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"I'm sharing news about it because this experience has taught me the H-1b Visa program needs to change to protect others in the future." It's surprising to me

"I'm sharing news about it because this experience has taught me the H-1b Visa program needs to change to protect others in the future." It's surprising to me that Disney was able to replace its local workforce by foreigners via H-1b visas, since I always thought that companies making use of this type of visa were required to prove that they would not be able to find an employee with the required qualifications in the US? Firing an employee to replace him with an H-1b holder seems to completely contradict this requirement. Also, reading the visa requirements it seems that the company would be forced to pay an H-1b employee a salary which is equivalent to that payed to a "normal" employee performing the same function, so there does not seem to be a huge financial benefit in this either. Can anyone explain this?

protomyth 11y ago
They hired them through a third-party, thus Disney had to justify nothing. Look at the list of H1B awards and you'll see the big body shops.
- pgrote 11y ago
  I am having trouble understanding your point and hoping you can clarify it. Disney contracted with this company to perform this action. Isn't Disney responsible for accepting these actions?
  - Balgair 11y ago
    So Disney contracts out the work to these body shops. The H1-B guy is an employee of the contracted-to firm, not of Disney. Disney is simply contracting out the work to a cheaper company. The contracted-to company says they can't find the workers, has enough lawyers to actually prove it, hires H1-Bs, and then contracts them to Disney.
  - exelius 11y ago
    Disney doesn't ask questions about how people are procured. From Disney's perspective, they're just hiring a company to take over technical operations and support. Technology is honestly not Disney's core competency, so it makes sense to outsource to someone who can do the same work with a lower cost base because it IS their core competency. They just have to sign a contract with Cognizant/Wipro/Infosys/etc that says they will provide managed services covering X, Y and Z products for $X million per year. Managed services contracts allow a contractor to have near complete control over personnel decisions; the client doesn't ask questions about how they can do it so cheap because they have no say in the matter anyway. Managed services contracts are managed against SLAs, so as long as you meet your SLAs, you get paid.
    - talmand 11y ago
      I would somewhat disagree with the thought that technology is not Disney's core competency. Technology is a really, really big deal for Disney and has been for a long time. It is a major part of their day-to-day across the entire company and they are quite competent at it. They didn't hand these tasks over to someone else because they were somehow better at it or Disney's people were incompetent. I simply cannot believe that.
      - exelius 11y ago
        Technology is not their core competency, marketing is. All of their technology would be far less valuable without Mickey, Elsa and Cinderella plastered all over it. Their C-suite may have decided that their technology department was too expensive and the needs of the business could be adequately served by an outside firm. Quality likely didn't factor in to the decision; so long as it was good enough to not be a roadblock for their marketing teams.
        talmand 11y ago
        But what are they marketing? It isn't just their characters and movies. Disney is huge and the majority of it heavily relies on technology of many types, including their marketing. I would say they don't have a single core competency, it is a multi-faceted company.
      - prostoalex 11y ago
        This is the entity that controls Disney entertainment parks. I can see how in-house software engineering is important for some of their entities like Pixar, for Disneyland/Disneyworld it's hardly core competence.
        talmand 11y ago
        Except that almost the entirety of the theme parks are run by technology to rival any other part of the company.
    - 11y ago
  - dspillett 11y ago
    All Disney have done from their "you can't prove anything else" point of view is cut costs by finding a cheaper source of local labour through a 3rd party. They have no control over how said 3rd party arranges for the cheaper labour to be made available, or at least no control that can be proven beyond doubt. In fact they probably have no interest at all in how the people get to them - it is none of their business and something to concern the 3rd party only. At least that is my reading of the situation.
    - jonlucc 11y ago
      In fact, if Disney had control over hiring decisions by the contractor, they'd open themselves up to co-employment issues.
    - deleted 11y ago
      [deleted]
    - sremani 11y ago
      Anyone who contracts work to Cognizant knows the composition of the labor-pool. To play ignorant is beyond hilarious, esp. when your CTO is named Tilak Mandadi.
  - hibikir 11y ago
    It's the same as any consulting arrangement, common in big companies. My current contracting client has about 20% of their IT staff in house, and the rest is consultants like me. This is done often for accounting reasons: The employee is an expense, accounting-wise. I am paid out of a project, and employed only while the projects is there, so my salary is considered a capital investment. In my specific case, I am far more expensive than their employees, but accounting wise, my expense is far more convenient. I do not work for my contracting client: I work for an intermediate company. How I get paid, what is my visa status... it's all none of their business. The same thing happens here. No company is laying off Americans to hire H1-Bs. One company hires H1-Bs, another lays off Americans/Green card holders, and the companies just contract a price for the work. Disney can say they have no idea whatsoever of the immigration status of their contacted workforce. Is it shady? Absolutely. Do I like it? Not a bit. But it's not against the law. If there's anyone you could claim might end up in legal trouble at some point, it's the contracting firm, not Disney. But even then, I doubt it: Body shops don't hire a citizen or permanent resident that is any good, because anyone that is good will get better money and working conditions elsewhere. They really don't get applicants.
