D. in public policy from 
George Mason University, an MS in electrical engineering from 
GMU and a BS in electrical engineering from the Carnegie Mellon 
University.
    And our fourth witness is Mr. Bruce Morrison. Well, I don't 
know if I am promoting you or demoting you, you know. Bruce 
serves as chairman of the Morrison Public Affairs Group. He is 
a former Member of the House here and I had the honor of 
serving with him for several years, from 1983 to 1991. During 
this time he was a Member of the Judiciary Committee and served 
as Chairman of this Subcommittee. Additionally, he served, from 
1992 to 1997, on the U.S. Commission on Immigration Reform. Mr. 
Morrison holds a bachelors degree in chemistry from MIT, a 
masters degree in organic chemistry from the University of 
Illinois and earned his JD from Yale Law School.
    Welcome to all of you. And we will start now with Mr. 
Donald Neufeld.
    Mr. Neufeld?

  TESTIMONY OF DONALD NEUFELD, ASSOCIATE DIRECTOR OF SERVICE 
  CENTER OPERATIONS, U.S. CITIZENSHIP AND IMMIGRATION SERVICES

    Mr. Neufeld. Chairman Gallegly, Ranking Member Lofgren and 
Chairman Smith and Ranking Member Conyers--is that better? 
Great.
    I'm Donald Neufeld, the associate director of the Service 
Center Operations Directorate of U.S. Citizenship and 
Immigration Services. I appreciate the opportunity to appear 
today to discuss the H-1B program and our efforts to combat 
fraud and misuse of this visa classification.
    USCIS is responsible for evaluating an alien's 
qualifications for the H-1B classification and for adjudicating 
petitions for a change to H-1B status for aliens who are 
already in the United States. The majority of H-1B petitions 
are for specialty occupations which require both the alien and 
the position to meet specific criteria related to education and 
licensing.
    USCIS approval of an H-1B petition does not guarantee 
issuance of a visa or admission to the United States. For an 
alien seeking H-1B status outside the United States the 
Department of State will determine whether he or she is 
eligible for a visa. Finally, U.S. Customs and Border 
Protection is ultimately responsible for making admissibility 
determinations at a port of entry.
    In general, the number of aliens issued H-1B visas or 
otherwise accorded H-1B status may not exceed the statutory cap 
of 65,000 per fiscal year.
    In administering the H-1B program USCIS is mindful of fraud 
concerns and has implemented a robust anti-fraud program. In 
May, 2004 USCIS created the Office of Fraud Detection and 
National Security, FDNS, as the organization responsible for 
fraud detection and prevention. In 2010 FDNS was elevated to a 
directorate raising the profile of this work within USCIS and 
increasing the integration of the FDNS mission into all facets 
of the agency's work.
    In February, 2005 FDNS developed and implemented what is 
now known as the Benefit Fraud and Compliance Assessment in an 
effort to quantify the nature and extent of fraud in selected 
benefits programs. USCIS conducted a study of the H-1B program 
involving a review of 246 randomly selected petitions filed 
between October 1st, 2005 and March 31st, 2006. After reviewing 
the findings of this report, USCIS issued guidance to 
adjudicators, in October, 2008 that provided them with fraud 
indicators, instructions on the issuance of requests for 
evidence and other notices and instructions on the referral of 
petitions to FDNS when further investigation is warranted. On 
January 8th, 2010 USCIS issued a memorandum to provide further 
clarification to adjudicators what constitutes a valid 
employer/employee relationship in the H-1B context. In March, 
2010 USCIS headquarters personnel provided training to 
adjudicators on the updated guidance.
    This guidance and training provides USCIS officers with 
tools that help define and identify eligibility requirements 
and provides clear instructions on how to handle petitions when 
fraud is suspected. USCIS has also developed other tools for 
verification. In July, 2009 USCIS implemented an administrative 
site visit and verification program. Currently FDNS conducts 
unannounced post-adjudication site visits to verify information 
contained in randomly selected H-1B visa petitions. In fiscal 
year 2010 USCIS conducted 14,433 H-1B site inspections.
    USCIS continues to analyze results from these site 
inspections and to resolve those cases that have not been 
reaffirmed or revoked.
    Finally, this year USCIS provided adjudicators with a new 
tool for adjudicating H-1B and other employment-based 
petitions. The Validation Instrument for Business Enterprises, 
otherwise known as VIBE, uses commercially available data to 
validate basic information about companies, organizations 
petitioning to employ alien workers. USCIS adjudicators review 
all information received through VIBE, along with the evidence 
submitted by the petitioner in order to verify the petitioner's 
qualifications. VIBE creates a standardized means of validating 
whether a petitioning company or organization is legitimate and 
financially viable.
    In conclusion, USCIS has taken a number of steps to 
guarantee the integrity of the H-1B program while ensuring U.S. 
employers have access to specialized, temporary workforce 
needed to compete in the global market.
    On behalf of USCIS Director Alejandro Mayorkas and all of 
our colleagues at USCIS, thank you for your continued support 
of the H-1B program and for giving us the tools to combat H-1B 
fraud.
    Mr. Chairman and Members of the Committee, thank you again 
for the opportunity to provide information on the status of our 
program and I looked forward to answering your questions.
    [The prepared statement of Mr. Neufeld follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

                               __________
    Mr. Gallegly. Thank you very much, Mr. Neufeld.
    Mr. Cooper? Mr. Cooper, could you pull that in a little 
closer. I'm having a little harder time hearing Mr. Neufeld. 
Okay, that's fine. Thank you.

               TESTIMONY OF BO COOPER, PARTNER, 
                 BERRY, APPLEMAN & LEIDEN, LLP

    Mr. Cooper. On? So sorry.
    Mr. Chairman, Ranking Member Lofgren, Ranking Member 
Conyers and distinguished Members of the Subcommittee, I am 
grateful to you for the opportunity to join you today.
    I think it is dead on for this debate over the role of 
high-skills immigration in our country's economy to focus on 
jobs. Where Congress comes out on this issue will have a great 
deal to do with who we are as a country, in the decades to 
come, and with whether America will continue to lead the world 
in innovation and growth.
    This debate has been clouded over the last years by a 
fundamental misconception that the job supply in the U.S. is a 
zero sum game and that a job occupied by a foreign professional 
is a job lost to a U.S. worker. This is a misconception that 
has got to be shed.
    Our country has always operated on the principle that the 
more brain power we can attract from around the world, and the 
more creativity, invention and growth we can achieve here at 
home. Fortunately there appears to be a re-emerging consensus 
to stick to this principle. The comments that many of you made 
in your opening statements are in harmony with the comments of 
the President in his State of the Union address this year and 
comments from Majority Leader Cantor, just last week, noting 
the importance of attracting bright professionals into our 
economy and decrying an immigration policy that would lose them 
to foreign competitors.
    The H-1B is an indispensible part of the high-skilled 
immigration ecosystem. It is often the only way to get a highly 
skilled foreign professional on the job quickly when the 
economy needs them. It is often the only way to bring in person 
with pinpointed skills to provide a crucial temporary service. 
And it is overwhelmingly the only way to bring a bright foreign 
talent into a permanent role as a contributor to the U.S. 
economy.
    Our approach to the H-1B program should be governed 
fundamentally by the physician's oath, ``First, do no harm.'' 
Those of us who practice immigration law see in our offices 
every day the power of the H-1B program to fuel the U.S. 
economy. Let me offer just one small example. Sonu Aggarwal is 
the CEO of Unify Square, a company in Redmond, Washington. He 
came here as a student at Dartmouth and MIT and entered the 
workforce with an H-1B. He's the author of the original patent 
on enterprise--an author of the original patent on enterprise 
instant messaging technology, the seed of his current company. 
His product is used, for example, by healthcare providers to 
monitor patients' conditions in real time through their cell 
phones.
    Now a U.S. citizen he runs a company with 34 employees 
around the world, 24 of which are in the United States. Of 
these 24, 22 are U.S. workers. H-1B's are used in obviously 
sparing numbers, when they are needed to fill an extremely hard 
to find skill set. They have got a monthly growth today of 10 
percent per month. One H-1B, 22 jobs for U.S. workers and 
counting, that is the main story of what the H-1B program does 
for the U.S. economy.
    H-1B employers also pour massive sums of money into 
programs to train U.S. workers and educate U.S. students and to 
fund their own enforcement. Since FY 2000 employers have paid 
to the Federal Government over $3 billion in training and 
scholarship fees and anti-fraud fees. That is 58,000 college 
scholarships for U.S. students, through the National Science 
Foundation, and training for over 10--for over 100,000 U.S. 
workers.
    The debate over the H-1B often focuses, as it ought to, on 
whether the program is simply a source of cheap labor to 
replace U.S. workers. And I think the starkest evidence against 
that is the pattern that Mr. Gallegly identified in his opening 
remarks. When the economy is strong demand is high, when the 
economy drops it plunges. If the H-1B were a source of cheap 
labor the exact opposite would happen. This is not a new point, 
but you can't have an honest discussion about the H-1B program 
without keeping that point front and center.
    I certainly acknowledge that there is fraud and abuse 
within the H-1B program to some degree. I have spent many, many 
years in government, there is no such thing as a government 
benefits program that doesn't have people coming to hoodwink it 
at times. Yet, responsible employers would welcome improved 
enforcement and rather than an extravagant rewrite of the 
program in ways that might harm the program's ability to serve 
the U.S. economy and to create new U.S. jobs, the Government 
has already mapped out the key ways in which these abuses tend 
to take place.
    As was noted in the USCIS fraud report that Mr. Neufeld 
talked about, they have identified the key patterns of misuse. 
It is employers who bring an H-1B here and fail to pay the 
required wage; an employer who cheats the system by calculating 
the required wage in an inexpensive market and then employing 
the person in a more expensive market where the wage would be 
higher; or shell employers that don't even exist. These are 
serious violations, but they are violations that can be 
enforced under today's rules. And before Congress embarks on a 
major revision of the program's contours that might have 
counterproductive effects on its job growth capabilities, it 
ought to use its oversight authority to examine whether the 
Government's enforcement resources are being used to maximum 
effect.
    To conclude, it is clear that making the H-1B program the 
best it can be cannot, by itself, provide high-skilled 
immigration policy that will enable us to, in the President's 
words, ``out innovate the rest of the world,'' employers of 
highly skilled professionals tend to want to bring, they 
typically want to bring their employees permanently into the 
U.S. economy. And observers across the board, I think, view 
that as a net positive for the United States and efforts to 
shorten that bridge or to eliminate it are critical parts of 
the reform puzzle. But, if we are to attract the bright minds 
from around the world that will help U.S. employers keep jobs 
in this country, grow more jobs for U.S. workers and remain the 
world's innovation leaders, a robust and effective H-1 program 
is essential.
    Thanks very much.
    [The prepared statement of Mr. Cooper follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Gallegly. Thank you, Mr. Cooper.
    Dr. Hira?

