New H-1B Form May Force IT Contractors to Reveal Clients

The U.S. Department of Labor (DOL) is requiring employers that apply for H-1B visas to name any companies where their H-1B workers might end up on a contract basis.

This could have significant consequences for outsourcing and staffing firms that apply for large numbers of H-1B visas, then send those workers to other firms. Outsourcing remains a source of considerable controversy, and third-party companies might prove more reluctant to outsource their IT work to staffing firms if they believe the U.S. government might publicize the relationship at some point.

The DOL’s Form ETA-9035 & 9035E (PDF) asks that employers cite whether workers “will be placed with a secondary entity at this place of employment.” If the answer is “yes,” the employer must provide the legal business name of the “secondary entity,” along with the wage rate it pays nonimmigrant workers, and the prevailing wage rate.

Those companies that contract workers out to many clients will need to fill out forms for each third-party worksite. In addition to H-1B applicants, the new form applies to those filing H-1B1 and E-3 petitions.

“This revision to the labor condition application is nothing more than an attempt to discourage contracting out for services by U.S. companies whose contractors employ H-1B professionals,” Vic Goel, managing partner of Goel & Anderson, an immigration law firm, told Forbes contributor Stuart Anderson in an interview. (And hat-tip to Anderson for digging up the Form ETA-9035 & 9035E revisions.)

This move could impact large firms such as Cognizant, Tata, and Deloitte, which may face additional pressures thanks to (rumored) tweaks to immigration policy. According to Politico, the Trump administration plans on changing how H-1B applicants enter the annual visa “pools,” with an eye toward giving more visas to highly educated workers. That could impact outsourcing and staffing companies, which apply for more visas for bachelor’s degree holders (versus tech companies such as Google, which generally want H-1B visa holders with advanced degrees).

Such tweaks to current policy, however, may attract lawsuits from affected companies. Last month, ITServe Alliance, a nonprofit group that counts more than 1,000 IT service organizations as its members, filed a lawsuit against the United States Citizenship and Immigration Service (USCIS). That lawsuit argues that USCIS approved visas for too short a period, and wants the court to limit the agency’s ability to set ultra-short validity periods.

In theory, the new forms could allow the U.S. government to more quickly determine whether a consulting firm is engaging in H-1B fraud. However, those firms might worry that revealing their clients will expose them to more bad publicity. How this might pan out is anyone’s guess.

39 Responses to “New H-1B Form May Force IT Contractors to Reveal Clients”

  1. It was interesting: watching CNN, cameras pointed at the confrontations currently on the border with Mexico in CA, and the commentor from CNN saying “Obviously, we need to issue more H1B’s to fix this problem”.

  2. There is also a requirement for the employer to make every effort to fill open positions with US residents first. They have to show months of attempts. That should also be passed on to the firm using visa holders.

    • The effort to find resident workers is a farce. They advertise the a temp
      contract like Sr. Software Engineer or Project Manager with no benefits or holidays but then only offer $35.00 to $45.00 per hour when these roles are worth $85.00 to $95.00 per hour.

      • I noticed outsourcing firms pulling this off too. They will basically contact you and severely underquote for a job. Evidently, once they collect enough NO’s, they use this in the h1b visa application process to claim that there is “not enough people with the skills”.

        Since h1b’s are apparently supposed to be for the best of the best, then surely there should be like a $100k minimum floor salary. Then add a 20% fee on top of this, to help train Americans in the very ‘skillset’ that apparently we nor any other developed country has, versus an applicant from a 3rd world economy.

        • Or they bring in a token American or two, usually interview them with several someones who are of the extraction they actually want, generally South Asian, and the interviewers are difficult to understand to the point I genuinely have come to believe they are putting it on.

          They then make you do rather complex whiteboard problems. We’re not talking sorting an array or searching in a rotated array. We’re talking build an entire LRU cache from scratch without the help of existing library data structures or a word-search that requires a Trie that you have to build from scratch, and must be able to find the letters in any cardinality. Even if you have these solutions close at hand in your working memory, if you take more than 20 minutes? Done.

          They also seem to deliberately withhold information and if they feel you are going too fast to be caught in their trap or you know the problem and are familiar with the solution, they change up the problem and then vehemently deny what they originally said was their intention. And then they count that as your hints. Get more than two hints? Done.

          I’ve had several interviewers who clearly extracted their question from the LeetCode Hard repository toss these questions my way — where I may actually know the answer or general principle, and they not only want it done perfectly in short order, but also the way they decided it should be done. Don’t do it their way exactly – likely the solution they pulled from the site? Done.

