Press Releases | Unions and Labor Standards

News from EPI Hershey strike reveals failures of J visa program

For Immediate Release: Thursday, August 25, 2011
Contact: Phoebe Silag or Karen Conner, 202-775-8810

Hershey strike reveals failures of J visa program

Last week, hundreds of foreign workers with J-1 visas went on strike at the Hershey Company in Palmyra, Pa., to protest abusive working conditions, improper wage deductions and other violations of labor and employment law. As a result, four federal investigations are now underway to determine the legitimacy and extent of the claims. As EPI’s report Guestworker Diplomacy explains, the State Department’s J-1 Exchange Visitor Program allows for and facilitates the abuses the students have experienced. Originally designed as a cultural exchange program, the J-1 has been hijacked by “sponsors” – to whom the State Department has outsourced its oversight responsibilities – and employers, who have turned it into a program that provides cheap, exploitable labor and displaces U.S. workers. Foreign students arrive virtually indentured to their employer after accruing thousands of dollars in debt to participate in the program, while unemployed workers in the U.S. are ignored.

This is the press release for the EPI Briefing Paper originally published July 14, 2011:

J visa program fails to protect workers and operates with little oversight

The J visa Exchange Visitor Program gives U.S. employers significant financial incentives to hire foreign workers over U.S. workers, while providing them no labor protections, a new Economic Policy Institute (EPI) Briefing Paper finds.  Furthermore, the State Department, which oversees the J visa program, collects very little data on the visa holders and relies on employers and organizations sponsoring J visa holders to regulate themselves.  This outsourcing of the agency’s oversight responsibility contributes to the severe exploitation of J visa holders, the largest group of guestworkers admitted annually in the United States.  In Guestworker Diplomacy, EPI Immigration Policy Analyst Daniel Costa discusses the history of the J visa program and outlines its problematic features.

The J visa program was created to facilitate educational and cultural exchanges and, unique among guestworker programs, is managed almost entirely by the U.S. State Department.  Foreign nationals can enter the U.S. under 16 different J-1 categories, which cover a wide range of occupations and a wide range of skill levels (spouses and children of J-1 holders enter the U.S. on J-2 visas).  Participation in the program has risen dramatically since it was implemented: in fiscal year 1962, 27, 910 J visa holders entered the United States; by 2010, the number had increased to 353,602.  The largest J-1 category is the Summer Work Travel program, which in 2010 admitted 132,000 foreign college students for four-month work periods.  Almost any governmental, non-profit, or for-profit entity can sponsor J-visa holders, and sponsors can either employ J-1 visa holders directly or oversee employers that do so.

Employers have several significant financial incentives to employ J-1 visa holders rather than U.S. workers.  The J visa has no prevailing wage requirement, which enables employers to pay J visa holders wages that are lower than those earned by U.S. workers in the same region and occupation (and, conceivably, lower than guestworkers who hold H-1B, H-2A and H-2B visas, all of which have prevailing wage requirements).  Furthermore, employers are exempt from paying Social Security, Medicare, federal and state unemployment taxes on J-1 workers. And because J visa holders are required to pay for their own health insurance coverage during their stay in the U.S., employers can employ J visa holders without paying for their health care costs, another significant cost savings.  Employers are also not required to advertise their open positions or recruit unemployed U.S. workers, even in areas in the United States suffering from high unemployment.

The management, data collection, oversight, compliance monitoring and enforcement system for the J visa program is deeply flawed.  Though the State Department introduced an internet-based tracking and monitoring database a few years ago, it lacks key information that would allow the public to know which jobs are being filled by J visa holders, in which communities they are employed or how much they are paid.  Indeed, the State Department often does not know which employers are employing J visa holders.  The State Department has also outsourced its oversight functions to the program sponsors, who are expected to monitor themselves and report regulatory violations back to an understaffed compliance office, where only 13 officers oversee all J visa holders nationwide.

The toothless regulations which govern the program, combined with this lack of oversight, have led to rampant mistreatment of J visa employees by their employers.  Participants in the program often incur debt to both participate and to travel to the United States, and they are unable to easily switch between employers.  In recent years, participants have reported that their stays in the United States were characterized by low wages, filthy living conditions, and unexpected layoffs, which forced them to fend for themselves without support from sponsors, employers or the State Department.

New State Department regulations for the Summer Work Travel program go into effect tomorrow, July 15.  Though the new regulations are designed to provide additional protections to program participants, the changes are largely cosmetic and the program’s lack of oversight will most likely undercut their effectiveness.