 TESTIMONY OF RONIL HIRA, Ph.D., ASSOCIATE PROFESSOR OF PUBLIC 
           POLICY, ROCHESTER INSTITUTE OF TECHNOLOGY

    Mr. Hira. Mr. Chairman, I should have learned the lesson, 
right? [Laughter.]
    Thank you Chairman Gallegly, Ranking Member Lofgren, 
Chairman Smith and the Members of the Subcommittee for inviting 
me to testify here today.
    I have been studying the H-1B program and its effects on 
the American engineering labor force for more than a decade 
now, so this is a great opportunity for me. I have concluded in 
that study that the H-1B program as it is currently designed 
and administered does more harm than good and to meet the needs 
of both the U.S. economy and American workers, the title of 
this particular hearing, the H-1B program needs immediate and 
substantial overhaul.
    The goal of the program is to bring in foreign workers who 
complement the American workforce. Instead loopholes in the 
program have made it too easy to bring in cheaper foreign 
workers with ordinary skills who directly substitute for rather 
than complement American workers. So the program is clearly 
displacing American workers and denying opportunities to them.
    The program has serious design flaws and legislation is 
needed to fix them. Administrative changes alone or stepped up 
enforcement, while necessary, are simply not sufficient to 
correct the problems.
    First, the program allows employers to legally bring in 
foreign workers at below market wages. That is not a question 
of fraud, this is legal they are able to bring in workers at 
below market wages. How do we know this? There is lots of 
evidence, the most obvious one is that employers have said so. 
They told the GAO that they in fact bring in workers at below 
market wages.
    Second, the program--pardon me, second the program allows 
employers to bypass qualified American workers and to even 
outright replace American workers with H-1B's. This is not a 
theoretical or hypothetical possibility, in fact there have 
been news reports about Americans training foreign replacements 
at companies like Wachovia, AC Nielsen and Pfizer.
    Third, because the employer holds the visa, an H-1B 
worker's bargaining power is severely limited and they can 
easily be exploited by employers.
    One of the consequences of the loopholes has been that in 
fact what the Government is doing with this policy is giving a 
competitive advantage to certain kinds of businesses, certain 
types of business models, and that is offshore, outsourcing 
firms. So in fact what the Government is doing with this--with 
the current policy is subsidizing the offshoring of American 
jobs.
    For the past 5 years the top H-1B employers--most of the 
top H-1B employers are using the program to offshore tens of 
thousands of high wage, high-skilled American jobs. Using the 
H-1B to offshore is so common that in fact the former commerce 
minister of India dubbed the H-1B program the outsourcing visa.
    Even more disturbing though than all of this, is the fact 
that the H-1B program has lost legitimacy amongst the American 
high tech workforce. And those are critical workers, not only 
because, as you have all pointed out, science and technology 
and engineering is critical to not only the tech sector and 
national security but economic growth in general, but these are 
the incumbent workers who are the ambassadors for their 
profession. And what they are telling students is to shy away 
from these careers because they feel like the, you know, the 
cards are stacked against them.
    In conclusion, let me say that I believe that the United 
States benefits enormously from high-skilled, permanent 
immigration. We can, and should encourage the best and 
brightest to come to the United States and settle here 
permanently, but the H-1B program is failing on both accounts. 
First it is clear that many H-1B workers are not the best and 
brightest. Instead, they possess ordinary skills and are 
filling jobs that could and should be filled by American 
workers.
    And just to give you some examples, you mentioned earlier 
that the GAO found that 54 percent of H-1B applications were at 
the lowest wage level, that is the 17th percentile. So they 
aren't bringing in the best and brightest through this. And to 
give you another example, Infosys had a labor certification 
application for an--for 100 computer programmers, to bring in 
100 H-1B computer programmers at $12.25 an hour. That is hardly 
the best and the brightest.
    Another big misconception is, and this has been pointed out 
also today already, is that the H-1B is often equated with 
permanent residents. One of my recent studies found that in 
fact many of the largest H-1B employers sponsor very few of 
their H-1B's for permanent residents. And let me give you one 
example of this. Between 2007 and 2009 Accenture hired nearly 
1,400 H-1B's, that is how may petitions they actually received. 
Yet during that same timeframe, during that same 3 years, they 
only sponsored 28 H-1B's for permanent residence. That is a 2-
percent yield. I don't think anybody would argue that 2 percent 
is a very good success rate.
    Our future will be enhanced by high-skill immigration, but 
its foundation critically depends on our homegrown talent. And 
I look forward to your questions during the discussion.
    [The prepared statement of Mr. Hira follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Gallegly. Thank you very much, Dr. Hira.
    Bruce, welcome back to this chamber, I am sure you are 
familiar with it. And we welcome your testimony.

           TESTIMONY OF BRUCE A. MORRISON, CHAIRMAN, 
                 MORRISON PUBLIC AFFAIRS GROUP

    Mr. Morrison. Thank you, Mr. Chairman and Ranking Member 
Lofgren, Ranking Full Committee Member Conyers and other 
Members of the Committee. It is a pleasure to be here and thank 
you for having me. I am appearing today on behalf of IEEE-USA 
which is an organization of over 210,000 engineers and 
technical--technically trained people who work in the computer 
industry and students who are training to fill those jobs in 
the future. And their role is critical in the future of out 
country.
    I think that the one point of consensus that there ought to 
be on both sides of the aisle, and I think that there is at 
this table, is that the future of American jobs and American 
prosperity is what we should be focused on. And I would hope 
that the product of this hearing is to look at that question.
    And I would say that the future to American jobs is to 
retain, in this country, those graduates who are foreign-born 
and in our universities who have these critical science and 
technology skills that our country needs in order to grow in 
the future. Doing that successfully will make a huge difference 
for American workers already here and Americans in the future. 
If we fail to do that we will pay the price in important ways 
and we should avoid that.
    Now I think that the focus to do that needs to be on fixing 
the green card program. And why do I say that? I know a little 
bit of the history. The H-1B program was created in 1990, it is 
a successor to an earlier program, the H-1 program. And the 
changes that this Committee and the Congress made at that time 
really echoes a lot of the debate that is going on right now, 
trying to target the program better, narrow it, raise the skill 
levels that are required and encourage the use of green cards 
instead to bring highly skilled workers here on a permanent 
basis.
    Well, 20 years have gone by, we really haven't quite got 
the job done, the debates are the same. We need to redouble our 
efforts. We need to focus our attention on these STEM students 
that we currently have and make sure that we compete them but 
that we compete for them in a way that does not disadvantage 
American workers and that we compete for them in a way that is 
effective in beating out our competitors in who we keep. And 
that is where green cards provide such an advantage.
    The discussion about what to do in the regulatory realm to 
try to level the playing field for H-1 workers ought to teach 
everybody about the limits of regulation. I would think there 
ought to be a consensus on both sides of the aisle that the 
market is a better way to preserve good terms and conditions 
than endless regulations and the attempts to have Government 
enforce them. We are not enforcing the H-1B regulations now as 
a country, we never really have and despite the best efforts of 
USCIS and the Department of Labor, I doubt that we ever will. 
Yet, green card workers don't need all those protections 
because they have the power of the marketplace and employers 
don't have any special advantage over green card workers 
because they are just like American citizens, they can pick up 
and leave any time they want. And the way you keep them, as an 
employer, is not by coercion, but by good terms and conditions 
of employment. That is the way our labor market works. It is 
not perfect but it sure is better than a regulatory regime. H-
1B is a surrender to regulation when the market will solve the 
problem.
    Green cards can be abused also. Green cards can be given to 
workers who don't need to be here, but let's focus on the 
people we know we want to keep, people who are getting advanced 
degrees today in STEM fields from American universities. They 
clearly are a valuable resource and they will go somewhere else 
if we don't keep them. Let's focus on them. Let's make sure 
that they are selected in a quality fashion and that when they 
are added to our workforce we will all be benefited because 
there will be greater productivity and greater jobs.
    Green card workers can start their own businesses, H-1B 
workers can't. Green card workers are on a path to become 
American citizens, H-1B workers are not. Our competitors use 
guest worker permits to recruit against us. We have always done 
better because we ask people to become Americans, we don't ask 
them if we could please borrow their labor for a while and then 
we will see. That is a much more powerful recruiting tool, it 
has always worked for this country, it is why we are the great 
immigration country of the world. And for this critical 
competition, for the job creation we need today, with 9 percent 
unemployment, let's focus immediately not on what could divide 
people and the controversies over H-1B but what could unite us 
all. Let's get these new graduates who are going to be coming 
out on a green card path to become Americans and create 
American jobs.
    [The prepared statement of Mr. Morrison follows:]

