Chasing dreams and dollars: India and the H-1B visa

HYDERABAD, India — It is a balmy early spring morning in this hilly southern India capital of some 7 million. Once a cultural and gem trading center known as the City of Pearls, it is now better known as the home of the high-technology hub dubbed “Cyberabad.”

Google, Microsoft and other tech giants have built gleaming new campuses here. Some of India’s largest outsourcing companies, which provide skilled Indian tech workers within the country and abroad, have set up shop here as well. All are tapping into India’s growing population of young IT and engineering talent, whose members flock here by the thousands seeking work.

On the outskirts of the city, an ancient temple, surrounded by a buzzing market with food and flower stalls, rises on the banks of the Osman Sagar Lake. It is barely 8 a.m., but for hours already, the temple has been surrounded by a swirling mass of petitioners. Hundreds circle it quickly but silently, praying to the Hindu deity Balaji to grant the wish that has brought them here: to obtain a guest worker visa that will allow them to take their high-tech talents to America.

The Balaji Visa Temple is among a handful of such shrines that have sprung up in recent years, offering Indian workers hope of divine help in obtaining a temporary U.S. specialty-occupation visa, familiarly known as an H-1B. Those who receive them can spend three to six years working in the U.S. — a ticket, they believe, to a better, more financially secure future.

But to get there means beating long odds. A worker must be chosen from among thousands of hopefuls by a company in need of certain skills. An application in his behalf must be made, at a cost of thousands of dollars, and approved by U.S. officials. And, for the past several years, getting that far means having perhaps a 1-in-4 chance of success in a lottery among the huge number of applications for a limited number of visas.

Those who are successful face other concerns: Navigating a system in which their employer controls their visa, and thus their legal status, leaving some feeling like indentured servants with no power over working hours or conditions. Having wages sometimes shaved through fees assessed by sponsoring companies, who may contract them out for other work.

And increasingly, being pointed to by critics of the H-1B program, including GOP presidential candidates Donald Trump and Texas Sen. Ted Cruz, as a threat to American workers.

Still, they come in waves to cities like Hyderabad and shrines like the Balaji temple, eager to vie for a once-in-a-lifetime experience. Some have seen their applications put forward year after year without success, putting off marriage or finding a permanent home in hopes that this will be the year they get to America. To jobs that will boost their careers and pay far more than they can earn here. To a few years of adventure in the land of Hollywood and Disney World.

Every year, thousands of Indian workers from Hyderabad alone get H-1Bs, while Indians overall make up more than two-thirds of those working on H-1B visas. Their growing presence has spurred calls for reform of the system on both sides: those who want the limited number of visas expanded and those who say the system has gotten out of control.

Raja Ram Mohan, 31, a computer engineer, seems unconcerned with the growing H-1B debate, his thoughts only on the possibilities before him. This morning, he took 2½ hours to circle the temple more than 100 times — an act of gratitude to the deity for his success in obtaining an H-1B. His wife, praying for a visa for herself, accompanied him.

“We’ve never been to America,” Mohan said. “I hear the Texas weather is somewhat like here? Maybe we can go there.”

Overwhelming demand for tech workers

Since 1990, the H-1B visa program has allowed U.S. companies to hire foreign workers with special skills, including physicians, engineers, accountants, even fashion models.

But, increasingly, the program has been dominated by U.S. technology companies seeking software analysts, engineers and other IT workers. In fiscal 2014, 65 percent of H-1B petition approvals were for workers in computer-related occupations.

Demand for those workers has overwhelmed the H-1B program in recent years. Applications for the visas increased by 90 percent from 2013 to 2016. This year, a record 236,000 requests were submitted within days of the April 1 opening of the application period.

The number of visas available, however, has always been limited. Since 2004, the cap has been set at 85,000 new H-1Bs annually — 65,000 for foreign workers with at least a bachelor’s degree, another 20,000 reserved for those with advanced degrees from U.S. universities. Trade agreements reserve up to 6,800 of those visas for skilled Chilean and Singaporean workers.

Exempt from the cap are skilled workers employed in higher education, nonprofit research or government research. Also not counted in the cap are extensions of an H-1B for a second three-year term.

Since 2013, the huge demand for H-1Bs has prompted a computerized lottery to dole out the visas. That has spurred growing criticism of India’s multibillion-dollar outsourcing industry, which supplies legions of workers for U.S. companies every year. In fiscal year 2014, the most recent year data are available, 67 percent of H-1B visa recipients were from India, the highest proportion in at least 18 years.

