DOL Refuses Senate Request on SCE Case

There was an uproar after the utility SCE laid off American workers and replaced them with imported ones working under either H-1B or L-1 visas. This was the subject of part of a Senate hearing, and 10 senators wrote an open letter to the Dept. of Labor (and other agencies), asking them to investigate the case.

My blog about the letter had what might now be considered a prophetic title, “Unclear Goal in Senators’ Letter Regarding SCE Case,” as DOL has now refused to conduct an investigation, pointing out, among other things, that SCE’s actions appear to be perfectly legal. I had said the same thing in my blog:

The letter essentially asks whether SCE, and the Indian IT services firms, TCS and Infosys, that provided the workers, dotted all their i’s and crossed all their t’s. The answer is almost certainly Yes — SCE is a huge company with lots of careful lawyers. For instance, the letter asks whether TCS and Infosys are maintaining an employer relationship with the workers sent to SCE, as required by law and regulations. They are almost certainly doing so, assuming the plan, as typical, is to use the onsite foreign workers to serve as liaisons to offshore workers.

Did the senators who authored the letter expect DOL to respond this way, washing its hands of the whole SCE mess? Maybe; there is no naivete in DC, and maybe the intent was to show DOL, and by extension the Obama people, just doesn’t care about H-1B abuses (and that the good senators do care).

Yet I am surprised that DOL simply ignored the request at the end of the Senate letter, which asked DOL and the other agencies to identify any “obstacles in existing law” to preventing abuse such as that in the SCE case. DOL’s lack of a reply on this point is in sharp contrast to DOL’s 1998 House testimony, in which it agreed that there were lots of abuses but the DOL’s hands were tied by the language of the law. In other words, whereas in 1998 the DOL was sympathetic to critics of H-1B, today there is no such feeling. The “obstacle” is now partly DOL itself.

But even those 10 senators, well-intentioned as they may be, are not helping matters either, in their failure to notice the central issue in the SCE case.  As I wrote in my earlier posting, “what really enabled the hiring of H-1Bs to work at SCE was the four-tier system of determining prevailing wage, which makes young foreign workers cheap.” The Senate and the DOL letter have focused on the special H-1B-dependent category in H-1B law, which covers the firms that provided the foreign workers to SCE. Yet the real point is, regardless of whether the rules in that special category are flawed, the foreign workers in the SCE case were still subject to the GENERAL wage requirements for H-1B, and use of young foreign workers for cheap labor is legal under those requirements as well.  In other words: What most needs fixing is GENERAL H-1B wage law.

That law, as I’ve said, makes it legal to hire young foreign workers in lieu of older Americans, as young workers are cheaper. So any legal reform to H-1B that concentrates on the H-1B-dependent class, which I’ve been warning for quite a while is what Congress is headed for, will completely miss the boat.

This includes the proposals to give an unlimited number of visas (temporary and permanent) to newly-graduated foreign students earning STEM graduate degrees at U.S. universities. Even if Congress were to severely clamp down on the H-1B-dependent employers, SCE would have plenty of young foreign workers to hire from.


7 thoughts on “DOL Refuses Senate Request on SCE Case

  1. It seems that the people in DC – with a few exceptions – care little about haw their actions or lack thereof affect the citizens and current legal residents of the US. They are willing to listen to the corporate line even when presented with documentation created by federal agencies contradicting the corporate assertions and confirming those of the workers. There does not seem to be anything we little people can do. I fell like the whimpy kid at school being bullied and having my life controlled by the “in crowd” again; no matter that the outsiders are right, the principal supports the teachers’ pets and permits the bullying to continue.

    The guest workers should be careful what they wish for and receive from the powers that be. If they become legal residents/citizens, at some point they too will be subject to the mindset and whims of employers who could care less about people and will displace the old for the new. Perhaps they just plan to return to their home country where their savings – and use of US social programs like SSDI (openly discussed on social media) – will allow them to live a comfortable life.


    I recall that at one time employers had to demonstrate that there were no US workers available for a position before hiring an H-1B. Could you please point to a reference regarding that change. I also thought that the exemption technically only applied to IT or STEM workers but now seems to be universally the standard that all job classifications are treated as not requiring a search for US workers. Would it not be possible – and easier – to have this regulation rescinded? With the current DOL leadership, this may not be an option at this time.

    Do individuals in fields other than STEM who are having even more difficulties getting jobs not understand how OPT and H-1B affect them? Why is there not more of an outrage especially from the MBAs? What can be done to educate other occupations about the issue and enlist them in advocating for US workers in this fight?


    • The “little people” have tons of power — but only if they use it, which they are not doing.I’ve said this repeatedly: If just 10,000 programmers and engineers were to become activist, they could stop H-1B dead in its tracks. But they are too reticent and too uninformed and too gullible and too fearful of employer retribution to speak out. That last “too” is quite understandable, of course, but the fact remains that in the end they will lose, with there being enactment of legislation that will make the current situaton, bad as it is, look trivial in comparison.

      So far, they’ve been lucky, in that the Democrats’ push to legalize the unauthorized immigrants, and the Republicans’ fervent opposition to same, has created a standoff. One way or other, that standoff will be resolved, possibly in the next few weeks, and it will be resolved by EXPANDING the H-1B program and ADDING A NEW VISA PROGRAM FOR FOREIGN STUDENTS. And that all will be “justified” by making some new restrictions in the Indian bodyshops.

      H-1B has never had a requirement that Americans be given hiring priority (other than the H-1B-dependent category). You may be thinking of the old H-1 program that preceded H-1B.


      • This line is 100% true – “But they are too reticent and too uninformed and too gullible and too fearful of employer retribution to speak out.”

        I am fearful of getting blackballed for speaking out. I was discussing my concerns with the use of H1-Bs in my former workplace with a couple of colleagues. Someone overheard my conversation and reported me to HR. The HR person tried to frame my conversation as an EEOC violation of National Origin Discrimination.


    • The majority of H1-B workers I worked with were from India. I would say 90% of them are going back to their country. They come over here when they are relatively young and no family. I’m talking like mid to late 20s.

      They are here for a year or two and then get married. They bring the wife over and enjoy the USA for a year or two. Then they have a child. They live in the USA until the child gets close to school age. Once that happens they go home for good to raise the child in India. By then they have made plenty of money in the USA to last them a long time in India. I know guys that build their first home and pay it off.

      Going back to India is no problem because they will continue working on all the projects that are off-shored there. Win/Win for them. American tech workers get cut out of the loop.


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