    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Gallegly. Okay. Thank you. Appreciate your testimony.
    At this time we will begin with questions and the Ranking 
Member, Ms. Lofgren will begin.
    Ms. Lofgren. Well thank you very much, Mr. Chairman and 
thanks to all of the witnesses. The testimony is excellent and 
I think having a hearing of this nature is very important 
because what I am hearing from the policy witnesses is that 
there is value in retaining top talent, but the H-1B program 
needs work, to understate it.
    You know, I come from Silicon Valley and I hear sometimes 
from my constituents concern about some of the H-1B visa 
holders. And I asked the Department of Labor to run prevailing 
wage numbers for various occupational classifications in 
Silicon Valley and one of the things that shocked me actually 
was when they came back with the average wage for a computer 
systems analyst in my district. They said--well, it didn't 
surprise me it was $92,000 except that the level one for H-1B 
was $52,000. I mean that is $40,000 less than what people are 
paid. So small wonder that there is a problem here. That needs 
to be fixed if we are going to keep this program. We can't have 
people coming in and undercutting the American educated 
workforce, that is just a problem.
    And I don't blame really even, you know, I've got a number 
of wonderful companies in my district that do excellent work, 
but I mean this is the system they are in as well, and then you 
have got H-1B visa holders who get frozen in place because they 
can't move really because they have got a petitioner, if you 
have got a legit employer. And as time goes on their skill 
set--I mean inevitably they are going to do more sophisticated 
work just as their coworkers are doing, but they are still 
frozen at the wage.
    And so this creates problems and I think it is something 
that we need to fix and that we can fix. But the real issue, as 
has been discussed, is how can we capture with permanent visas, 
the individuals who we want to keep to create companies, to do 
start-ups, to create jobs for American workers.
    And I am interested, Mr. Morrison, you are here 
representing the IEEE but traditionally IEEE, which I think is 
the largest organization of computer scientists in the world, 
and the Semiconductor Industry Association didn't always see 
eye to eye on immigration issues, and yet they came together on 
a proposal for immigration reform--can you explain how that 
happened and what the bottom line recommendation is?
    Mr. Morrison. Yes. First of all, I think that Congresswoman 
Lofgren, you and the Chairman and others have received a letter 
today from those two organizations and I would hope that it 
would be made part of the record of this hearing. These 
organizations don't agree about everything, but they have a 
focus on the high-skilled, technical workforce that they 
represent in two ways. IEEE as the representative of workers 
and students in that area and the SIA as representing companies 
who employ those people. And both of them together agree that 
the priority is to keep these skills here in the United States 
to build employment and production and research and development 
here in the United States. I think that is shared.
    And they have decided to put aside differences and focus on 
what they have in common, which we hope this Subcommittee might 
do as well. And that to do that they see the long-term benefits 
of permanent residence as key to getting rid of the contention 
that exists, the potential exploitation, the unfair competition 
that goes on using H-1B.
    Ms. Lofgren. Well----
    Mr. Morrison. So that is why they came together, because 
they will both prosper if they keep this talent here.
    Ms. Lofgren. I appreciate that. And hopefully we in the 
Congress can use SIA and IEEE as a role model for our own 
behavior of doing what is right for the economy of our country 
instead of fighting over, which we often do unfortunately. I 
think we can gain consensus.
    You know, I have a question, if I could, for Mr. Cooper. 
You talked about when the H-1B program works, and it does. I 
mean I have met some fabulous, I mean talented people. The fact 
that there are abuses sometimes doesn't mean that there aren't 
also successes. But, if we had a choice to make enough green 
cards available to keep our best or brightest or to increase 
the H-1B program, if you had to choose between those two, which 
would you choose?
    Mr. Cooper. They are obviously both very important. You 
know, as I mentioned before, the H often is--you know, there is 
such a thing as important temporary use and you have got to 
have a way to get people in for that. You have also got to have 
a way to get people on the job quickly, which the green card 
system, at least today, is not set up to do.
    Ms. Lofgren. Right.
    Mr. Cooper. So they are both critical. Between the two, if 
I had to pick one, you know, frankly I think green cards are 
the ultimate goal in the end because employers typically wish 
to bring their H-1B's--I think it is fair to say that employers 
typically wish to bring their H-1B's permanently into the U.S. 
workforce. Again, I think that is something that all of us 
agree is a good thing for the U.S. economy.
    You know, what often happens, a very common pattern is that 
an H-1B employer will hire a professional worker in the H-1B 
process, start the green card process right off the bat and 
concurrently be trying to push through the green card process 
at the same time the person goes for their H-1B status. And 
often when the 6 years of H-1B status is over they are still 
not all the way through the green card process.
    Ms. Lofgren. I understand. Yes. I've met many people in 
that--I would ask unanimous consent for an additional minute--
--
    Mr. Gallegly. Without objection.
    Ms. Lofgren [continuing]. So I can ask one question from 
our Government witness.
    I have some frustration that I will disclose, that we have 
consensus that a need for green cards for highly talented 
graduates with Ph.D.'s from American universities, and yet from 
'92 to 2007 we failed to issue the 140,000 employment based 
green cards, 9 out of 16 years. Can you explain why we are not 
actually utilizing the visas that we have provided for in the 
law?
    And I have a second question on enforcement. You know, the 
USCIS as well as the GAO analysis of the H-1B program 
identified the same problem, which is that the abuses of the H-
1B program tend to be localized in a particular kind of firm, 
staffing companies, small companies, smaller firms, firms with 
income less than $10 million a year. And yet, the enforcement 
has been random. And I even hear--I mean whether or not the 
petition is valid, you know, I don't think anybody should ask 
to a see a floor plan of Cisco to see if the company exists, I 
mean that is absurd, and yet that has happened. So I am just 
not understanding what the enforcement strategy here is when we 
know the targeted problem and yet the enforcement seems to be 
scattered.
    Mr. Neufeld. Can you hear me?
    Ms. Lofgren. Yes.
    Mr. Neufeld. I will take your first question first. I can't 
really speak to why in years past visa numbers were not all 
utilized in the employment-based categories. I can say that for 
the last few years we have been using up all of the visa 
numbers in the categories. And as you know, the unused visa 
numbers in the employment-based roll over to the family-based 
and the family-based visa numbers that are unused roll over to 
the employment-based.
    Ms. Lofgren. And sometimes neither one gets used because 
they are rolling back and forth and then they are lost.
    Mr. Neufeld. That is correct. We currently have about a 
145,000 pending employment-based adjustment of status 
applications for which there are not visa numbers available and 
so those applications for adjustment of status are just held in 
abeyance. The fact that they are held in abeyance and that they 
have been pre-adjudicated actually enables us, working with the 
Department of State, to better manage the use of all visa 
numbers, because now they are--as we do as much in the way of 
adjudication as we can without actually putting on an approval 
stamp and issuing the green card, we go--when we determine that 
one of these cases is approvable, but for a visa number, we 
request the visa number of the Department of State and in their 
IVAM system then they have visibility into the number of 
pending requests. And so that actually helps them in 
establishing the priority dates in the visa bulletin, they can 
see, with priority data a certain amount what the demand will 
be.
    And so we have been quite successful in that regard, in 
terms of using up the visa numbers with the Department of 
State's help in managing the visa bulletin.
    The other question was with respect to enforcement. And I 
want to be clear, even though I am not responsible for the 
Fraud Detection and National Security Directorate, but I an 
speak to the fact that our enforcement efforts are not solely 
focused on random site visits. We also have provided to our 
adjudicators the information that resulted from that benefit 
fraud assessment in terms of fraud indicators and adjudicators 
can refer cases to the FDNS because of those fraud indicators 
or because of information that is contained in a specific 
filing and then the Office of FDNS can determine whether to 
pursue that, perhaps do an inspection, you know, a targeted 
inspection of that employment location or to even refer the 
matter to----
    Ms. Lofgren. Well, I know--I don't want to abuse the 
Chairman's time, but I--you should and the Department should 
make a decision on a case-by-case basis. I am not suggesting 
just because a company is big that, you know, a petition should 
be approved. But, it is absurd to ask a company that is 
publicly traded and has, you know, $300 million worth of real 
estate and is the largest employer in a county, whether they 
exist or not. I mean that is a waste of time.
    Mr. Neufeld. No. And I agree with you entirely. And the 
implementation of the--of VIBE is one of the efforts that we 
have undertaken to provide adjudicators with information that 
they can rely on in--so that they are not solely----
    Ms. Lofgren. Well, but maybe----
    Mr. Neufeld [continuing]. Basing their decisions on what 
the file----
    Ms. Lofgren.--I should get with you afterwards because this 
is not--it is not working the way you are describing and it is 
a waste of resources when there is an enforcement issue that 
really needs to be done.
    Mr. Chairman, I would like to ask unanimous consent to 
enter into the record statements that were prepared for today's 
hearing from our colleague Congresswoman Judy Chu on the 
Committee, from the Institute of Electrical and Electronic 
Engineers, the IEEE, and from the Semiconductor Industry 
Association; the Partnership for a New American Economy; the 
Asian American Center for Advancing Justice; and the American 
Jewish Committee.
    Mr. Gallegly. Without objection.
    Ms. Lofgren. Thank you. I yield back.
    [The information referred to follows:]