Indian companies, including Tata Consulting Services, Wipro and Infosys, submit tens of thousands of visa requests on behalf of U.S. clients each year. Critics say they are effectively gaming the lottery — depriving smaller companies of the chance to fairly compete for H-1Bs and taking visas that could go to more highly skilled, higher-paid workers for low-level, lower-paid programmers.

According to Department of Labor data, the top four Indian outsourcing companies successfully filed about 66,000 Labor Condition Applications in 2015, which is the first step toward obtaining an H-1B visa.

While many Silicon Valley companies such as Apple and Intel tend to hire more highly skilled workers and pay six-figure salaries, the bulk of H-1B jobs go to lower-level IT workers who are often paid close to the minimum allowed by the visa program, about $60,000, says Ronil Hira, a Howard University public policy professor and researcher at the Economic Policy Institute, a nonpartisan think tank focused on labor issues.

In 2015, more Labor Condition Applications were approved for jobs in Santa Clara County than any other region in the country: about 34,750. Nearly 8 percent of all applications filed were for jobs in Silicon Valley. In 2013, according to research by the Brookings Institution, more than 27,200 H-1B visas were approved for workers in two Bay Area metro areas: almost 16,000 in San Jose-Sunnyvale-Santa Clara, and more than 11,000 in San Francisco-Oakland-Fremont.

Hira, like others critical of the H-1B program, says most U.S. companies are not using the H-1B visa “as a way to alleviate a shortage of STEM-educated U.S. workers; they use it to primarily cut labor costs.”

Others argue that the proliferation of outsourcing via H-1B, especially in the case of India, is leading to the export of skills acquired in the U.S., as guest workers’ visas run out and they move back to jobs overseas.

U.S. companies also have been hit for allegedly replacing American workers with lower-paid foreigners. Disney was sued last year after some 250 IT jobs were eliminated and the work given to Indian tech workers on H-1Bs. The U.S. Justice Department investigated Southern California Edison in 2015 after the utility company laid off 500 IT workers while having some of them train H-1B workers, but said it found no violations of labor laws or discrimination against American workers.

Fraud schemes and worker abuse

Fraud and alleged abuse of workers also have been issues in the H-1B program. U.S. Immigration and Customs Enforcement agents initiated more than 200 fraud investigations into H-1B and related H and L visas, and made more than 110 criminal arrests from 2013 to 2015. Lawsuits and prosecutions also have occurred over guest workers reportedly being underpaid or forced to kick back some of their earnings to their sponsoring companies, which have control of their visas.

Daniel Showalter, a group supervisor with Homeland Security investigations in the Los Angeles area, said in an interview that the way the H-1B program has developed, with the huge staffing firms flooding the system with applications, has “taken it away from the intent of the visa itself.” Showalter, who has investigated visa fraud for much of his 20-year career, says the system as it is now opens the door to fraud schemes and worker abuse.

The most vocal critics of the H-1B program argue that the program deprives Americans of jobs and needs to be reformed. The most recent action: an increase in the cost of the visa application for major staffing companies like Tata and Infosys. A provision slipped into the 2015 omnibus federal spending bill doubled the fee to $4,000 for such companies.

Recent hearings in the Senate Judiciary Committee, whose immigration panel is chaired by Alabama Republican Jeff Sessions, have been sharply critical of the H-1B program, also focusing largely on the large Indian firms’ dominance and concerns about the replacement of U.S. workers.

Judiciary Chairman Charles Grassley, R-Iowa, and Illinois Democrat Richard Durbin, a strong immigration supporter, have teamed on a bill that would forbid the replacement of a domestic worker by an H-1B visa holder and prioritize visa allocations to foreigners holding advanced degrees.

Tech sector expects to take major hit

While Infosys and Tata refused to comment on visa-related queries for this story, it is clear the Indian IT industry has been unnerved by these changes.

Nasscom, the primary trade association of India’s IT and software services industry, estimated that the visa fee increase could cost the sector hundreds of millions of dollars annually. More than 80 percent of the industry’s $120 billion in annual revenue is from IT service exports, including H-1B workers, R. Chandrasekhar, Nasscom’s president, said.

The U.S. actions are “discriminatory to India,” he said. “At a time when both countries are targeting trade of $500 billion, and are striving to work together, it can hurt economic policy between the two countries,” he said.

