In a well reasoned Memo, the American Immigration Lawyers Association has requested the USCIS rescind the Neufeld Memo dated January 8th . Of particular interest is the portion about IT Consulting companies. The Neufeld Memo refers to this segment of H-1B users pejoratively as “Job Shops”. In fact, there is a legitimate need for such IT Consulting companies in a field that is constantly evolving. Large employers are ill equipped to move small groups of consultants from one location to another specifically to address a short term need. It is this requirement that IT consulting/staffing companies best address.
The demand for short term placement (6 months or less) has never really been affected by the recession. However, demanding companies document an employer-employee relationship (read right to control) has led to a serious crisis among smaller consulting companies that rely on a second layer to place consultants at an end client site.
It is generally believed that small to medium IT Consulting companies are best equipped, due to their connections, to find qualified talent. The larger IT Consulting Companies (read Infosys, TCS, Patni, etc.) are primarily Indian Companies that operate in the U.S. market. Smaller companies, on the other hand, are most likely started by immigrants turned entrepreneurs who are based in the U.S. By inducing an artificial crisis in the IT Consulting/Staffing industry, the USCIS is driving business to India based companies. These companies normally use the L visa option to bring qualified individuals, thereby avoiding the need to satisfy the requirements imposed by the Neufeld Memo. L visa holders are not required to be paid the prevailing wage (based on the wages of a cross section of similarly employed individuals in the industry). We believe, this trend will affect salaries of U.S. workers adversely and thereby worsen the current unemployment situation.
The Memo rightly argues that Congress never intended to bar IT Consulting/Staffing companies from engaging in third party placements. In fact, if they did, they would have done it specifically when they came up with successive versions of the Immigration and Nationality Act. More importantly, Congress levied a surcharge and a fraud fee on the H-1B visa specifically to address training U.S. workers and preventing fraud.
We applaud the AILA effort and hope this conversation with the USCIS ultimately results in a positive change for U.S. IT Consulting/Staffing companies.