Invasion of the bodyshoppers

The legislation to expand the H-1B program is designed to address some of the inadequacies in U.S. training. It offers $10,000 scholarships, renewable yearly, for low-income students in math, engineering, and computer science. Who will foot the bill? Sponsors of foreign temporary workers. Bodyshoppers like Subbiah will have to pay a $500 fee for each worker they import.

Subbiah embraces the concept. "I want all the money to go for that," he says.

Some 5 percent of his fee payments, however, will go to fund enforcement of prevailing wage cases. Under the new law, the Labor Department has the authority to initiate "spot" investigations--without a complaint on file--to see if an H-1B sponsor is violating the law. Willful violators can be fined up to $5,000 per violation, five times more than under the previous law.

Eventually, the entire H-1B phenomenon could, like the 5 1/4-inch floppy disc, become obsolete.

Right about the time that Congress began its H-1B debate, Microsoft announced with much fanfare the opening of an office in Hyderabad. The message was clear: If we can't bring them over here, we'll take our work outside the United States. Dozens of other U.S. companies, including TI and Motorola, had already beat them there.

Even Subbiah predicts the bodyshopping business will become obsolete--and quickly, if the INS doesn't loosen up its visa restrictions even further.

Subbiah is preparing for change. He's already tested a new scheme: He simply gets his hands on the specifications for a programming project that some U.S. company needs done and ships them to his Madras office. His recruiters find software engineers who can complete the task at puny Indian wages. Then--with one cheap data transmission over the Internet--Subbiah's Madras office e-mails the project back to the States.

In a matter of a year or two, Subbiah predicts that much of the software programming and coding, now performed here, will follow the path of manufacturing and move to Asia. "Only the high-level tasks, the designing and marketing, will remain here," Subbiah says. "They are going to lose the whole business to India. As a citizen of this country, I regret that I am going to start a branch in India.