          They tell you that you can program in any language you like, so I often pick C++ or JavaScript, and the interviewer midway through will admit they don’t know or understand the language, so I need to explain it even more in-depth. Not the language of their choice? Done.

          This is complete malarkey, if they are actually a Java Developer, it should be clear what I’m doing in C++ and even JavaScript once I give a bit of clarification. This then slows you down even more, and by the time you finish solving the problem you are given or the progress shows you know what you are talking about, they say, always in a faux-lamenting voice, “We are out of time and I am sorry, and I did have another question for you, but we won’t get to it today” Unless you have the solution they want memorized in the language they want, you’re done. And even then, they will lie or ding you for something imagined.

          They then turn around, cry that there are no Americans who can do the job, and they get their friend from back one to come over. It’s all a game. Do they all do this? Absolutely not, but when I’ve run into it and my colleagues have — it is definitely not a coincidence.

          • I am an Indian by birth but settled here after my engineering degree. I came the same way as many – H1B, then green card, naturalization. I agree with you a 100 percent. In my initial days after getting ‘freedom’ (i.e a Green Card) I went for a few job changes. Everytime, I would find my Indian brethren interviewing me with such impractical questions to which they themselves did not know the correct answer or had memorized it from some book or website.

            Since I knew the game, as I had been a H1B too, I used to simply tell them – ‘Do you want me to write HashMaps, TreeMaps all day at the job or is there some real work to be done?’. I knew I would not get the job but had the satisfaction of giving a piece of my mind.

            I can understand being asked about data structures and algorithms, but just asking about Big O notation, and the same same binary tree questions is a bit much. I feel these should be a part of the interview but NOT the entire interview.

            Anyway, I have always steered clear of the ‘big 5 consulting’ firms from India. They have a very crappy outlook towards employees, have a very parochial attitude towards employees as if they are bonded labor and have stifling work conditions and culture like ‘Oh you leave at 5 PM? That’s too early!’. They expect you in office by 8:30 latest and expect that you not leave before 6:30PM. And no they are not billing the client more than 40 hours a week, but feel that you must be present on your desk for more than 8 hours a day.

            I do not wish to name company names and specific instances, but I have had 3 bad experiences with these ‘consulting’ companies from India at their US client sites. I have vowed that I will work at a 7-11 in the worst case but never for an Indian ‘consulting’ company which is head quartered in India.

    • FO dude.Do you know why America became a great country? Because of legal immigrants.If all the legal immigrants move back to Canada or India.You guys becomes homeless, drug addicts and US economy will be fucked up.Do you know how many people living miles away from families and paying genuinely paying taxe? Shameless government failed to address illegal immigration and targeting legal immigration without any reason.Think like educated person!

        • Whom you are calling third world, look at the amount spent on Mars mission at a fraction of a price of yours, with our advanced technology it’s going to last for every…yours are already in the verge of collapse, shame on you guys..stealing our brains for your welfare, if we were not would still be in old Stone Age like cowboys riding horses

          • Yeah ok. Come write back when the 300+ million people in India get access to plumbing in 2018 and don’t defecate on a public street.

            Pretty hilarious considering the overpopulated, your choice, 3rd world begs to come to Western nations every single day. You couldn’t give me 100 million Euro dollars to live there.

          • You are comparing apples to oranges and bringing in a invalid point. I am an Indian too by birth and have lived in India till my engineering degree completed. You are now talking absolute baseless points – Mars mission and American IT! Even if all the Indians and other Asians working in the Silicon Valley moved back to their home countries, nothing drastic will happen in the industry. Yes, some setbacks for a couple of quarters, but do not underestimate the local Americans who are equally qualified and working at the companies here. And the many many US university graduates from India who are much qualified and are willing to work here but not go back to join ISRO or any other Indian software ‘consulting’ company.

            In India, when the new Prime Miniser announced Make In India, everyone cheered. But now when the US President announced ‘Buy American, Hire American’ then why the stomach cramps?

          • Forget about open toilets at least we don’t have the concept of husband talking to wife…take care of your kids..they are fighting with my kids…your kids and my kids are fighting with our kids….nobody knows who is the real father..

    • Most of the Americans are only fit to work in McDonald’s, Burger King, Wendy’s etc, why compete with more advanced degree holders, I have seen first hand they know to work only in ms word, xl and power point…that to taking help from h1b guys..why don’t you guys do your work and allow us to do our work

      • How absurd to say “Americans are only fit to work in McDonald’s, Burger King, Wendy’s etc”.
        We have all seen the work produced by the run of the mill H1b visa workers from south Asia and we have seen you all in the breakrooms, too so we won’t suggest you work in any food-related industry. Simple because you were able to bribe your way into a job does not mean you have the skill, qualifications or abiltiy to synthesize thought in any meaningful way. The education process of requiring rote memorization does not produce independent creative thinkers. Copy what you can, we know you can’t support it.