    
    
    
    


                               __________
                               
                               
                               
                               


                               __________
                               
                               
                               
                               


                               __________
                               
                               
                               
                               
                               
                               

                               __________
                               
                               
                               
                               
                               
                               


                               __________
    Mr. Gallegly. Seeing that my time is expired. [Laughter.]
    We do have a very good bipartisan relationship on this 
Committee and I respect the gentlelady's right to be wrong 
periodically. So---- [Laughter.]
    Ms. Lofgren. And you also.
    Mr. Gallegly. Mr. Neufeld, what happens when the Office of 
Fraud Detection and National Security discovers fraud or 
technical violations in a petition? Are such cases denied or 
revoked by ISCIS or are such cases referred to USCIS or ICE for 
further investigation?
    Mr. Neufeld. I was checking to make sure my mic was still 
on. Yes, they--actually the Office of Fraud Detection and 
National Security can do either, which ever makes sense on that 
particular case. If--they can either refer it to an adjudicator 
with their findings and then the adjudicator can institute--
issue a notice of intent to revoke. It gives the petitioner a 
chance to respond to the information that we have. But then if 
there is in fact fraud, then the adjudicator can revoke the 
previously approved petition.
    Also, the Fraud Detection National Security officers can 
refer the matter to ICE for either further investigation or for 
prosecution.
    Mr. Gallegly. Are you satisfied that the system is working?
    Mr. Neufeld. Yes.
    Mr. Gallegly. Dr. Hira, in your testimony could you explain 
what you mean when you say that some companies use their H-1B's 
to engage in knowledge transfer?
    Mr. Neufeld. Let me turn my microphone on.
    Sure. Knowledge transfer is a term of art, it the site 
actually a euphemism for forcing American workers to train 
their foreign replacement. Basically with they are doing is 
transferring their knowledge and capabilities to either an H-1B 
worker or in many cases an L-1 intercompany transfer worker and 
that worker may stay, that guest worker may stay right there on 
site and/or may take that knowledge and take it back to their 
home country and offshore the work and do it from offshore. And 
this is--it is common enough to have its own term. Right, 
knowledge transfer.
    Mr. Gallegly. Mr. Morrison, you were recently quoted as 
stated that, if I knew in 1990 what I know today about the use 
of H-1B visas for outsourcing, I would not have drafted it so 
that staffing companies of that sort could have used it. You 
want to elaborate a little bit on that?
    Mr. Morrison. Sure. And let me say that in another life I 
represent a staffing company in the healthcare field. So I 
don't think staffing as a way of participating in providing 
goods and services in the American market is a bad thing. The 
bad thing is when there is a model that does not participate in 
the American workforce, by hiring Americans and sometimes 
foreign-born, just like American employers do, and providing 
services in a staffing model as opposed to in a direct 
employment model. Those are choices that employers can 
legitimately make and there are reasons to use both.
    But, the model that seems to have developed is a model of 
companies that exclusively use H-1B visas and sometimes L-1's, 
and I don't know how they do that legally, and bring a 
particular nationality to the United States and provide 
services and then often transfer those workers back with the 
knowledge that Dr. Hira was just describing, going back and 
becoming intellectual property for somebody else. That kind of 
activity I think is very troubling. It is not really legitimate 
staffing in the U.S. labor market, it is something else. And I 
think the H-1B program shouldn't countenance that kind of 
structure.
    Mr. Gallegly. I think--Mr. Cooper, can you expand a little 
bit on your point that many employers of H-1B workers pay more 
than the prevailing wage?
    Mr. Cooper. Yes, Mr. Chairman. The way that the----
    Mr. Gallegly. Hit the button.
    Mr. Cooper. The ways that the rules work is that it is not 
actually the prevailing wage that is required of an employer, 
it is either the prevailing wage which is sent by the 
Department of Labor or what that employer actually pays to 
workers doing the same job in the same place, which ever is the 
higher those two. And what actually happens in the marketplace, 
especially when the economy is strong, is you know, we have got 
to remember that what is--with this group of people that 
typically are the subject of H-1B's there is a massive 
competition for them between employers in the U.S. and 
employers in competitor countries and among employers in the 
United States. And so you know, that competition can heat up 
and often the actual wage is much higher than the prevailing 
wages.
    The prevailing wage is reflected in these LCA's that are 
filed with the Department of labor and that is unfortunately, 
you know, the--what gets reflected in a lot of the statistical 
debate But, in the marketplace it is actually the--a much 
higher wage that is being paid to H-1B workers.
    Mr. Gallegly. Thank you, Mr. Cooper.
    Mr. Conyers?
    Mr. Conyers. I yield to Jackson Lee.
    Mr. Gallegly. Ms. Lee.
    Ms. Jackson Lee. I thank the Ranking Member of the full 
Committee for his courtesies. I thank the Chairman of this 
Committee and the Ranking Member for an astute assessment of a 
very important issue.
    I have had the privilege of serving on the Imigration 
Subcommittee, I believe for almost a decade, serving as a 
Ranking Member and remember discussing this issue of H-1B 
visas, Mr. Hira, particularly on the question of where are the 
talented Americans who could do the same jobs. In one instance 
we were carefully looking at the question of African-American 
engineers who had raised a concern about their ability to be 
employed.
    At the same time I have to be a practical legislator and 
realize that there were periods in our history, which were not 
50 years ago but recent, when our friends in Silicon Valley and 
elsewhere made some eloquent arguments in the earlier stages of 
their development. I am very glad to report, however, that 
every youngster coming out of college is either a venture 
capitalist and they want to be involved in IT. We have the 
talent. It doesn't mean that H-1B visas cannot find a place but 
I join with the Ranking Member on raising the question about 
the validity and the better structure of green cards.
    And as I do that, I think it is important--I would be 
remiss if I did not put on the record, and I know my--the 
collegiality of the Chairman and the Ranking Member leads me to 
be inspired that we will have an opportunity to look at 
comprehensive immigration reform and really fix this system 
that doesn't suggest amnesty and it doesn't violate the virtues 
of my friends on the other side of the aisles, but it will keep 
youngsters who are here, called Dream Kids, able to become 
citizens and to contribute well to the United States. I hope 
the Administration will be actively engaged in this, Mr. 
Neufeld.
    So let me try to pinpoint one of the angst that I think can 
be fixed immediately. Our lawyers tell us, and those of us who 
are lawyers know not to lawyer our cases here, that the statute 
that deals with wages for these workers is very broad. The one 
about prevailing wages and I think Mr. Cooper acknowledges the 
highest rate is kind of confusing. The Government has all kinds 
of authority, we are already sort of baffled why we are not 
fulfilling our obligation on the 140,000 that my colleague 
asked about, we are confused about that. But I would like to 
know really the details of these low wages.
    I appreciate, Mr. Cooper, but I believe you are on the hot 
seat because we are in--able to do a lot of things by making or 
raising questions and I want to know whether you have reached 
out to Department of Labor to use the power you already have to 
really not have a nebulous prevailing wage but to actually have 
a requirement of what it is that has to be paid if we are using 
these visas, in order for us to be competitive and not to harm 
American workers.
    My second question is the idea of having this 90 day period 
when an American worker is retained, Mr. Neufeld, and we hear 
the rumor that they are training the H-1B visa person who then 
boots out the well trained American worker. The low wage, the 
multiple use of H-1B visas for talents that are already here. 
That may not be your jurisdiction, but certainly it is your 
jurisdiction to make sure that we are not dumbing down the 
wages of Americans and really unfairly treating these 
individuals, because I am going to get to my next question 
quickly.
    But let me just get that as quickly as you can, please. I 
want you to go to the Department of Labor and work this out. I 
want to have a wage that we can all understand.
    Mr. Neufeld. Fortunately or unfortunately we--I can only 
enforce the statute and the regulations as they are written. 
And that doesn't provide USCIS with the authority to look any 
further than the labor condition application that was filed 
with the Department of Labor and to make sure that they--that 
employers are in fact paying either the prevailing wage or 
the----
    Ms. Jackson Lee. I think you can make an inquiry. That is 
not an unacceptable act. I can call the Department of Labor. 
