American immigration officials are examining whether L-1 visas, under which foreign companies can transfer their employees to their branches in the United States, are being misused, a media report said.

The issue being assessed is whether companies contracting the employees they bring to US to other companies where they could replace higher paid American jobs constitutes misuse.

Should they decide that it does, thousands of workers, a major percentage from India, could be affected.

The assessment by the Bureau of Citizenship and Immigration Services comes close on the heels of a Bill moved in the House of Representatives that seeks to prevent companies from hiring foreigners with L-1 visas.

Getting L-1 visa is much easier than H-1B work permit under which the companies are expected to pay minimum wages to the employees.

In the three years since the technology bubble bust, The New York Times says the companies are increasingly using L-1 visa to bring the workers to the United States.

The number of workers under L-1 had gone up to 57,700 last year from 41,739 in 1999, the paper reports.

Even as legal experts debate the legality of contracting workers, Congressman John L Mica, a Republican, who introduced the Bill told the paper, "When you have people using this to bring in lower-cost labour to displace Americans, it's something we need to address."

The number of Americans who have been replaced by foreign contract workers is not known but US companies that use contract workers have said that the decision to hire them is based on factors like skills, and not on cost alone.

But a spokesman for BCIS Bill Strassberger was quoted by the Times as saying if this is a company offering the services of their employee to go work for another company, it sounds dubious.

"To bring someone in ostensibly as an intra-company transfer and then put him to work for somebody else and then to say that we're paying him still, that just sounds like someone's trying to really stretch the envelope on that visa category," Strassberger said.

During the boom years, the technology industries successfully lobbied Congress to expand the number of foreign software engineers who could be permitted to fill programming needs in the United States.

In 2000, Congress increased the annual cap on more restrictive temporary visas -- known as H-1B visas -- for highly skilled foreign workers to 195,000 from 115,000.

That quota will drop automatically to 65,000 on October 1 unless Congress approves an extension, a move that, the Times says, is considered unlikely.

In the last two years, the trend in the use of H-1B visas has declined sharply. Many experts say the use of L-1 visas will grow. Unlike the H-1B visa, the L-1 does not require employers to pay workers prevailing wages.

In addition, there is no cap on the number of L-1 visas.

This, the paper says, has ignited an outcry among technology workers who have lost jobs and say that foreign contract workers are paid substantially less than prevailing wages in the industry.

The Time says Satyam Computer Services, a consulting firm based in India, for example, now has a contract with the Cigna Corporation that has around 100 Satyam employees working on computer applications management in Cigna offices.

Wipro, Infosys and Tata Consultancy Services, all of them based in India, are other companies that are using L-1 visas to get workers into the United States, the Times says.

It quotes Girish Surendran, a human resources manager who oversees immigration issues at TCS, as saying his company "is committed in letter and spirit to all the requirements and regulations of all visa categories."

Surendran said he could not comment on a company's reason for laying workers off.

Wipro, the paper says, plans to lobby against Mica's Bill. If it becomes law, said Sridhar Ramasubbu, investor relations manager at Wipro, the company will simply turn back to H1-B visas.

"We will not be affected financially because our compensation is the same whether somebody comes in under an H-1 or an L-1," Ramasubbu said.

But trade groups representing American workers say the foreign workers are paid considerably less.

The paper quoted some experts as saying that the use of L-1 visas for contract workers is not widespread and that fears of losing jobs to foreign workers are exaggerated.

"Even if this brouhaha is about a real problem, I think when you look at the number of workers involved, it is a totally insignificant drop in a massive labour market," said Daryl Buffenstein, a immigration lawyer in Atlanta who has corporate clients and is general counsel for the American Immigration Lawyers Association.