  3. I am being offered 40 to 50/hr instead of 90 to 100 because of the influx of people on H1B. As a Junior 10 years ago I was on 40/hr. Corporations are getting richer by bringing cheap labor just like how they want to bring in illegals to bring in cheap labor to replace American jobs

  4. That’s a fantastic move by American Trump Government as this will cut many exploration of H1B individuals from the cunning consulting companies who works only for money and not for humanity.

    On the contrary, respective countries will be able to retain talents for their country’s growth.

    I wish Trump a massive success on this

    Thank you Trump!!!

  5. The companies will lie – no doubt. Anyone who looks at the current job openings in IT will see ridiculous skill requirements. Those companies will complain they can’t find “qualified” candidates in America then go to the CHEAP Indian labor / H1-Bs.

  6. Politicians want the election campaign fund…CEO’s and chief executives want tens of millions of dollars in bonuses from the company profit. Finally US corporations force to outsourcing the jobs to cheaper labor market over the fiber optics to INDIA or hiring cheaper H1Bs. Trump should enforce a fiber optic TAX to those companies outsource US jobs. AMAZON is the company who abuses H1B visas and not paying a penny to US workers.

  7. This new policy will make sure the allocation of LCA issued by DOL is really utilized because these consulting third party companies are using the H4 visa (H1B dependents) or the J1 visa (students) holders are saturating the job market because they were deployed or assigned instead to the project locations where the LCA is supposed to be allocated. This is another loophole that the consulting companies mostly Indian nationals are abusing for a long time. The USCIS and DOL should audit and investigate these companies who are abusing this.

  8. I have come to the US on a H1B many decades ago. I went through the entire Employment Based Green Card process patiently and have been a citizen since many years. I can say that Indian ‘consulting’ companies completely exploit H1B visa holders. Does not matter if the company is small or big, both have the same aim – quote below market rates to clients and pay a pittance to the H1B employee who is like a dog on a tight leash. H1B holders cannot change employers at will, have non-compete agreements so that they cannot even join the client easily. All these H1B companies have been squeezing their employees and continue to do so.

    The other fraud they commit is to send their India employees to the US on B1/B2 visa. This visa is for tourism/business visit purpose. They claim that their employee is travelling for ‘business meetings’ and to ‘finalize the project’. In reality, these visa holders come here for 3 to 4 months and work at the client site. They are put up in a hotel – 2 to 3 in a single hotel room and paid a paltry ‘per diem’. In many cases, when an employee is ‘on-site’ their Indian wages are not paid in full but just the Basic part of the wage. In India there is a break up of your salary like Basic pay, Travel Allowance, Dearness Allowance, etc etc.

    Almost 95% of so called ‘consulting’ companies are into cheating their own H1B employees and abusing the H1B visa system. The new tweaks in the system are a welcome change as it will actually benefit the H1B visa aspirants who will be saved from the exploitation at the hands of their employers.

    • Thank you for your frankness and honesty in this regard. I generally look very favorably of people of Indian and South Asian extraction as they are as a general rule far more generous, kind, and compassionate than many Americans. However, the H1B system creates an unhealthy competition system for tech and skilled jobs that gives everyone a bad taste for the other side.

      I don’t dislike my colleagues at all, what I dislike is the turning of the interview from a process of assessing competency and a conversation among friends to something that requires rote knowledge. There are many many great engineers out there that may not be able to write a perfect whiteboard question answer under pressure but may be brilliant coders and have the ability to optimally or near-optimally solve difficult problems given reasonable time constraints.

      In terms of interviews, I think we should be focusing less on puzzles under the gun and more about how people will fit on teams. Whiteboards are great for sanity checks, but they shouldn’t be the end all determining factor. They’ve become like the SATs, in that they are a short-term potential predictor of success. I had middling SATs (mid-1200s in the early 2000s) and still got into an elite university and after a rough first semester (did the freshman average) I adjusted and excelled, making over a 3.5 every term thereafter and the Dean’s List for 6 of the remaining 9 I attended. Determining worthiness of a job based on how people test leaves a goodly number of people out in the cold, discouraged, and encourages systemic abuses.

  9. Standing on the corner

    I don’t blame the Indian workers as much. Not their fault. They are offered jobs and they take them our of desperation. India is not a good place to make a living for many of them. But I do blame corrupt Wall Street and bought out Congress and Presidents (past and present) in collusion with Indian lobbyists funding their campaigns.