You are not prohibited from calling the Department of Labor. If 
you are intimidated, use your leg. affairs and have leg. 
affairs from each department just try to get a sense of you 
moving forward on this issue.
    Go ahead, you can finish your answer.
    Mr. Neufeld. Oh, I can--I am happy to engage our office of 
legislative affairs to work with theirs in that vein.
    Ms. Jackson Lee. Mr. Chairman, I ask for additional 1 
minute.
    Mr. Gallegly. Without objection, 1 minute.
    Ms. Jackson Lee. I thank you very much.
    Let me also ask a question about the idea of do you have 
anything that you hold as a standard of American workers being 
replaced or do you do that only--you think that is only a Labor 
Department issue?
    Mr. Neufeld. Well, it is mostly a Labor Department issue 
but we do--there are requirements that change depending on what 
percentage of the workforce of a particular employer is made up 
of H-1B employees. And for those employers who exceed, I 
believe it is 15 percent of their workforce or comprised of H-
1B employees, then the labor condition application that is 
filed with the Department of Labor contains some additional 
attestations that are required in terms of the--not bringing 
folks in to replace current workers and I also believe that it 
is----
    Ms. Jackson Lee. All right.
    Mr. Neufeld [continuing]. Not a requirement only----
    Ms. Jackson Lee. I just want to get quickly to Mr. 
Morrison.
    Mr. Morrison, give me again your most forceful argument for 
the value of green cards in the spirit of we must create more 
jobs, we must be able to respect the American worker and we 
also understand we need a fair immigration policy.
    Mr. Morrison. I don't promise it will be the most forceful, 
I will try my best. I think that permanent residence is our 
competitive advantage, number one, as a country. And putting 
people on the road to becoming Americans is a key part of 
having this work well for the whole country. When people have 
permanent residence they are free to move around the workforce 
and they have market power to enforce terms and conditions of 
employment, which H-1B workers don't really have and you have 
to have a complicated regulatory scheme to get at it.
    In addition to that, those people who are here permanently 
can start their own businesses and create additional jobs that 
way. And there have been many who have done that when they 
finally got green cards. But by holding this process back for 
years at a time, by a combination of lack of visa numbers, 
bureaucratic delays and the attractiveness of the H-1B status 
to employers we miss out on those benefits and we lose many of 
the talent. But----
    Ms. Jackson Lee. Well, I thank the Chairman. I want to be 
able to protect American workers and balance this whole idea of 
immigration reform and generate jobs so that American workers 
stand equal to anyone who seeks to come to this country and 
gain great opportunity, which is the American way.
    I yield back. Thank you.
    Mr. Gallegly. Time of the gentlelady has expired.
    Mr. Gohmert?
    Mr. Gohmert. Thank you, Chairman and appreciate each of the 
witnesses being here today.
    Mr. Neufeld, the Government Accountability Office raised 
concerns over large numbers of H-1B aliens being nationals of 
countries of concern who may be gaining unauthorized access to 
duel use technology with military applications. How does USCIS 
coordinate with the Commerce Department to ensure H-1B 
employers obtain deemed export licenses before employing such 
aliens?
    Mr. Neufeld. Thank you. We recently--USCIS recently revised 
the I-129 Petition which is the form that employers use to 
bring in nonimmigrant employees to include an attestation 
section, that is part six, that--so that it requires employers 
to both acknowledge and attest that they have read and become 
familiar with the export control requirements and to indicate 
whether the employee will have access to controlled 
technologies and if so, to attest that they will obtain the 
appropriate licenses from either Department of State or 
Department of Commerce before allowing them access.
    Mr. Gohmert. There is any follow up or checking on that or 
is it just a statement required?
    Mr. Neufeld. For our adjudication it is just--we do require 
the attestation. If that section is left blank then we will 
request it be completed. And if they refuse then we would deny 
the petition. Other than that, it--the legacy systems that we 
have right now don't allow us to capture that, the responses 
electronically and then share that with the Department of 
Commerce. We are working with them to make the best use of our 
systems that we can. And in response to requests from them, we 
can identify all of the filings by a particular employer that 
may be of interest to them and then allow them access to the 
physical files to review the answers to those questions.
    Mr. Gohmert. Is that always done?
    Mr. Neufeld. Well, this is new. This----
    Mr. Gohmert. Okay.
    Mr. Neufeld [continuing]. Question was just recently added 
and became effective in February.
    Mr. Gohmert. All right. Okay. Just recently, huh? Well and 
sometimes it takes Government a while to--in fact many years. 
People can be encouraged with the Government taking over 
healthcare, if you have got a problem many years later we will 
be able to get around to it.
    But with regard to healthcare, obviously that is a hot 
issue here on the Hill. This country is projected to spent 
$3.75 billion and we are only bringing in 2.1 billion this 
year. We can't afford to keep bringing in people and paying for 
their healthcare. I was curious, on the H-1B petition, is there 
any requirement for a statement as to whether or not any 
hospitalization or medical care is anticipated by the 
petitioner coming in?
    Mr. Neufeld. I have to say that I don't know the answer to 
that question, but I would be happy to look into it and----
    Mr. Gohmert. Okay. Could you provide us a written answer to 
that question as to whether--and not just H-1B, on any petition 
or application for visa, is there a requirement that the 
applicant or petitioner state whether or not any type of 
medical or hospitalization care is anticipated.
    Mr. Neufeld. I will certainly do that.
    Mr. Gohmert. All right, thank you.
    Mr. Morrison, you had stated in your testimony that we 
should create an unlimited green card category for advanced 
degree STEM graduates from quality American universities. And 
of course it may be an interesting question how we determine 
which ones are quality. But when Australia tried something 
similar they found what happened was that the quote, the 
reformers did not anticipate the alacrity with which 
Australia's universities would set up courses designed to 
attract international students looking for the cheapest and 
easiest ways to obtain qualifications and occupations that 
could lead to permanent residence.
    We know in Texas, for example, Texas Tech is--I would 
consider a quality school, yet we just had one of their persons 
here on a visa arrested for plots to kill people and destroy 
things. I am curious, how could we prevent an outcome where 
universities maybe are quality, maybe they are not quality, 
rushing to provide courses that people could come in and take 
so we end up taking people that probably we shouldn't.
    Mr. Morrison. Well, obviously any provision needs to be 
tailored carefully. But, the National Science Foundation does 
identify programs in the country in a tiered system as to the 
level of quality based on the kinds of grants that they are 
able to achieve. So the government already makes judgments 
about levels of quality of our universities, especially in this 
area of science and technology which is what we are talking 
about. So I would suggest we use that expertise which is--
already exists in the Government in judgments about where the 
quality programs are.
    And those quality programs depend on competitive grant 
programs from the NSI and the NIH and others in order to 
survive. They can't just add people to their programs and be 
successful. They have to have high quality students to do that 
work and high quality professors. So while, you know, if we are 
talking about----
    Mr. Gohmert. Of course you understand that is not what 
Australia said their experience was.
    Mr. Morrison. Well, I am not an expert Australia. Australia 
relied a lot on points and other things that weren't nearly as 
tailored as the U.S. system is. So I would say you--this 
Subcommittee could write a rule, based on what we already know 
about where the quality is, that could avoid the abuse and 
still take advantage of that talent. And I think that is, you 
know, that is the job that I would hope that you would----
    Mr. Gohmert. And you are willing to put your entire 
credibility on the line by swearing here that somebody in 
Government has expertise? [Laughter.]
    Mr. Gallegly. The time of the gentleman is expired.
    Mr. Morrison. Thank you, Mr. Chairman.
    Mr. Gallegly. Mr. Conyers?
    Mr. Conyers. Thank you very much, Mr. Chairman.
    Morrison, you were a workers guy, now you are a free market 
type talking guy. What happened to you---- [Laughter.]
    Mr. Conyers. Since you--is there any reasonable explanation 
for your change of philosophy?
    Mr. Morrison. Oh, I am not sure I made a change of 
philosophy, but I wanted to say is this, if we want to protect 
workers we need to give them choices. And what green cards do 
is give them choices. Sometimes Government can do things, but 
Government's ability to do things is limited.
    You are all familiar with the reports that show the 
Department of Labor doesn't really even enforce our wages and 
hours laws right now. I mean we have a whole lot of laws on the 
books that don't get enforced. So, if that is the case let's at 
least use the power of the market when it helps to create a 
level playing field. And I think compared to the H-1B, the 
