Congress Takes On Outsourcing Call Centers Overseas

In the waning days of 2011, a measure was introduced in Congress directed at U.S. companies utilizing overseas call centers that may not have attracted much attention. However, given the current economic environment, industry press and at least one foreign government have taken note of the bill.

On December 7, 2011, a bipartisan group of Representatives introduced the United States Call Center Worker and Consumer Protection Act (H.R. 3596) (the “Bill”). The Bill specifically targets U.S. companies relocating call center operations overseas by (1) requiring them to disclose such action to the Secretary of Labor nearly six months prior to the relocation, and (2) making such companies ineligible for Federal grants or loans for a period of five years. Additionally, the Bill mandates that overseas agents fielding customer inquiries for U.S. businesses (regardless of whether the call center arrangement is new or already in existence) to disclose their physical location at the beginning of a communication.

While the Bill appears to be aimed at large customer call centers that field consumer complaints or inquiries, the Bill’s language could apply to instances where internal service help desks (i.e., non-customer facing) are moved overseas. It is not clear from the Bill’s language if these operations are intended to fall within the scope of the Bill but the language as currently drafted does not entirely foreclose the possibility.
Industry groups have noted that the measure seems to have little chance of passing in its current form, but the spirit of the Bill and measures proposed raise important considerations for U.S. companies actively moving call center operations overseas. In particular, companies would have to carefully factor the proposed 120 day advance notice period into any new arrangement to avoid potentially hefty fines (up to $10,000 per day for each violation). Additionally, decisions about the volume of services transitioned may become more relevant since even a partial transition of call center services (30% or more of a center’s total volume) could trigger penalties.

U.S. companies with existing overseas operations or agreements with outsourcers may also be impacted by the requirement in the Bill that overseas operators identify their physical location at the start of any communication (defined to include not only phones calls but also email and online instant messages). The Bill requires certification of compliance with this requirement on an annual basis and leaves open the possibility of fines for non-compliance. Furthermore, upon request, businesses must have the ability to transfer a customer back to an agent physically located in the U.S. This means that businesses or their service providers would be required to maintain a parallel domestic operation capable of managing a volume of calls.

In the current economic climate, measures such as this Bill are viewed as patriotic and often appease constituents notwithstanding the commercial impact on U.S. businesses. Whether or not this Bill can withstand the legislative process remains to be seen. Nonetheless, this will be an interesting piece of legislation for the outsourcing industry to watch as it is marked up and debated in Congress during the upcoming election year.