  - yourapostasy 11y ago
    No. Standard indemnity clauses in contracts, plus realities of current mass communications, judicial, regulatory and political practices, combine to let the abuse transpire as the normal course for a plurality of the visas. HCL/Cognizant/Wipro/Tata/etc.: We offer an awesome IT work force for cheap. Disney/American-company: Great. Of course, by this contract you accept full responsibility for making sure everything you do is legal. HCL/Cognizant/Wipro/Tata/etc.: Naturally. Reality steps in at this point. Various visas can be abused in the transaction. Unless there is national media attention like in this case, there is no pressure on the transaction to curb the abuses. The body shops don't care if one or a handful of citizens successfully complain and overturn their individual positions; these outsourcing+offshoring contracts are typically huge, and a few positions out of hundreds will not tank the deal. Even if abuse is uncovered (and lacking specific facts in even Disney's case, there is no telling if what happened actually would run afoul of any regulations), there are no interested parties with sufficiently deep pockets to judicially prosecute. Even if it was successfully prosecuted judicially, the fines are a slap on the wrist for the big body shops. Even if the case is big enough that the judiciary kicks over the case to the relevant executive agency(ies) for follow up, there is no incentive for the agency to enforce the regulations; the body shops are their biggest "customers". Diminishing volume by banning or restricting to a "sit up and take notice" level like 5% of historical grants, increases the agency's work load per granted visa. It is less effort for the agency to process fewer grants of big blocks of visas, so the big body shops are attractive grant targets for the federal agency's management. Even if the agency's management makes an exception to make its life harder for itself and decides to take action, its life doesn't just become operationally more difficult, but also politically, which can result in budget cuts in retaliation and rebound into more operational challenges. The incentives are quite stacked against individual American workers without access to equivalent collectivized resources that corporations and syndicates have. This won't change until the cost of living in the US comes way down. The low-hanging fruit for US cost of living is real estate (not the buildings, the dirt), as that comprises a minimum of 30% of wages, and in expensive tech metro areas, closer to 50% of wages. That isn't likely to happen short of massive macroeconomic changes, so that is why I don't think this situation will change in the near to mid-term (4-5 decades) future, if ever. I wonder if a Purchasing Power Parity (PPP)-based reciprocal visa exchange might help ameliorate the situation, at least for citizens who can work remotely. For X visas granted to a nation, that nation immediately grants X * PPP-factor resident visas with the same duration to a random lottery of Americans who sign up for it, with Americans displaced by an H1-B receiving priority. Make the identification of displaced workers by time not by job, to avoid companies gaming the system. If a company lays off a citizen within X time, and hires an H1-B into any position within the same time period, regardless of the H1-B's job position or geographic location, then that citizen is counted as displaced. If by PPP the median wage in the US is 10X over India, then for each H1-B granted India opens up 10 visas of the same duration for Americans by lottery (or give first dibs to anyone who is replaced by an H1-B). I don't see this really helping older American workers closer to retirement, but for the subset of the HN crowd who see a streamlined visa process to live in India while building out their MVP and getting revenue traction, taking the "living day-to-day" expenses portion of their seed funding and expanding it out 5-10X could be very attractive.
jerf 11y ago
I'd also be curious if there was some possible form of recompense possible, like a class action suit. (To be clear, I'm just tossing legal terms around that I have a vague understanding of, and I know that's what I'm doing. I'm asking for those who might know more for the real info. Emphasis "know".)
- SlalomStallone 11y ago
  They could if they wanted to, but I don't know if I'd want to be known as the guy that sued his employer. Normally the plaintiffs see very little of the cash if they were to win, it's normally the lawyers that make out like bandits in those cases so it wouldn't be worth it. Most likely anyone at Disney that was facing layoffs and has marketable skills will leave.
exelius 11y ago