green card playing field is a lot more level.
    Mr. Conyers. Well, that is a reasonable explanation. 
[Laughter.]
    But, I remember when you used to think the free market 
wasn't very free.
    Mr. Morrison. It is quite expensive actually, but well, 
maybe I am guilty maybe I am not. I--either I have learned 
something or there was a misunderstanding.
    Mr. Conyers. Mr. Hira, I want to compliment you for 
bringing up a subject that is important to almost everybody 
with an industrial sector in their state. When you start--would 
you explain a little more about the Government subsidizing 
offshore American jobs through immigration policy?
    Mr. Hira. Sure. If you just look at the top employers, the 
top ten for exactly, employers, recipients of H-1B's, it is 
essentially a who's who of the major offshore outsourcing 
firms. The--they are mostly based in India but many of them are 
even based here in the U.S. They are the major beneficiaries. 
And what--so what we are doing with this H-1B program, because 
there are so many loopholes is we are actually giving 
advantages to those particular firms.
    And let me give you examples of two firms that are 
competing directly with these offshore outsourcing firms, 
trying to hire Americans. One is a company that has a facility 
in Ann Arbor, Michigan called Systems in Motion and in fact 
they are trying to hire Americans. And they are a very 
interesting company because the CEO and some of the executives 
are actually veterans of the offshore outsourcing industry, so 
they know the exploitation of the H-1B's and the program. And 
what they are finding is that they are put at a competitive 
disadvantage because the firms that are exploiting the 
loopholes can bring in workers at lower wages, train them and 
ship them overseas.
    I think that if we close these loopholes, that we would 
create and/or retain tens of thousands of jobs and that this 
would not cost anything and would not have a major impact on 
the budget. And you could just look at it in terms of the 
numbers of visas that these firms are getting. And it is pretty 
clear they are not bringing them for permanent residence.
    I have done some analysis of that. You know, Tata 
Consultancy brought in 2,400 workers on H-1B's, they applied 
for exactly zero green cards for their H-1B workers. What are 
they using those H-1B workers for? To do offshoring. They are 
the largest Indian IT offshore outsourcing firm.
    So I think these loopholes could be closed. And I don't see 
that at least the folks that Mr. Cooper represents would object 
to those kinds of closing the loopholes, if they really want to 
bring in the best and brightest and keep them here permanently.
    Mr. Conyers. Well, Chairman Gallegly, I think this is 
probably within our jurisdiction too. This is something that I 
think we can examine within the Judiciary Committee.
    Mr. Gallegly. Your point is well taken.
    Mr. Hira. Could I also just--could I just add?
    Mr. Gallegly. Sure.
    Mr. Hira. And the companies themselves have said that this 
is part of what they do in their business model. So executives 
from Wipro, for example, have been quoted in Business Week 
saying they bring in workers for the express purpose of 
knowledge transfer and to take that knowledge and capability 
offshore.
    Mr. Conyers. Well that--makes it kind of convenient for us 
to take care of the business here.
    Mr. Cooper, I appreciated you beginning our discussion that 
this isn't immigrants versus--we are not taking jobs from 
Americans when we move folks with this kind of skill into 
citizenship. I think that was a very important comment.
    And finally, I think that you, Mr. Neufeld, can't we do 
something about this prevailing wage business without--don't 
you have it within your power, your department's power to do 
something about this?
    Mr. Neufeld. What USCIS does is----
    Mr. Conyers. Make it permanent? Well, you will have to get 
together with our good friend the Secretary of Labor and can't 
something be done here?
    Mr. Neufeld. Again, what we can do is make sure that it is 
addressed in the filing of the petition, that they have the 
labor condition application from the Department of Labor that 
says that they will be paying the prevailing wage or the 
higher--the actual wage, whichever is higher. And that is our 
role to make sure that that attestation has--is in there. 
Beyond that it is up to the Department of Labor to determine 
what the prevailing wage is and what is the higher----
    Mr. Conyers. Well, the four tier system ensures that you 
will always hire somebody at the cheapest wage you can. I mean 
that is not hard to figure out.
    Mr. Cooper. May I address that point briefly? One thing 
that I think it is important to keep focused on is what can we 
do with today's rules to make the program better and are we 
losing any opportunities to do so today. And you know, on this 
point of enforcement, there is a great deal of money that is 
put into the Government treasury for this particular purpose. 
With respect to prevailing wages, there are a lot of tools out 
there and it is important for us not to gain a misconception, I 
think an overall misconception of the program is one that is--
that endorses underpayment.
    The Department of Labor has very specific authority to go 
in and investigate and address whether an employer has actually 
slotted an employee into too low a slot on this prevailing wage 
scale. No matter how you calibrate the wages there is always 
the ability to go find cheaper----
    Mr. Conyers. Yeah, but they don't do it.
    Could I get 1 minute more, Chairman Gallegly?
    Mr. Gallegly. Without objection.
    Mr. Conyers. Look, we got a recitation of what we can do 
and how we review and how we oversight. An H-1B that gets a 
job, the first time he squawks, that is the end of it, he is 
shipped back, you never have a chance to investigate anything 
and they know it. So, let's get some reality here going about 
how--we have got a lot of rules, but they don't mean anything 
if you can't change jobs and if you can't lodge a legitimate 
grievance.
    Mr. Cooper. Yes, I think that is a very good point. But one 
thing for us also to keep in mind about that is that--is that 
it is possible for--you know, there are ways for an H-1B worker 
to squawk if they are getting cheated and for the Department of 
Labor to respond. And, it is possible actually----
    Mr. Conyers. What ways?
    Mr. Cooper. You can file a complaint with the Department of 
Labor and they have got the authority to do investigations 
and----
    Mr. Conyers. Please, Cooper, give me a break. [Laughter.]
    I mean the--as soon as that paper hits the employers desk 
or goes to Labor that guy is on a boat back to wherever he came 
from.
    Mr. Cooper. Well, there actually are rules that permit 
pretty freely that employee to go--there is a market, they can 
go work for an employer very readily. You can change jobs----
    Mr. Conyers. H-1B you can't change jobs.
    Mr. Cooper. There's--Congress wrote special rules that 
permit an H-1B to go work for a new H-1B employer----
    Mr. Conyers. Oh, come on.
    Mr. Cooper [continuing]. Called portability.
    Mr. Conyers. And I gave you so much credit when we started 
out this morning with the hearing. I mean look, you--a person 
here on a H-1B better keep his trap shut, work under whatever 
conditions that are given and better not be thinking about 
going to get another job, citing section something 1(b) with a 
paragraph, et cetera. That won't get it in--out of the market 
today.
    Ms. Lofgren. Would the gentleman yield?
    Mr. Conyers. Sure.
    Ms. Lofgren. As you were talking it occurred to me that one 
of the pieces of information that I have never seen--we did 
write in a portability provision and the reason why was to 
prevent kind of this freezing, but I don't know if it has been 
used, you must have statistics that would tell us how often, if 
at all.
    Mr. Conyers. It has never been used.
    Ms. Lofgren. And I would like--I am wondering if--if you 
have it now, tell us. If you don't, could you tell us later how 
often, if at all, the portability provision has been used.
    Mr. Neufeld. I certainly don't----
    Ms. Lofgren. I thank the gentleman for yielding.
    Mr. Neufeld. I certainly don't have statistics here with 
me. I am not sure that we--those statistics exist. If they do, 
of course we will be happy to share them. I----
    Mr. Gallegly. Mr. Neufeld, in the interest of time, we have 
had eleven minutes on this one inquiry, so perhaps you could 
get the information to Mr. Conyers and also Miss Lofgren and to 
the Committee as a whole, to the best of your ability? And then 
if that is not satisfactory there will be opportunity for 
follow up.
    The gentleman from Texas. Well, I am sorry, the gentleman 
from Iowa, the vice-chair of the Committee, Mr. King.
    Mr. King. Thank you, Mr. Chairman. Recognized for eleven 
minutes I presume. [Laughter.]
    I will not do that to you, it makes your job too difficult. 
But I appreciate the witnesses testimony. And I would like to 
add, if we could, bring a certain perspective to this 
discussion that I don't know that has been examined.
    And let me start with this. Is it a safe presumption that 
each of the witnesses at the table were supportive of the Bush/
McCain/Kennedy immigration reform proposal around 2006? And I 
guess I will start on the end then with Mr. Neufeld and go down 
the line, a yes or a no will be helpful, please.
    Mr. Neufeld. Well, as a government employee I don't think 
it is appropriate for me to comment on that.
    Mr. King. I expected that. [Laughter.]
    Mr. Cooper?
    Mr. Cooper. With respect to the high-skilled issues that we 
are addressing today?
    Mr. King. With respect to the full proposal.
    Mr. Cooper. I think it had--I think it was very sound in a 
lot of ways and it had some problems.
    Mr. King. You generally supported it or generally opposed 
it?
    Mr. Cooper. I would say I generally supported it.