    It would be good to know which companies are hiring these guys and also specific ‘skills’ and ‘expertise’. I would like to see the statistics. Our corrupt Congress though will bury all this. And no, I do not trust a gangster President Trump to fix anything either.

    Here is my advise. Obviously don’t trust any company you work for. Also do not make careers in jobs that can be outsourced. Government jobs are pretty good if you ask me. Hard to get laid off and be replaced by Indian H1B workers.

    • I will disagree about the President comment. I have been here since President Clinton was in charge. He was the only President who helped legal immigrants like myself by making changes to the visa quota in the Green card process and allowing portability of job after clearing stage 2 of the green card process. After him, President Bush did nothing for legal immigrants and neither did President Obama. Both parties have been completely inactive on the legal immigration front. Only President Trump has gone into clearing up the mess and is attempting to curb the abuse of the H1B visa. As I have posted in several replies above, the H1B process has been abused very much by Indian ‘consulting’ companies.

      Please bear in mind that I am not affiliated to either political party but telling you which President did something and did not do anything.

  10. Hillary would have opened the flood gates on many more H1b visas AND the bigger nemesis is the L1 intra-company visa.

    My preference is to cut out the visa altogether and to shake down the US companies that keep their fellow Americans from getting these jobs. I took myself out of IT consulting because the hourly rates decayed to such a low level, I could work in other disciplines that gives more.

    Companies added another knife in the back feature; all inclusive rates. Now how the hell is an IT consultant supposed to pay for his / her own travel when they’re getting $75 per hour all inclusive?? Please!!

    No more discussion. Time to stop this pathetic program and abuse to American IT pros. That doesn’t happen to lawyers does it??

    • Oh you have not discovered ‘blended rate’. An Indian IT company will say, we will assign 10 people to this project with 3 resources on-site in the US. And for all this, you pay us $xx per hour. (or some fixed amount for project).

      So client is happy that the blended rate is lower than on-site rate (by atleast 15%) and feels good that someone will be onsite versus managing time zones to communicate with the actual team.

      Now, with this kind of situation, what the Indian IT companies do is that they send 3 people here on B1/B2 visa claiming they are here for business meetings. Then after 3 months they return and 3 new come on board. So no H1B, no L1, just plain abuse of the B1/B2 visa meant for tourism and business visits.

      And the abuse does not end just yet. In India, they will make the employee work very long hours to try and finish the project faster or make him/her work on multiple projects. They dangle the USA client on-site visit for 3 months as a chance to go abroad and make some money. The hapless employee works crazy hours and then gets the coveted ‘on-site’ posting. On-Site on a resume has good value as the next employer prefers someone who has already been to the USA and knows how to work in the US work culture. Also it means that the immigration counter will not bother the employee because the record shows that the last time the employee came for 3 months and went back and did not overstay.

      So this is the racket that goes on. Now go compete! I am glad that the current President is tackling this H1B abuse. Please keep his politics aside, at least for this issue, and try to see what he is trying to fix.

  11. We need to find a solution to this problem and I don’t think diminishing the number of H1B visas is the answer completely. Because I think we all know that those in the C-suite are going to get their bonuses and if their bonus is tied to profits than they will do what they have to. So if H1B visas get reduced then they will just build “Operations Centers” off shore and ship the jobs that way. They still get their $$$ and Americans jobs still don’t recover..I’m not smart enough to figure out a solution to this problem because as long as greed runs our country than we will never get a handle on our problem of jobs/income equality in America. There are just too few places that truly care for or respect their employees…

    • The solutions are many, but one feasible solution – its a long term – is to encourage more students to go for STEM courses instead of other courses. Students today use all the outcomes of technology like social media, instant messaging, online shopping, streaming movies, online gaming etc etc. Now they need to be encouraged to go into courses which will earn them the right qualifications to enter into tech.

      What do you think happened in India in the 90s? There were just two options for most students – medicine or engineering to make a decent living. Then came the H1B revolution which made many more students get into tech. A chance at a better pay and a better life in a developed country.

      There has to be some incentive created for the students in the USA to go into STEM. Not that there aren’t any US students, but go to any tech university like Berkeley or MIT and you will see that the number of Masters students in tech are mainly from India, China and some other nations. They outnumber the local US students. This has to change.

      As for offshoring jobs, it will happen even if there is ample workforce here in the USA. Not just the tech industry but other industries like cars, manufacturing etc have already off-shored their production. Its not just greed of the company executives, but the whole ecosystem in general. A common man invests in stocks of a US company expecting it will grow. The company has to do whatever it takes to increase profits and grow, so they offshore production and jobs. This allows them to satisfy the stock market and eventually the stock holder. Its a complete ecosystem, so cannot blame companies alone to try and find ways to increase profits.