I believe the author is simply mistaken that H1-Bs are the problem. H1-Bs are limited enough that they can't be responsible for the volume of outsourcing. They also carry salary parity requirements, and while H1-B holders rarely actually make market salary, the savings still aren't enough to prompt a wave of outsourcing. There was a problem at one time with H1-Bs, but the H1-B lottery has become so competitive that it's not a reliable option for companies to base a business model around anymore. The majority of H1-B recipients these days are foreign nationals who attended American universities, often with masters degrees. Those are the kinds of foreign nationals we want participating in the US economy. The problem today are the L-1 visas, which are relatively unregulated. L-1 visas are for foreign nationals in a management capacity whose companies wish to transfer them to the US. These visas only require that the employer pay the employee's living expenses, and the employee receives the normal salary they would make in their home country (!). All of this is fine until you start to stretch the definition of "management". Which many consulting companies (Tata, Infosys, Cognizant, etc) have started to do -- they can take a person from India who is paid ~$25,000/yr (a good engineer's salary in India), fly him to the US on an L-1 visa, and charge him out to the client at $100/hr. An equivalent US-based contractor rate for the same position would be $125/hr and have margins around 10-15%. But the offshoring firms can undercut US-based contractors by 25%, eat all the travel/housing expenses, and STILL make well over 100% margins. L-1s are actually the problem. There's no salary parity requirement, there's no requirement to look for US-based candidates of equivalent positions, just a requirement that the person is "acting in a management capacity" and has worked for the company for at least 1 year. It's hard to prove that someone is not "acting in a management capacity" -- many of the companies outright lie on the visa applications. What's worse, this type of dishonesty is considered fair game when dealing with corrupt bureaucracies in India or China. But L-1s are fueling the latest wave of offshoring: they allow companies to bring people to the US at offshore prices.
- ececconi 11y ago
  I've seen some firms make org charts that showed that a person on an L-1 visa was "managing" someone when in fact they were an independent contributor.
  - 11y ago
swashboon 11y ago
The key loophole that is use to justify hiring the H-1b is the "qualifications" the basics are that you take their resume, copy all of it, put it as a job posting in a public place and then get no applications for the job because you can use any discrepancies between the applicants resume and the "posting" to say they are not qualified. In reality you will get almost so applicants for the posting anyways.
mnglkhn2 11y ago
This article "Who Really Let the Disney Tech Workers Down: Disney or the H-1B Visa Program?"(http://discuss.ilw.com/content.php?4564-Article-Who-Really-Let-the-Disney-Tech-Workers-Down-Disney-or-the-H-1B-Visa-Program-By-Michael-Phulwani-Esq-David-H-Nachman-Esq-and-Rabindra-K-Singh-Esq)[1] http://discuss.ilw.com/content.php?4564-Article-Who-Really-L... explains the loophole used by Disney. It is very important to understand that Disney did not hire H1Bs, because it couldn't do so. It would have been blocked by the H1b Visa rules. What Disney did was to subcontract a company to take over certain parts of the IT infrastructure. Disney can easily argue that it is in its own economic interest to find and use the path that generates the most profits, while legal. The same as the argument that it is in everybody's own right to use any loophole to pay as little tax as possible. And both arguments are enshrined in what makes America great and allows for everybody to have a shot at the American Dream. Now, you can read my lines above and maybe sense a hint of sarcasm. But I find it disingenuous to blame the H1Bs as being the problem. [1] Who Really Let the Disney Tech Workers Down: Disney or the H-1B Visa Program? By Michael Phulwani, Esq., David H. Nachman, Esq. and Rabindra K. Singh, Esq. (http://discuss.ilw.com/content.php?4564-Article-Who-Really-Let-the-Disney-Tech-Workers-Down-Disney-or-the-H-1B-Visa-Program-By-Michael-Phulwani-Esq-David-H-Nachman-Esq-and-Rabindra-K-Singh-Esq http://discuss.ilw.com/content.php?4564-Article-Who-Really-L...)
deleted 11y ago
[deleted]
jandrewrogers 11y ago
What you are missing is that they must be paid the prevailing wage for the occupation, not the prevailing wage for the company. This is an important distinction. Many large and profitable companies find themselves in the position of systematically paying high wages for objectively mediocre employees, a situation that accreted over time. They may not have always been overpaid, just that over time their value and performance has become decoupled from their wages. If you've ever worked at old behemoth companies, they often have entire divisions full of employees that could be accurately described this way but the business is profitable enough overall to absorb paying large groups of people that do not produce much value. This is a management failure to the extent they allowed value and talent to become decoupled from wages over time. So how does a company correct this so that pay more accurately reflects talent and value created? Asking employees to take a pay cut to reflect their market value is not feasible, particularly if the company is profitable. In these cases, paying the "prevailing wage" to H1b employees to do the same job on a wholesale basis is actually cheaper than the status quo and much easier than suddenly requiring existing employees to have pay that reflects their market value when the entire business unit is systematically overpaying for value. Outsourcing of business units is often about clearing out deadwood divisions where few people have performed to their wage in ages. It is an unfortunate and real problem. It isn't just overseas either, I've seen this done entirely within the US many times. There is no easy way to re-couple wages and performance for a big organization when they have been allowed to drift apart for years so most companies opt for a complete reboot.