    Mr. King. Thank you.
    Mr. Hira?
    Mr. Hira. My expertise is on the high-skill side and on 
that and I would oppose it. I thought it was very bad.
    Mr. King. Thank you.
    And Mr. Morrison?
    Mr. Morrison. Yeah. Mr. King I am here on behalf of IEEE 
and they don't have a position on that specific matter so I 
don't think it is appropriate for me to say anything on this 
record. If you would like to query me on a personal level at 
another time I would be happy to answer that.
    Mr. King. And they did not have a position in 2006, would 
that be also your testimony?
    Mr. Morrison. They didn't have a position on the overall 
comprehensive reform bill. That is right.
    Mr. King. Okay. Thank you. And that is also an appropriate 
answer, I want to acknowledge.
    And so now I want to start back down through this list and 
pose a couple of other questions that we have got a little bit 
of a parameter to work off of. You know, first I will just make 
this statement and I will offer it to anybody to seek to rebut 
it. But I pose this question as more than rhetorical, but where 
there are two different categories of illegal--of immigration 
we need to deal with before we can get to H-1B, and that is 
legal and illegal. And I want to make the statement that--and I 
would ask this question, how many illegals are too many and I 
am going to say the universal answer needs to be one. And so if 
anyone would care to rebut that statement I would offer the 
floor to you, or if we can accept that as a foundation to carry 
on the discussion, I will let the record show that no one 
sought to rebut that statement.
    So, let's go on to the next one then. Is there such a thing 
as too much legal immigration? And as a Government official I 
will exempt the gentleman, but Mr. Cooper, I would start with 
that. Is there such a thing as too many--of legal immigration, 
whatever the category?
    Mr. Cooper. I think that with respect to the categories we 
are dealing with today there is not enough legal immigration.
    Mr. King. And Mr. Hira?
    Mr. Hira. I think that there can be too much and I think 
there needs to be controls, in terms of numbers and the 
impacts, for example, on jobs and wages can really be 
significant.
    Mr. King. Thank you.
    And Mr. Morrison?
    Mr. Morrison. Immigration should be driven by the American 
national interest and the Congress should determine what that 
interest is and set numbers that reflect that interest. I agree 
with Mr. Cooper that in this area of high-skilled, advanced 
degree, STEM graduates that we have been talking about, we need 
more numbers. And more importantly than numbers, we need people 
to be able to quickly----
    Mr. King. Okay. That would be your----
    Mr. Morrison:--gain that status.
    Mr. King. Thank you. That would be your editorialization on 
this. But I think I misheard Mr. Cooper, I thought he said in 
this era. You mean in this area, not in this era?
    Mr. Cooper. In this area.
    Mr. King. Okay, thank you. Because it is a big difference 
in the area and that is this, I will just take my position here 
and that is that there is such a thing as too much legal 
immigration. Too much legal immigration also drives down wages 
and over supplies in the workforce. And we are in a precarious 
position here in this country. And I would agree with Mr. 
Morrison to this extent, I believe an immigration policy should 
be designed to enhance the economic, the social and the 
cultural well being of the United States of America or which 
ever nation is drafting its policy, selfish interest if you 
will. And developing our economy with that as an important 
component of it, I look at this and I think H-1B's as a 
separate category have significant merit, but written into the 
broader picture of this when we don't take into account the 
growing numbers of legal immigrants that are taking up the 
growth in jobs, even when our economy was healthy we were 
bringing in between 1 and 1\1/2\ million legal immigrants a 
year which occupied the growth in new jobs completely over at 
least a period of a decade.
    So I think we should look at this thing more broadly than 
we do, not within the narrow H-1B bounds, but within the 
broader scope of what is a whole policy here instead of a part 
of a policy. I know I can go over here and justify about every 
appropriations that will come up on the floor of the House and 
if I vote for every one we will bust the budget. Well, we have 
a budget here of population too and skills and today we have a 
welfare state that has been created over the last--well, it 
hasn't taken a full century, we know that have had witnesses 
before this Committee that testified that there are 71, at 
least 71 means tested welfare programs and we have a subsidy of 
low wages in other categories of immigration that are 
accommodated because of the means tested welfare that we built. 
So that does tend to subsidize the employers.
    I believe we need a stronger, tighter labor market and 
labor is a commodity like any other commodity that you need. 
And it sets its value by supply and demand in the marketplace. 
So I get uneasy when I hear the former Chairman Conyers talk 
about prevailing wage. I don't think we should support any kind 
of prevailing wage. I don't think Government can set the wage, 
I think the economy sets the wage.
    And I think that if we have got some 15 million unemployed 
in the country and when you add that to the broader perspective 
of that there are another 6 or 8 million that are underemployed 
or have dropped out of the workforce and you look at the 
Division of Labor or the Department Labor statistics that show 
that there are 80 million Americans of working age that are not 
working, we are in a condition here where we have a lot of 
people that are riding and not enough that are rowing.
    And so I think we need to look at H-1B's within the broader 
perspective of what would be the good overall policy for the 
United States of America. And I think we should look at some of 
these countries that have a point system where they score all 
of their immigrants according to their--the legal immigrants 
according to their ability to assimilate and the skill level 
they have, the talent that they have. Those things are--run 
very high on my scale.
    So I just want to tell you, philosophically, I agree with 
upgrading America, but I think we should do it on a broader 
scale.
    Thank you. And I yield back.
    Mr. Gallegly. Gentleman from Florida, Mr. Gowdy? I'm sorry. 
Mr. Ross?
    Mr. Ross. Thank you. You just----
    Mr. Gallegly. Gowdy is from South Carolina.
    Mr. Ross.--That's okay, you just complimented him.
    Mr. Gallegly. Greenville, Spartanburg. That's right. I 
didn't mean to slander you. [Laughter.]
    Mr. Gowdy. You did. You did.
    Mr. Ross. Thank you, Mr. Chairman.
    One of the issues I want to go back to is the intellectual 
property protections, because I think it is rather 
disconcerting, especially in my district where I have a 
telecommunications company that is using H-1B visas. And then 
once they have expired then they are not only moving the 
employees back but they are moving the whole operation back. 
And I know that good employers will have confidentiality 
agreements to protect patents and proprietary inventions and 
things of that nature, but Mr. Neufeld, shouldn't there be 
something that protects that our economy, that protects the 
jobs here in this country from this transfer of knowledge and 
transfer of jobs going overseas?
    It seems to me that some of these companies are using, as 
part of their business plan, this particular tactic where they 
will have them over here for 3 years or 6 years and then move 
the entire operation overseas.
    Mr. Neufeld. That may well be, but in my position in--as 
head of the operations component within USCIS, you know, my job 
is to make sure that, you know, the adjudicators have the tools 
and the knowledge to enforce the laws and the regulations as 
they are written----
    Mr. Ross. I understand.
    Mr. Neufeld [continuing]. And we can't go beyond that.
    Mr. Ross. Mr. Hira, you mentioned about it. You mentioned 
that we need to close loopholes. Any suggestions as to how we 
ought to close the loopholes there?
    Mr. Hira. Specifically to this issue or----
    Mr. Ross. Yes, sir, specifically to that issue.
    Mr. Hira. I think this is something where the private 
companies have to protect their intellectual property. I think 
it is pretty difficult or I can't--right now I can't imagine a 
way, a good way for Government to sort of control that.
    Mr. Ross. But I mean even to the extent where companies 
themselves are actually probably looking at the bottom line and 
seeing that they can do it better with their labor costs now 
overseas, even though they have trained them over here. It is 
essentially H-1B on-the-job training----
    Mr. Hira. Yeah, and I----
    Mr. Ross [continuing]. It is going to be equitable.
    Mr. Hira.--I think one of the areas that hasn't been looked 
at is how offshoring is getting into Government contracting. So 
to what extent are U.S. government contracts being offshored. 
Nobody has really looked into that carefully or how H-1B's are 
performing, how many of them are performing, how they are 
performing on these types of government contracts.
    Mr. Ross. Mr. Cooper, you spoke about the prevailing wage 
and you indicated there are some--in most instances that the 
prevailing wage is here, the market wage is up here. Are there 
any instances where the prevailing wage is the higher wage?
    Mr. Cooper. Not that I am aware of, but you couldn't pay 
lower than the prevailing wage. That sets the rock bottom 
minimum that an employer must pay.
    Mr. Ross. Right. But I am saying, if we--but in your 
example you said that just about everything is paid above the 
prevailing wage. So I guess what I am saying is what good is 
the prevailing wage then if the market wage is being paid?
    Mr. Cooper. The rules are either pay prevailing or what you 
