The Sting – how Indians bend work permit laws in UK and soon the US


Bending the Rules

The USA has decided to cut its H1-b work permits issued by two-thirds. However, Indian companies are getting ready to get around this in the same way as they did in the UK.

Around about a year ago, there was great excitement in the UK. The Professional Contractors Group had managed to convince the Government‘s Skills Panel that there was no longer an IT skills shortage in the UK.

The Skills Panel agreed to take all IT skills off the Skills Shortage list and it shut down totally the Fast Track Visa system where skilled non-EU IT workers could walk straight into the UK if they had one of the skills one Skills Shortage list.

However, companies form India and other developing countries were not prepared to let this golden goose to be killed – especially as there were plenty of UK companies eager to purchase cheap IT labour.

Two Routes Left

This left only two other routes in for their skilled staff.

The first was if UK companies had advertised extensively for employees with a particular skillset and just couldn‘t find them, then they could import people with those skills.

As anyone will know, there shouldn‘t be many of those. However, this is very badly policed by the Work Permits (UK) department. They don‘t have the industry knowledge to be able to differentiate between the rarity value of the different skills.

The PCG are trying to educate them continuously, but there does seem to be a deliberate policy by the Government not to leave too many guards on the doors.

Intra-Company Transfers

The other way that Indian companies can get their people in is through Intra-Company transfers. This is where a UK company has an offshore branch and they can bring in people from that offshore branch with company specific skills.

Say for an example they had a branch in Singapore who had developed a software package that was to be used in the UK, then they could bring in Singapore employees with that company specific knowledge of that package to come in and help the UK branch implement the package.

The Sting

So how do Indian companies get people in via this route?

It‘s simple.

They just set themselves up as UK companies, as UK legal entities, and then bring in as many people as they want from their offshore company. They can even set up a separate branch in India, as a subsidiary of their new UK company, to hire and train staff for the UK market.

Of course, many of these people don‘t have company specific skills, but are C++ and Java developers who they can use at the sites of 3rd parties. They are not selling them on to third parties, because they are managed by the Indian company, who are in fact a British company if you see what I mean – except that none of the people who work for the company or who bring in income are actually British.

However, legally they are a British company.

Watch Out USA

According to what Indian companies are saying now, as the H1-b visa route is bring cut by two-thirds from 195,000 to 65,000 by Congress in the USA, many Indian companies will simply switch to the L1 visa route – which is the USA‘s equivalent of our Intra-Company Transfer type of work permit.

American IT workers shouldn‘t celebrate for too long, as they are likely to find new US software companies being set up (if they haven‘t been already) populated only by Indians and employing only Indians, who are selling cheap IT labour into the US market.

There doesn‘t seem any way to beat them, when the can simply metamorphose into a UK or US company and set up an Indian subsidiary of these UK or US companies in India employing Indians who will come to the UK and US under the intra-company transfer system.

Spirit of the Law

Although this is legal, it breaks the spirit of the Intra-Company Transfer system.

Recently, Ireland scrapped its Intra-Company Transfer system because companies were breaking the ‘˜spirit‘ of the law.

Unless the Government thinks Intra-Company Transfers were set up to allow Indian companies to re-create themselves as UK legal entities and use that as a cover for bringing in cheap Indian IT labour to the UK, then they should do the same as the Irish.

If they don‘t, one must expect that they don‘t want to, and that groups like the Friends of India, with many members in Government, have succumbed to persuasive lobbying tactics.

The US should beware. This beast has many heads, and lopping one off doesn‘t kill it.

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