Last year, Walt Disney World caused a scandal when it let go of more than 200 IT workers and hired an outsourcing firm to replace them with foreign workers on H-1B visas—a program that helps American employers hire foreign workers with specialized skills that they claim they can’t find in the United States (a claim that makes little sense when laying off people already doing those jobs). Southern California Edison, a utility company based in the Los Angeles area, made a similar move a month later, firing more than 400 IT workers. And this summer, the University of California, San Francisco, laid off 80 tech employees after signing a contract with the same outsourcing firm that Disney hired. This is not how the H-1B program was intended to be used.
The idea behind the visa program was to allow American companies to quickly hire foreign workers with needed skills, which would in turn boost the U.S. economy. And at the outset of the program, laws were put in place specifically to protect American workers from being replaced by companies that might try to hire H-1B visa workers, and pay them less.
In the wake of the firings at Disney and Southern California Edison, there was outrage. A handful of Democratic and Republican Senators urged the Department of Labor to investigate potential visa abuse. Employees filed lawsuits and complaints. Ultimately, nothing happened with these investigations because replacing American workers with H-1B workers is perfectly legal in many cases. That’s due to a loophole in the law that exempts certain companies from complying with the requirement not to displace an American worker when they petition for one of the 85,000 H-1B visas available each year.