actually pay to similar workers in similar jobs, whichever is 
the higher. You cannot go below the prevailing wage, but you 
can go above, if that is what it takes to get the worker that 
you need. And that commonly happens either when you are trying 
to recruit somebody from overseas or when you are trying to 
recruit somebody for another worker. And on this portability 
issue, I mean I can tell you that we file portability or change 
of employer petitions for an H-1B moving from one employer to 
another all the time. It is appropriate----
    Mr. Ross. I appreciate that and I was just going to get 
back to my question.
    Mr. Cooper. Sorry.
    Mr. Ross. That is okay.
    Mr. Hira, you've mentioned about prevailing wages, though. 
And you think that there are some problems with it. And could 
you expound on that?
    Mr. Hira. Sure. It is really well known in the IT sector 
especially that the H-1B workers are cheaper. Not in all cases, 
there are some very highly skilled workers, but there is a 
competitive advantage to bringing in H-1B workers. And I am 
actually just trying to find the quote, but you know, there is, 
you know, industry experts as well as CEOs of--or executives of 
some of these firms who have actually admitted this, as much, 
that their wages are below market and that is what gives them 
the competitive advantage.
    In my study of the offshore outsourcing industry, just 
looking at finances, where they have developed their 
competitive advantage, it is clear that they get a wage 
advantage, not only of doing the work offshore, but their on 
site labor is much cheaper.
    Mr. Ross. Do you think that this H-1B program has 
facilitated age discrimination?
    Mr. Hira. I think there is no doubt that there is age 
biases within the technology sector. And if you look at the age 
profile of H-1B workers they tend to be much younger than the 
typical worker in those particular sectors in the U.S. So it 
certainly enables it. Whether it definitively actually is 
causing that, I don't--I can't say for sure.
    Mr. Ross. Thank you. Mr. Morrison, real quick question. I 
note that according to the statistics we have been given the 
quotas for these visas have been taken up really very quickly, 
in some instances the first quarter of the year, one actually--
the proceeding--last quarter of the first year and as late as 
the second quarter of the year where these visas have been 
given. And it seems to me that the demand is constantly 
increasing each year to increase the cap on the H-1B visas.
    What bothers me, as a layperson and looking at this rather 
simply, we have got 9 percent unemployment and yet we increase 
the number of petitions, we reach our cap earlier and earlier. 
Is that indicative of a lax of educational and vocational 
training standards in this country?
    Mr. Morrison. Well first, the demand for H-1B's is somewhat 
lower right now than it was a few years ago. But the 
perspective of IEEE and my perspective, my testimony, is the 
solution is not to expand the H-1B program, the solution is to 
use the green card program, to expand that where--in a targeted 
way, for STEM workers so that we bring people permanently and 
we bring the right people and we give them a chance to be 
permanent Americans and make that kind of contribution and 
compete effectively with other countries that would like to 
have those skills. So that I think is a better answer than 
raising the H-1B cap.
    Mr. Ross. Thank you. I see my time is up and I yield back.
    Mr. Gallegly. I thank the gentleman from Florida, Mr. Ross.
    And at this point I yield to the gentleman from South 
Carolina, Mr. Gowdy.
    Mr. Gowdy. Thank you, Mr. Chairman. I know reinforcement is 
coming up I may well find myself in Florida. I hope not, 
because I love South Carolina. [Laughter.]
    Mr. Hira, I want to ask you about perhaps a little smaller 
niche which would be areas fraught with fraud or abuse within 
the H-1B process. Give me your top three areas that are ripe or 
potentially rife with abuse.
    Mr. Hira. Well, in terms of the loopholes themselves there 
is no what we would call labor market test. So companies can go 
out and bypass Americans altogether and in fact can replace 
Americans with H-1B workers. And this is contrary there's--to 
sort of conventional wisdom or popular belief. They can 
actually replace American workers. They can legally, right now, 
pay below market wages and it is pretty clear that they have 
built business models around this. And there is a variety of 
different business models. Some are domestic where they are 
small job shops, but some are very large like these offshore 
outsourcing firms which are publicly traded and so on.
    The other area where I think there needs to be a lot more 
scrutiny where there hasn't been is that's H-1B dependent 
companies. These are companies that have more than 15 percent 
of their employees in the U.S. on H-1B's. So if you think about 
that, some of these companies have 60, 70 percent of their 
worker force in the U.S. as guest workers, maybe even more than 
that, 80 percent. And we are not talking about a couple 
hundred, we are talking about 10,000 workers here as guest 
workers. They hire almost no Americans. They somehow are able 
to meet the extra criteria that they have go through to bypass 
Americans, but they are able to do that.
    And let me just give you a sense of the figures. Infosys, 
for example, over a 3-year period got almost 10,000 H-1B 
workers. You know how many Americans did they hire? Probably a 
couple hundred.
    Mr. Gowdy. With respect to violations, intended or not of 
either the letter or spirit of the process, are there effective 
investigative tools to determine whether or not the letter or 
spirit is being violated?
    Mr. Hira. Well I think Mr. Conyers pointed out an important 
problem with the Administration and that is that it is almost 
entirely dependent on a whistleblower. That H-1B worker, their 
legal status in the U.S. depends on their employment and their 
H-1B visa. So it is very unlikely that they are going to come 
out and blow the whistle. There have been a small number of 
cases but there is very little bit--little evidence that there 
is lots of these H-1B workers who are blowing the whistle, even 
though they are being adversely affected.
    Mr. Gowdy. Are there sufficient investigative tools once 
the whistle has been blown? For instance, subpoena power?
    Mr. Hira. I don't know enough about that. So----
    Mr. Gowdy. Mr. Cooper, do you know whether or not the 
Department of Labor has subpoena power with respect to 
employers?
    Mr. Cooper. There is no specific subpoena power in the 
statute but they can and they do very often go out and do wage 
and hour investigations, make sure that people are being paid 
the wage they are supposed to. And they have got significant 
enforcement authority. For instance----
    Mr. Gowdy. When you say significant, I am a prosecutor so 
jail is significant to me.
    Mr. Cooper. Well----
    Mr. Gowdy. What are the potential consequences for an 
investigation that doesn't turn out well for the employer?
    Mr. Cooper. Well, here is one that would frighten an 
employer, short of jail. If an employer is found to have 
willfully underpaid an H-1B and if that takes place in the 
context of a displacement of a U.S. worker, they can be fined 
in the tens of thousands of dollars, but more important, they 
can be kicked out of the system, no one H-1B's for 3 years.
    Mr. Gowdy. Is there subpoena power to investigative claims 
such as that?
    Mr. Cooper. There is investigative but not subpoena power, 
if I am not mistaken.
    Mr. Gowdy. But what power would you say is tantamount to 
subpoena power?
    Mr. Cooper. Oh, I am sorry, wage and hour investigators can 
and they do go into employer's workplaces and they can--you 
know----
    Mr. Gowdy. They can----
    Mr. Cooper [continuing]. There they can see records and so 
forth.
    Mr. Gowdy. So they have full access to all the records, 
even absent administrative or legal subpoena power?
    Mr. Cooper. That is my understanding. I mean I can tell you 
our firm does--you know, they do these wage and hour 
investigations of employers of the H-1B program.
    Mr. Gowdy. Your firm does?
    Mr. Cooper. Our firm has represented employers who have 
been the subject of these.
    Mr. Gowdy. Does the investigative agency have the full 
panaplea of investigative tools that the bureau or other 
Federal agencies would have?
    Mr. Cooper. I don't know about the comparison but they can 
certainly see the things that would help them--would--that they 
need to know to make that evaluation. They can see payroll 
records, they can see what--they can find out what the employer 
is actually doing, they can access that against what the 
required wage level should be and so forth.
    Mr. Gowdy. What is the definition of willful? You said a 
willful violation.
    Mr. Cooper. It is basically on purpose, knowing, you know, 
knowing that you should have done otherwise.
    Mr. Gowdy. The fact that you did it last week and are doing 
it again this week, would that be tantamount to willful?
    Mr. Cooper. I think that would help indicate.
    Mr. Gowdy. All right. Thanks.
    Mr. Gallegly. I thank the gentleman from South Carolina.
    I thank all of our witnesses this morning. Welcome back 
Bruce, you are always welcome. And with that the Subcommittee 
stands adjourned.
    [Whereupon, at 11:52 a.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record
















                                





































                                







                                





                                







                                











                                









                                







                                













                              ATTACHMENTS


























                                 