protomyth 11y ago

They hired them through a third-party, thus Disney had to justify nothing. Look at the list of H1B awards and you'll see the big body shops.

pgrote 11y ago
I am having trouble understanding your point and hoping you can clarify it. Disney contracted with this company to perform this action. Isn't Disney responsible for accepting these actions?
- Balgair 11y ago
  So Disney contracts out the work to these body shops. The H1-B guy is an employee of the contracted-to firm, not of Disney. Disney is simply contracting out the work to a cheaper company. The contracted-to company says they can't find the workers, has enough lawyers to actually prove it, hires H1-Bs, and then contracts them to Disney.
- exelius 11y ago
  Disney doesn't ask questions about how people are procured. From Disney's perspective, they're just hiring a company to take over technical operations and support. Technology is honestly not Disney's core competency, so it makes sense to outsource to someone who can do the same work with a lower cost base because it IS their core competency. They just have to sign a contract with Cognizant/Wipro/Infosys/etc that says they will provide managed services covering X, Y and Z products for $X million per year. Managed services contracts allow a contractor to have near complete control over personnel decisions; the client doesn't ask questions about how they can do it so cheap because they have no say in the matter anyway. Managed services contracts are managed against SLAs, so as long as you meet your SLAs, you get paid.
  - talmand 11y ago
    I would somewhat disagree with the thought that technology is not Disney's core competency. Technology is a really, really big deal for Disney and has been for a long time. It is a major part of their day-to-day across the entire company and they are quite competent at it. They didn't hand these tasks over to someone else because they were somehow better at it or Disney's people were incompetent. I simply cannot believe that.
    - exelius 11y ago
      Technology is not their core competency, marketing is. All of their technology would be far less valuable without Mickey, Elsa and Cinderella plastered all over it. Their C-suite may have decided that their technology department was too expensive and the needs of the business could be adequately served by an outside firm. Quality likely didn't factor in to the decision; so long as it was good enough to not be a roadblock for their marketing teams.
      - talmand 11y ago
        But what are they marketing? It isn't just their characters and movies. Disney is huge and the majority of it heavily relies on technology of many types, including their marketing. I would say they don't have a single core competency, it is a multi-faceted company.
    - prostoalex 11y ago
      This is the entity that controls Disney entertainment parks. I can see how in-house software engineering is important for some of their entities like Pixar, for Disneyland/Disneyworld it's hardly core competence.
      - talmand 11y ago
        Except that almost the entirety of the theme parks are run by technology to rival any other part of the company.
  - 11y ago
- dspillett 11y ago
  All Disney have done from their "you can't prove anything else" point of view is cut costs by finding a cheaper source of local labour through a 3rd party. They have no control over how said 3rd party arranges for the cheaper labour to be made available, or at least no control that can be proven beyond doubt. In fact they probably have no interest at all in how the people get to them - it is none of their business and something to concern the 3rd party only. At least that is my reading of the situation.
  - jonlucc 11y ago
    In fact, if Disney had control over hiring decisions by the contractor, they'd open themselves up to co-employment issues.
  - deleted 11y ago
    [deleted]
  - sremani 11y ago
    Anyone who contracts work to Cognizant knows the composition of the labor-pool. To play ignorant is beyond hilarious, esp. when your CTO is named Tilak Mandadi.
- hibikir 11y ago