Indian Prime Minister Narendra Modi raised concerns about the bill with President Obama after it was passed late last year. Then in early March, India took its complaints to the World Trade Organization. If the U.S. and India can’t negotiate a settlement of the complaint, India can ask the WTO to review the situation.

“It is a trade issue,” Chandrasekhar said. “We see the restrictions sought to be imposed that will create barriers for Indian industry. It is quite worrisome.”

Last fiscal year, more than two-thirds of H-1B visa holders came from India. Some 15 percent of those guest workers came from Hyderabad alone. So many visa applications have come from the city as the tech and outsourcing industries have expanded there that the U.S. opened a Hyderabad consulate in 2008, which has issued 130,000 H-1Bs since, said consul chief Jamie Fouss. “The volume is as much as New Delhi now,” he said.

Some take alternative route

Still, thousands of other workers seeking the visa miss out. While the large outsourcing firms grab the majority of visas, it can often take workers for an Indian company or an India-based branch of a U.S. company up to five years of service before being considered as an H-1B candidate.

For those unwilling to wait, smaller outsourcing firms offer another possible route. At these companies, experts and Indian workers say, it is common for a worker to pay at least a portion of the H-1B application fee usually paid by the sponsoring company, or to agree to relinquish a portion of the salary earned in the U.S.

More typical of would-be H-1B workers is a 30-year-old Hyderabad management consultant, a graduate of a top Indian business school who works for the Indian arm of a large U.S. consulting firm. He has lived and worked in the city for more than three years, but his apartment looks as if he just moved in: There’s little furniture, and the living room is a jumble of moving boxes. Each year since he arrived, he has gone into the H-1B lottery. Each year he has missed out.

This year, the man, who asked to speak anonymously to avoid angering his company, is trying again. “I didn’t buy even the sofa in this flat,” he said. “I just came with a suitcase.”

He quotes statistics to explain his bad luck. His first application went out in 2013, the year the number of applications started spiraling out of control. The year before, he says, everyone sponsored by his firm received an H-1B. “In 2013, there was 82 percent conversion,” he says. “Last year, it was 24 to 30 percent.” Of 65 new business school graduates to be hired by his company, he is the only one still in India.

Why is he so determined to get to the U.S.? “You learn much more when you’re directly interacting with your client,” he says. “If you don’t get to do that, in the long run you will lose out to your peers, who will be much more informed. They will understand the U.S. market much better compared to me, who’s sitting offshore and learning through reports or emails.”

Going abroad also means more money: Salaries with U.S. companies are at least three to four times what can be earned in India. The man has an education loan he is still paying off. “All my friends who went to the U.S. paid it off in the first year,” he says.

It will be at least another month before he learns whether his application made it through the lottery this year. Though he still hopes he’ll get one, so much has changed since he first tried that he feels distanced from it, he said.

“I don’t think much of the visa these days,” he said. “I was very, very hopeful the first time, and very, very disappointed the second time. Since then, I have gotten married. My life has changed. Now I think differently.”

His wife wants him to go to the Balaji temple to pray for help. “But I won’t,” he says. “Suppose this time I get the visa? Then you will unnecessarily attribute it to God. If I get it, the credit should be all mine.”

Deportation and dashed dreams

Sanjeev Reddy Varakala stands in the middle of his lemon orchard and inspects a balky irrigation pipe. The setting sun casts a sepia glow over the rural landscape as Varakala scrambles beneath a thorny tree to pick lemons.

For Varakala, a 36-year-old computer engineer with 12 years’ experience, life now was supposed to be very different. Last year, he received an H-1B. He quit his job at IBM India and planned to go to the U.S. to work, save enough money to educate his three children, maybe bring his family to America for a few years.

Instead, in December, just eight months after he arrived in America, he was deported. U.S. officials sent him home after finding that his visa documents were not in order. He says it was because the company that sponsored him had engaged in visa fraud, first withholding his pay, then subcontracting out his services and keeping a portion of his earnings.

The company, Agile Health Technologies of Naperville, Ill., had listed an “in-house project” on its H-1B application as its reason for hiring him and promised a $70,000 salary. But, he said, “When I went there, there was no job. … But I understood that only when I got there. How could I know before that?”

Sasikant Gandhamaneni, CEO of Agile Health Technologies, declined to comment for this story. Agile, established in 2013, reports having just two employees, including Gandhamaneni, but, according to visa records, has sponsored nearly 60 foreign workers.

