Outsourcing, "Job Shops" and Immigration Reform


Austin T. Fragomen, Jr. and Careen Shannon

“If it ain’t broke, don’t fix it” is a phrase introduced into the American political lexicon in the 1970s by Bert Lance, the Director of the Office of Management and Budget under President Jimmy Carter. New York Times columnist William Safire later called the phrase a “caution against obsessive reform,” and it is a caution that Congress would be smart to heed as it considers comprehensive immigration reform, particularly if such reform includes the implementation of onerous restrictions on employers’ ability to hire temporary foreign workers holding H 1B or L-1B visas.

In its current form, the Senate’s immigration reform bill (S. 744) piles onto existing limitations on the placement of both H-1B and L-1B workers at third-party client sites. The bill also places new limits on the total percentage of H-1B and L-1 workers an employer can have in its U.S. workforce, increases the mandated salaries and visa fees for H-1B workers, and creates a new “H-1B-skilled-worker-dependent” definition whose sole purpose seems to be to bring more U.S. employers under the purview of the bill’s new restrictions.

These proposed changes are presumably aimed at stemming the tide of outsourcing jobs, especially information technology (IT) jobs, to countries such as India. The only problem is that the motivation behind these proposed restrictions stems from a profound misunderstanding of the prevailing software development business model that has been the main focus of such efforts. Moreover, these restrictions are meant to fix a problem that has to a large degree already fixed itself, as many U.S. companies—having learned the hard way that there are hidden costs to outsourcing—are beginning to “insource” or “reshore” their IT operations and other services to offices in the United States. Most important, the restrictive provisions won’t work, and could actually have the counterproductive effect of driving more jobs offshore. If final immigration reform legislation includes these types of restrictions, Congress may actually be breaking something that doesn’t really need fixing—and may set in motion unintended, negative long-term consequences that could hurt the American economy.

We address this topic in more detail in this Whitepaper.

Originally published on the "Fragomen on Immigration" blog. Reprinted with permission.

About The Author

Austin T. Fragomen, Jr. Over the course of his career in immigration, Austin has served as staff counsel to the U.S. House of Representatives subcommittee on immigration, citizenship and international law and as an adjunct professor of law at New York University School of Law. Austin has testified before Congress on a range of immigration issues. Most recently, he appeared before the House Ways and Means Committee's Social Security Subcommittee to discuss how to enforce immigrations laws at the worksite effectively. He also has testified before the Immigration Subcommittees of the House and Senate to share his expertise on a variety of business immigration related topics, including the H-1B and L visa programs and corporate immigration compliance.


Careen Shannon was a Pro Se Law Clerk at the United States Court of Appeals for the Second Circuit and a Staff Attorney with The Legal Aid Society in New York City before entering into the private practice of immigration law in 1992. She also served as a Legal Editor of immigration publications for Matthew Bender & Co. An attorney at Fragomen since 1998, she currently works with the firm's Professional Practices group, which monitors and reports on immigration law developments and provides guidance and input on complex legal issues.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.