      And ultimately the loop holes in H1B, L1, etc need to be plugged so that tech companies cannot simply off-shore work through unscrupulous ‘consulting’ companies or replace US tech workers with ‘cheap’ labor.

      • Any Americans kids have seen their parents and friends failing to find jobs and going bankrupt. Why would they go into STEM? I would not advise my kids to go into STEM.

        And I do blame the Indian and the Chinese tech workers. When they hire people for their teams, they do never hire non-Indians or non-Chinese. I find that completely shameless. The Americans were good to these people, treated them well, and in return they get thrown out of their jobs and pushed completely out of the job market.

  12. A large number of Indian contract job agencies here in the US are nothing more than money laundering operations, cleaning “black money” from India. India has a huge “black money” problem with criminals running illegal mining operations, etc. This new H1B rule should enable law enforcement to find out which agencies are actually sending people to jobs and which ones are fronts. The other type of Indian companies in the US which are laundering money are software based startups. SAAS startups are ideal for money laundering.

  13. All these going same way I guess:
    Green Card Lottery (Why there should be Lottery?)
    Immigration option directly from Abroad (140K green cards per year I guess)
    E Visa (Treaty Visa – US has same skilled personell already)
    L1 Visa (I think this is most fraud and within a year they are green card holders)
    H1B Most of clients have 99% approvals.
    F1 Visa – max from abroad has least level knowledge and some Universities has partnerships with abroad Universities and within a year they got masters
    here(Dont ask their knowledge)
    Refugees – May be slow now after Trump in action, no idea.
    J Visa – US has enough students for research.
    E5 Visa – Another quickest way to get green card. invest 500K and get a green card in a year. This is like buying a green card.
    Deport all illegals. end birthright citizenship.
    Ex: If parent on visa child should get same..implement that way.

    US is already over crowded. Where current and new generations to go to survive?
    Stop political benefits and work together for US and save Citizens.
    E-Verify must be implemented for every business and every business must be inspected without notice to combat illegal and fruad.

  14. Jeff H Silverman

    I looked at one job listing, and they had a bullet point, “must know common internet protocols: IP, TCP, HTTP, HTTPS, SOAP, REST, and HTML”. I talked to the recruiter, and asked him if he had watched Sesame Street. In India, yes, although it was called something else. So I sang him the song “One of these things is not like the other, one of these things just doesn’t belong”.

    I don’t think he got the joke.

    I didn’t get the job, although they desperately needed me.

    But seriously, the I.T. industry is a fractured mess because there are so many ways of doing things that are similar enough to where we all recognize that they do the same things but in different ways, and it isn’t clear that one way is “better” than the other. What is really required is some sort of deep learning system where we all enter our resumes into the system along with our current salaries, and the deep learning system comes up with its estimate of what the job should pay.

  15. Norah Vanstone

    What an enlightening thread. I have watched my hourly rates tank in the last 15 years. When I first moved to DC for a government contract I was offered 50/hour, the developers, mostly Americans, were making at least 80-90, I was a UX person and had I known what I know now I would not have done it the way I did it. I was subcontractor to IBM and they ran the project into the ground, milking the government the entire time. 15 years later I am being offered LESS for the same job after having expanded my experience and matured and gotten a ton of experience in project and program management. I also thought that being a US Citizen was requirement of government contracts but they seem to have figured out how to work around that. Even American companies like Accenture and Lockheed Martin and Northrup Grumman are not paying what they used to. Wages are generally stagnant for us, yet the CEOs get paid millions even when they run companies into the ground. I have had my resume hijacked by people from India who will then get jobs I should have gotten because they are willing to work for half my salary. I am completely against outsourcing and the H1B visas need to just go away unless it is a seriously critical job that needs to be filled like doctors or nurses. US Citizens have the skills, we have the knowledge and know how and we deserve to be paid what our time is worth, and not get screwed over by these greedy companies. I have yet to see trump keep any campaign promises so I am not holding my breath especially since there is proof he has hired illegals to work at Mar-a-Lago. I also think immigration needs to be severely limited, it is a fallacy that we need overseas talent in IT. I lived in Norway for a while and they always hire Norwegians first, even though the outsourcing to India is starting to happen there in IT as well but not to the same extent. And it is also getting harder and harder to find jobs with benefits instead of just straight hourly rates that go nowhere, just like in the USA. I don’t know what the answer is other than to get into a completely different line of work.