Department Of Labor Officially Investigating California Utility In H-1B Visa Case

Date: June 15, 2015

Complaints Involve Firing Of US Workers, Hiring Of Indian IT Contractors


Reports surfaced earlier this month, as noted by Southern California Public Radio, that the Department of Homeland Security would work with the Department of Labor to investigate a complaint related to allegations that “Southern California Edison Company laid off technology workers and replaced them with foreign workers.” On Friday, the Wall Street Journal reported, the Department of Labor officially announced it was investigating the allegations, examining work between two Indian outsourcing firms, Tata Consultancy Services and Infosys, and US power utility Southern California Edison. SCE said it worked with the outsourcing companies on its plans to downsize its IT department to around 860 employees by mid-2015 from around 1,400 previous employees. A Tata spokeswoman said the company “maintains rigorous internal controls to ensure we are fully compliant with all regulatory requirements related to U.S. immigration laws.” Infosys issued similar comments.

What Happens Next

The Journal noted that a Labor Department spokeswoman said the department wouldn’t comment on ongoing investigations. Until the investigation is complete, the H-1B visa program will continue operating, but may face new public scrutiny. However, the Journal said experts believe it would be tough to penalize employers availing themselves of the H-1B program, as most US companies aren’t blocked from using it to hire people. Congress would likely ultimately have to intervene to alter regulations governing the visa program.

What This Means For Small Businesses

Though small business owners differ in their opinions on the use of immigrants in their labor force, and Federal immigration programs, news that the Department of Labor is investigating a business for its hiring practices is a reminder that the issue is important to small businesses in Southern California and across the US.

Additional Reading

In an editorial, the New York Times notes recent IT layoffs and the hiring of guest workers on H-1B visas at Disney and SCE. In a critical opinion piece for the Los Angeles Times, Pat Morrison also noted the layoffs. The story was also covered by the Financial Times and Reuters, Economic Times (IND). NFIB also previously noted the issue.

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