  It's the same as any consulting arrangement, common in big companies. My current contracting client has about 20% of their IT staff in house, and the rest is consultants like me. This is done often for accounting reasons: The employee is an expense, accounting-wise. I am paid out of a project, and employed only while the projects is there, so my salary is considered a capital investment. In my specific case, I am far more expensive than their employees, but accounting wise, my expense is far more convenient. I do not work for my contracting client: I work for an intermediate company. How I get paid, what is my visa status... it's all none of their business. The same thing happens here. No company is laying off Americans to hire H1-Bs. One company hires H1-Bs, another lays off Americans/Green card holders, and the companies just contract a price for the work. Disney can say they have no idea whatsoever of the immigration status of their contacted workforce. Is it shady? Absolutely. Do I like it? Not a bit. But it's not against the law. If there's anyone you could claim might end up in legal trouble at some point, it's the contracting firm, not Disney. But even then, I doubt it: Body shops don't hire a citizen or permanent resident that is any good, because anyone that is good will get better money and working conditions elsewhere. They really don't get applicants.
- yourapostasy 11y ago
  No. Standard indemnity clauses in contracts, plus realities of current mass communications, judicial, regulatory and political practices, combine to let the abuse transpire as the normal course for a plurality of the visas. HCL/Cognizant/Wipro/Tata/etc.: We offer an awesome IT work force for cheap. Disney/American-company: Great. Of course, by this contract you accept full responsibility for making sure everything you do is legal. HCL/Cognizant/Wipro/Tata/etc.: Naturally. Reality steps in at this point. Various visas can be abused in the transaction. Unless there is national media attention like in this case, there is no pressure on the transaction to curb the abuses. The body shops don't care if one or a handful of citizens successfully complain and overturn their individual positions; these outsourcing+offshoring contracts are typically huge, and a few positions out of hundreds will not tank the deal. Even if abuse is uncovered (and lacking specific facts in even Disney's case, there is no telling if what happened actually would run afoul of any regulations), there are no interested parties with sufficiently deep pockets to judicially prosecute. Even if it was successfully prosecuted judicially, the fines are a slap on the wrist for the big body shops. Even if the case is big enough that the judiciary kicks over the case to the relevant executive agency(ies) for follow up, there is no incentive for the agency to enforce the regulations; the body shops are their biggest "customers". Diminishing volume by banning or restricting to a "sit up and take notice" level like 5% of historical grants, increases the agency's work load per granted visa. It is less effort for the agency to process fewer grants of big blocks of visas, so the big body shops are attractive grant targets for the federal agency's management. Even if the agency's management makes an exception to make its life harder for itself and decides to take action, its life doesn't just become operationally more difficult, but also politically, which can result in budget cuts in retaliation and rebound into more operational challenges. The incentives are quite stacked against individual American workers without access to equivalent collectivized resources that corporations and syndicates have. This won't change until the cost of living in the US comes way down. The low-hanging fruit for US cost of living is real estate (not the buildings, the dirt), as that comprises a minimum of 30% of wages, and in expensive tech metro areas, closer to 50% of wages. That isn't likely to happen short of massive macroeconomic changes, so that is why I don't think this situation will change in the near to mid-term (4-5 decades) future, if ever. I wonder if a Purchasing Power Parity (PPP)-based reciprocal visa exchange might help ameliorate the situation, at least for citizens who can work remotely. For X visas granted to a nation, that nation immediately grants X * PPP-factor resident visas with the same duration to a random lottery of Americans who sign up for it, with Americans displaced by an H1-B receiving priority. Make the identification of displaced workers by time not by job, to avoid companies gaming the system. If a company lays off a citizen within X time, and hires an H1-B into any position within the same time period, regardless of the H1-B's job position or geographic location, then that citizen is counted as displaced. If by PPP the median wage in the US is 10X over India, then for each H1-B granted India opens up 10 visas of the same duration for Americans by lottery (or give first dibs to anyone who is replaced by an H1-B). I don't see this really helping older American workers closer to retirement, but for the subset of the HN crowd who see a streamlined visa process to live in India while building out their MVP and getting revenue traction, taking the "living day-to-day" expenses portion of their seed funding and expanding it out 5-10X could be very attractive.

