Southern California Edison has laid off thousands of its IT employees and replaced them with lower-paid workers from India with H-1B visas.
The electric company, which provides services to almost 14 million customers in the Southern California region, was able to do this because of a loophole in the nation's immigration law, the Los Angeles Times is reporting.
The immigration statute Southern California Edison has been able to exploit allows the company to hire employees with H-1B visas. These are temporary work permits, which are given to foreigners who have "specialty occupations" that require "highly specialized knowledge" and a bachelor's degree.
While the purpose of the H-1B visas is to allow employers to hire foreigners for positions in which they can't find enough sufficiently trained American workers, it is not supposed to be used to hire cheaper labor from other countries, as is the case with Southern California Edison, the Times is reporting.
"Americans should be outraged that most of our politicians sit idly by while outsourcing firms hijack the nation’s temporary foreign worker programs," according to Ron Hira of The Economic Policy Institute at Howard University.
"A majority of H-1B visas are now being used by firms that displace American workers and facilitate the offshoring of high-wage jobs," he added.
According to Hira,
hiring Indian IT employees via outsourcing allows the electric company to save as much as 40 percent in wage costs.
Edison's American employees earned $80,000 to $160,000 per year, not including benefits. The average salary for experienced workers is about $120,000 per year.
The Indian workers make $65,000 to $71,000 per year, accord to the tax filings of the Indian outsourcing firms, Tata Consultancy Services and Infosys, providing labor to Edison. Those two firms are among the largest recipients of H-1B visas.
"They told us they could replace one of us with three, four, or five Indian personnel and still save money," one laid-off Edison worker told The Times.
"They said, 'We can get four Indian guys for cheaper than the price of you.' You could hear a pin drop in the room," the worker added.
In addition, the laid-off workers argue that their jobs aren't that specialized to justify the hiring of foreign labor.
According to the Times, Edison argues that it's not exploiting the law because its not the one hiring the foreign workers, but that the outsourcing companies are doing the hiring.
Both companies have faced legal scrutiny in the past, although they deny any wrongdoing. Tata faced a class-action lawsuit by workers, alleging that the firm cheated them out of their wages and U.S. tax refund checks, which was settled in 2013 for $29.8 million.
Infosys was fined $34 million by the Justice Department over allegedly defrauding immigration officials.
According to ComputerWorld,
the Senate has taken notice of the Edison layoffs.
Alabama Sen. Jeff Sessions, chairman of the Senate Immigration Subcommittee, mentioned the layoffs in a speech in early February criticizing H-1B visas. In that speech, he said that Edison is hiring "foreign employees who have come in under the H-1B visa program for the sole purpose of taking a job ... and they work for less pay too often."
Sessions says that President Barack Obama wants to double the number of H-1B visas, which the Alabama Republican says is already "a growing problem in the high-tech industry."
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