U.S. government is investigating two Indian outsourcing firms and a California power company regarding whether they have  violated U S labor and immigration laws by replacing American workers with foreigners on temporary work visas. The Labor Department said that it is trying to ensure that the Indian companies and Southern California Edison have complied with the terms of the nation’s skilled-worker-visa system. The controversy has come out in the recent months after, whether the foreign workers, who are typically having H-1B visas, displace or complement U.S. workers.

A spokeswoman for Tata said, “the company maintains rigorous internal controls to ensure that we are fully compliant with all regulatory requirements related to U.S. immigration laws.”

Walt Disney Co. and Fossil are also being accused by their former employees of replacing them with foreign workers who they have trained. A Disney spokeswoman said this didn’t happen and said the company’s resort division had added 70 U.S. based IT positions. Fossil officials did not respond to requests for comment and the watchmaker said it is doing what it believed is right for the company.

“Only very heavy users of H-1Bs face any restrictions” on displacing workers, said Norman Matloff, a computer-science professor at the University of California, Davis. “Southern California Edison and Disney are not in that category,” he added.
“We’re pleased to hear that the Labor Department is taking a first step to stanch this tide of visa abuse,” said Sens.

Richard Durbin (D., Ill.) and Jeff Sessions (R., Ala.). “A number of U.S. employers, including some large, well-known, publicly traded corporations, have laid off thousands of American workers and replaced them with H-1B visa holders. To add insult to injury, many of the replaced American employees report that they have been forced to train the foreign workers who are taking their jobs,” the statement said.

Nasscom said an investigation will lead to long-term ramifications regarding future contracts between US corporations and Indian IT firms and that it should intensify the efforts to resolve the issue. "Undoubtedly (these probes) would have a damaging impact on future business. It is a serious concern," Nasscom president R Chandrashekhar said. "This has the potential of seriously destabilising the way the sector does business and frankly, we are also dismayed by the way a hostile business environment is being created," Chandrashekhar added.

By Premji