Responding to the wave of cost-cutting American companies and state and local governments choosing to outsource call center services and thus, jobs, to companies in foreign countries, federal and state lawmakers have proposed legislation to stem the tide.
Telemarketers are once more drawing attention on the front pages of the nation’s newspapers - although the topic now is “outsourcing.” The stakes have been raised as each presidential candidate has weighed in on the topic.
In a recent speech given by John Kerry, he stated that “if a company is torn between creating jobs here or overseas, we now have a tax code that tells you to go overseas. That’s crazy. And if I am President, it will end.”
Alternatively, President Bush in his 2004 Economic Report takes the stance that “when a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically.”
Such competing views make it clear that offshore outsourcing will be one of the hot button issues in this coming election. No U.S. politician seeking votes wants to see empty facilities on domestic soil because American jobs have been shipped overseas.
Responding to the wave of cost-cutting American companies and state and local governments choosing to outsource call center services and thus, jobs, to companies in foreign countries, federal and state lawmakers have proposed legislation to stem the tide.
Congress is currently debating several pieces of legislation regarding offshore outsourcing. The federal bills do not specifically address the use of offshore call centers. Instead they attempt to restrict the use of federal funds in relation to foreign employment.
These bills prohibit the performance of federal contracts outside the United States, restrict federal funding based on the use of foreign employees, and create tax disincentives for using foreign employees. The purpose of this legislation focuses on discouraging the use of foreign workforces.
For example, the USA Jobs Protection Act prohibits executive agencies from entering into contracts that will be performed at a location outside the United States and prohibits the disbursement of funds appropriated for financial assistance for a State when the funds will be spent on contracts that will be performed outside the United States.
Not all Congressmen support these measures. Republican Senator Orrin Hatch from Utah recently stated “sometimes I think we don’t think it through when we do these broad, over-sweeping things like preventing government outsourcing. I think we should be wary of retaliation against U.S. companies who get awarded foreign government contracts.”
While none of the bills have become law, businesses relying on federal funds should track their progress.
State legislation tends to get right to the point, and is directed more specifically at the practices of businesses outsourcing their call center sources overseas.
The proposed state restrictions generally fit into four categories: “right to know” requirements, rerouting requirements, prohibitions against sending certain personal information to a foreign country, and prohibitions against state government contracts with vendors who use offshore call centers.
State legislators appear most concerned with consumers’ “right to know” the location of the person with whom they are speaking when placing or receiving a telephone call to a business.
Bills which require a telemarketer to disclose his or her physical location are clearly the most prevalent type of law among current offshore call center legislation. While some states require that these disclosures be made at the beginning of the telephone call, a majority of the legislation requires that they be made only upon the customer’s request.
As many of you know, other state and federal laws likely require a truthful, non-deceptive response to a consumer inquiry, so requiring a location disclosure upon request is likely redundant.
Common requirements mandate the disclosure of: (1) the identification of the city, state, and country where the customer services employee is located; (2) the name or registered alias of the customer services employee; (3) the name of the employer of the customer services employee; (4) and the name of the employer.
Many existing laws require disclosure of the “true” name of agents during outbound calls. This requirement has been difficult to meet for some international businesses whose employees do not always have names which are easy to use in the United States.
The states which have included disclosure requirements in their offshore legislation include Arizona, Arkansas, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Kansas, Minnesota, Mississippi, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Vermont, Washington, and West Virginia.
The second restriction the legislation attempts to impose is that, upon a customer’s request, a telephone call to a call center in a foreign country must be rerouted to a call center located in the United States. Only Illinois, Missouri, and Washington have included the rerouting requirement in their legislation.
Another common provision is the right to speak to a qualified employee of the company or government agency that the consumer is doing business with. However, the legislation fails to define “qualified employee.” Arizona, Missouri, Tennessee, Vermont, West Virginia, include this type of requirement in their bills.
Another target of the legislation is the sending of certain person financial information to a foreign country. Several states have proposed to prohibit sending consumer financial, credit, or identifying information to any foreign country without the customer’s express written permission. This information includes social security numbers, drivers license numbers, checking account numbers, savings account numbers, credit card numbers, debit card numbers, personal identification codes, electronic identification numbers, digital signatures, any information that can be used to access a person’s financial resources, biometric data, and fingerprints.
The states which have proposed restrictions on the sending of certain information to a foreign country include Arizona, California, Connecticut, Hawaii, Kansas, Minnesota, Missouri, North Carolina, Tennessee, and West Virginia.
The final significant area which state legislation focuses on is government contracts with vendors who employ offshore employees. These provisions propose to prohibit state entities from contracting for call center services with any vendor that provides services not performed by individuals in the United States. This type of legislation requires vendors bidding on government contracts to provide certification that only employees working in the United States would perform the contracted for services.
One cannot help but be reminded of the bills preventing prison call centers, which many states considered several years ago. It is likely that this trend in state legislation will be similarly limited in scope and longevity.
The following states have proposed prohibitions against contracting with vendors employing offshore employees: California, Connecticut, Hawaii, Kansas, Minnesota, North Carolina, South Carolina, Vermont, and West Virginia.
It is unlikely that most of these bills will become law. However, any business would be risking a great deal, if it ignored any instance when 20+ states consider similar legislation.