jerf 11y ago

I'd also be curious if there was some possible form of recompense possible, like a class action suit. (To be clear, I'm just tossing legal terms around that I have a vague understanding of, and I know that's what I'm doing. I'm asking for those who might know more for the real info. Emphasis "know".)

SlalomStallone 11y ago
They could if they wanted to, but I don't know if I'd want to be known as the guy that sued his employer. Normally the plaintiffs see very little of the cash if they were to win, it's normally the lawyers that make out like bandits in those cases so it wouldn't be worth it. Most likely anyone at Disney that was facing layoffs and has marketable skills will leave.

exelius 11y ago

I believe the author is simply mistaken that H1-Bs are the problem. H1-Bs are limited enough that they can't be responsible for the volume of outsourcing. They also carry salary parity requirements, and while H1-B holders rarely actually make market salary, the savings still aren't enough to prompt a wave of outsourcing. There was a problem at one time with H1-Bs, but the H1-B lottery has become so competitive that it's not a reliable option for companies to base a business model around anymore. The majority of H1-B recipients these days are foreign nationals who attended American universities, often with masters degrees. Those are the kinds of foreign nationals we want participating in the US economy. The problem today are the L-1 visas, which are relatively unregulated. L-1 visas are for foreign nationals in a management capacity whose companies wish to transfer them to the US. These visas only require that the employer pay the employee's living expenses, and the employee receives the normal salary they would make in their home country (!). All of this is fine until you start to stretch the definition of "management". Which many consulting companies (Tata, Infosys, Cognizant, etc) have started to do -- they can take a person from India who is paid ~$25,000/yr (a good engineer's salary in India), fly him to the US on an L-1 visa, and charge him out to the client at $100/hr. An equivalent US-based contractor rate for the same position would be $125/hr and have margins around 10-15%. But the offshoring firms can undercut US-based contractors by 25%, eat all the travel/housing expenses, and STILL make well over 100% margins. L-1s are actually the problem. There's no salary parity requirement, there's no requirement to look for US-based candidates of equivalent positions, just a requirement that the person is "acting in a management capacity" and has worked for the company for at least 1 year. It's hard to prove that someone is not "acting in a management capacity" -- many of the companies outright lie on the visa applications. What's worse, this type of dishonesty is considered fair game when dealing with corrupt bureaucracies in India or China. But L-1s are fueling the latest wave of offshoring: they allow companies to bring people to the US at offshore prices.