For almost three months, Varakala said, he did menial IT work and received no pay from Agile other than about $3,500 for expenses. He considered lodging a complaint, but said his colleagues warned that the company might put him on a plane home immediately. “Maybe I should have,” he said, “I was sent back anyway.”

Instead, he said, he asked Agile to let him look for work elsewhere. He traveled to California to stay with a friend, and while there found work through another staffing company, KPIT Consulting, as a program analyst at MGM Studios. Agile, though, continued as his employer of record, and both Agile and KPIT took a percentage of his pay, he said, cutting his earnings by about 20 percent.

A spokesman for KPIT confirmed that Varakala was subcontracted to work for MGM, but offered no further comment. MGM did not respond to requests for comment.

‘Workers get the short end’

While he was aware that the arrangement was not aboveboard, Varakala said he felt he had no other option. If he objected, his visa might be revoked and he would be sent back to India. By staying, he could earn $5,000 a month at MGM and save money as he had planned.

In November, Varakala flew home to India to attend his brother’s wedding. When he returned in December, Customs and Border Patrol officers at Los Angeles International Airport questioned why he was not working at Agile in the job for which his H-1B had been granted. Varakala said he was told that Agile was “under suspicion,” but his visa was revoked and he was deported.

He doesn’t understand why he was punished but the companies that he says abused the system have not been. “The CBP knows exactly what happens,” he said. “That these small employers get workers on an H-1B and then try to look for clients. That they don’t pay correct, timely wages, abuse the system.”

A CBP spokesman said the agency could not comment specifically on Varakala’s case, but said that cases like his are commonplace. Meanwhile, details of his case have been shared with U.S. Immigration and Customs Enforcement officials, who say they will review them. They caution, though, that their investigative focus is on companies that exhibit a pattern of alleged wrongdoing rather than individual cases.

While Varakala looks for another job, he spends most of his time on his family’s 5-acre farm in a Hyderabad suburb, a place his father managed to buy after a career as a laborer and welding instructor. He feels happy there, rooted in a way he never was in the U.S.

Until his H-1B experience, Varakala’s life reflected the dream many Indians share: getting an education that can pull them out of a struggling rural life, getting a job in a big city, maybe getting to America. His friends advise him not to tell anyone about his deportation. “But what’s the point?” he said. “I made a mistake by choosing this job, but I won’t hide it.”

He and other tech workers often describe themselves as “resources” in the outsourcing system, a term that can make them sound not quite human.

“It’s like going to a market to buy something and looking for the best price. These clients get cheaper workers, the contractors get the commission, workers get the short end,” Varakala said. “At the end, I don’t think I was treated fairly.”

Fear of missing out on getting to America

Tales of such pitfalls possibly awaiting them in America don’t seem to concern those who visit the Balaji Visa Temple. For them, the Indian dream is in full flower.

Raja Ram Mohan, the young engineer who is awaiting his H-1B assignment, is thrilled about finally seeing the American tourist sites he has seen in movies. He and his wife want to visit the Hollywood sign and Disneyland, a destination on almost every guest worker’s must-see list.

“I also want to see that — what is that thing where everyone dresses up and goes out? Oh yes, Halloween. I want to see Halloween,” he said.

Bharath Kumar, a programmer from Hyderabad, also recently received his H-1B visa, after almost a year of waiting. He and his wife are ardent believers in the power of God, he said, and have made their pilgrimage to the temple.

Now, he said, he can finally compete with all the vacation photos friends who have made it to the U.S. already have posted online. “Why can’t I have that life?” he said, expressing the anxiety common among Millennials known as FOMO — fear of missing out.

“From childhood I have seen people go overseas. It is what I have thought about for a long time,” he said, sitting in a small apartment in Hyderabad full of rented furniture and a small shrine in a corner.

He said he also feels pressure in his community to get to America. “It is like you haven’t done much if you haven’t been there,” he said. “All of us know someone or is related to someone in the U.S.

“I just want to go for three years,” he said. “My parents will retire in 2019. … I want to come back when they do,” he said.

C.S. Rangarajan, the Balaji’s head priest, knows that as long as the opportunity is out there, young Indians like Mohan, hoping for an adventure, for a chance at a better life, will continue to come and pray, understanding that luck is crucial to their hopes and seeking help from the divine.

Chronicle staff writers Carolyn Lochhead and Joaquin Palomino contributed to this report.

Padmaparna Ghosh is a reporter based in India.