The U.S. government is investigating two Indian outsourcing firms and a California power company over whether they violated labor and immigration laws by replacing American workers with foreigners on temporary work visas.
The Labor Department said it is trying to ensure the Indian companies and Southern California Edison complied with the terms of the nation’s skilled-worker-visa system.
Controversy has grown in recent months over whether these foreign workers, who typically have visas known as H-1Bs, displace or complement U.S. workers.
A Labor Department spokeswoman said she couldn’t provide any more details of an “open investigation.”
In response to questions, the company, a unit of Edison International, said it worked with the Indian companies as part of its plan to shrink its IT department to about 860 employees by midyear from about 1,400 previously, through layoffs or voluntary severance agreements.
It noted the two Indian companies, Tata Consultancy Services Ltd. and Infosys Ltd., must comply “with all applicable laws.”
A spokeswoman for Tata said the company “maintains rigorous internal controls to ensure we are fully compliant with all regulatory requirements related to U.S. immigration laws.”
Infosys, likewise, said it has followed all U.S. rules.
Other companies including Walt Disney Co. and Fossil have been accused by former employees of replacing them with foreign workers who they had trained. A Disney spokeswoman said this didn’t occur, and said the company’s resort division had added 70 U.S.-based IT positions.
Fossil officials didn’t respond to requests for comment, but the watchmaker has said it was doing what it believed was right for the company.
It will be difficult to penalize any employer, experts say, because most companies aren’t barred from replacing Americans with H-1B workers. Ultimately, it is for Congress to change laws that govern the program.
“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, who studies the tech-labor market.
“Southern California Edison and Disney are not in that category,” he added.
Immigration researcher Daniel Costa said laws stipulate H-1B workers must be paid either a legally defined prevailing wage or the same wage as others doing similar work at the company.
The investigation comes after former Edison workers have lodged complaints with the Labor Department and after several lawmakers have criticized companies’ visa practices.
“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.) in a statement about the investigation.
“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.
An American IT specialist, who worked 16 years at Edison and earned $106,000, said an April 2014 memo from the company detailed an “IT Employee Requested Severance Program,” inviting voluntary departures.
The memo said employees who chose not to participate would be “subject to possible retention or termination.”
Among other things, it said that employees who chose not to take the package might be offered another position.
However, “if the employee chooses not to accept an offered position that is comparable to his/her current position, the employee will be terminated and will not receive severance benefits, unless the new position would quality for relocation and the employee declines to relocate,” the memo said.
The layoffs were staggered, starting in August 2014, said one employee who left in January. He trained two individuals, one remotely via computer and another in his cubicle.
Edison had no comment on the memo or on any employee training.
“It was kind of humiliating,” the IT specialist said.
“Sometimes, you are fired and walk out the door. This was someone sitting next to you for three months who you’re training to do your job.”