Businesses, groups allege foreign worker visas memo will shut down staffing companies

By Suzanne Gamboa, AP
Tuesday, June 8, 2010

Companies, groups sue over foreign hiring rules

WASHINGTON — Three information technology companies and two trade groups want a federal judge to stop the government from enforcing rules that they say deny visas to firms that find foreign professional workers for American businesses.

The plaintiffs — Broadgate Inc., Logic Planet Inc., DVR Softek Inc., TechServ Alliance and the American Staffing Association — want to prevent the Homeland Security Department from enforcing the rules regarding H-1B visas given to foreigners working high-skilled jobs in the U.S.

The lawsuit filed Tuesday in U.S. District Court in the District of Columbia says a Jan. 8 memo issued by Citizenship and Immigration Services wrongly declares staffing companies that hire the workers for companies are not U.S. employers.

“The government by decree reversed a long-standing policy that allowed IT staffing firms access to the H-1B program,” said Mark Roberts, chief executive of TechServ Alliance, an IT industry group. The plaintiffs also say that the rules were written without comment from the public, which is required under federal laws.

Immigration officials declined comment. Citizenship and Immigration Services has previously defended the memo as clarifying existing rules, not creating new ones.

The agency has met with affected industries since the memo was issued, but has not gone through a formal process of posting the rules as a proposal, collecting comment and adjusting the proposed rules if needed, as required for new regulations.

Each year, 65,000 H-1B visas are available for companies wanting to hire foreign workers with specialized skills. Another 20,000 are reserved for foreigners with certain advanced degrees who graduate from U.S. institutions. The visas are good for up to three years and are renewable for another three.

Many companies have a rotating need for certain skills. IT staffing firms are able to deploy high-tech talent to many of those companies on a just-in-time basis, Roberts said. But H-1B visas take months to get. Staffing firms recruit and manage the H-1B workers and ensure companies have the workers when needed, Roberts said.

The memo says staffing firms — which also are used heavily to hire doctors, physical therapists, nurses and other health-care workers — are not U.S. employers because they don’t exercise control over the H-1B workers they deploy.

The plaintiffs argue that staffing companies hire, fire, pay and supervise the H-1B visa worker and share responsibility with the companies on the workers’ duties. Staffing companies are considered employers in other parts of federal law such as anti-discrimination laws, the Americans With Disabilities Act and others, the plaintiffs said in their lawsuit.

There have been instances of fraud in the staffing industry, but Roberts said existing laws can be enforced to deal with that.

“They are sort of trying to throw the baby out with the bathwater,” Roberts said. “It is an attack on the business model and an entire industry.”

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