ececconi 11y ago
I've seen some firms make org charts that showed that a person on an L-1 visa was "managing" someone when in fact they were an independent contributor.
- 11y ago

swashboon 11y ago

The key loophole that is use to justify hiring the H-1b is the "qualifications" the basics are that you take their resume, copy all of it, put it as a job posting in a public place and then get no applications for the job because you can use any discrepancies between the applicants resume and the "posting" to say they are not qualified. In reality you will get almost so applicants for the posting anyways.

mnglkhn2 11y ago

This article "Who Really Let the Disney Tech Workers Down: Disney or the H-1B Visa Program?"(http://discuss.ilw.com/content.php?4564-Article-Who-Really-Let-the-Disney-Tech-Workers-Down-Disney-or-the-H-1B-Visa-Program-By-Michael-Phulwani-Esq-David-H-Nachman-Esq-and-Rabindra-K-Singh-Esq)[1] http://discuss.ilw.com/content.php?4564-Article-Who-Really-L... explains the loophole used by Disney. It is very important to understand that Disney did not hire H1Bs, because it couldn't do so. It would have been blocked by the H1b Visa rules. What Disney did was to subcontract a company to take over certain parts of the IT infrastructure. Disney can easily argue that it is in its own economic interest to find and use the path that generates the most profits, while legal. The same as the argument that it is in everybody's own right to use any loophole to pay as little tax as possible. And both arguments are enshrined in what makes America great and allows for everybody to have a shot at the American Dream. Now, you can read my lines above and maybe sense a hint of sarcasm. But I find it disingenuous to blame the H1Bs as being the problem. [1] Who Really Let the Disney Tech Workers Down: Disney or the H-1B Visa Program? By Michael Phulwani, Esq., David H. Nachman, Esq. and Rabindra K. Singh, Esq. (http://discuss.ilw.com/content.php?4564-Article-Who-Really-Let-the-Disney-Tech-Workers-Down-Disney-or-the-H-1B-Visa-Program-By-Michael-Phulwani-Esq-David-H-Nachman-Esq-and-Rabindra-K-Singh-Esq http://discuss.ilw.com/content.php?4564-Article-Who-Really-L...)

deleted 11y ago

[deleted]

jandrewrogers 11y ago

What you are missing is that they must be paid the prevailing wage for the occupation, not the prevailing wage for the company. This is an important distinction. Many large and profitable companies find themselves in the position of systematically paying high wages for objectively mediocre employees, a situation that accreted over time. They may not have always been overpaid, just that over time their value and performance has become decoupled from their wages. If you've ever worked at old behemoth companies, they often have entire divisions full of employees that could be accurately described this way but the business is profitable enough overall to absorb paying large groups of people that do not produce much value. This is a management failure to the extent they allowed value and talent to become decoupled from wages over time. So how does a company correct this so that pay more accurately reflects talent and value created? Asking employees to take a pay cut to reflect their market value is not feasible, particularly if the company is profitable. In these cases, paying the "prevailing wage" to H1b employees to do the same job on a wholesale basis is actually cheaper than the status quo and much easier than suddenly requiring existing employees to have pay that reflects their market value when the entire business unit is systematically overpaying for value. Outsourcing of business units is often about clearing out deadwood divisions where few people have performed to their wage in ages. It is an unfortunate and real problem. It isn't just overseas either, I've seen this done entirely within the US many times. There is no easy way to re-couple wages and performance for a big organization when they have been allowed to drift apart for years so most companies opt for a complete reboot.