US Senate Bill Would Limit Call Center Outsourcing
to many countries including Nicaragua
Among other provisions, the proposed law would penalize companies who transfer call centers out of the United States and create incentives for those that remain. Around 14,000 Nicaraguans currently work in these centers.
By Ivan Olivares (Confidencial)
HAVANA TIMES – A bill proposed by two US Senators could put at risk thousands of jobs that call centers currently generate in Nicaragua and the region. The “Keep Call Centers in America Act of 2025” seeks to have US companies return call center services to the US instead of relocating them to other countries, where they’ve become a widely used cost-saving strategy.
The draft of the law is part of a Republican offensive spearheaded by President Donald Trump to recover jobs that have been outsourced to countries that offer more favorable conditions for the US companies, generally meaning lower wages or fewer guarantees.
The proposed legislation was introduced on July 29, jointly sponsored by Senator Ruben Gallego (D- Az) and Jim Justice (R- W Va.). It would: ”require the Secretary of Labor to maintain a publicly available list of all employers that relocate a call center or contract call center work overseas.”
Additionally, it would “make such companies ineligible for Federal grants or guaranteed loans and require disclosure of the physical location of business agents engaging in customer service communications, and for other purposes.” Companies that decide to relocate or contract call center services to other countries would continue to appear on this list.
In order to be removed from the list, the employer would need to relocate a call center to the United States that was previously operating outside the country. An additional condition is that the “new call center in the United States employs a number of employees equal to or greater than the number of employees who worked at the original call center that was outside of the United States.” Or: “in the case of an employer who contracted call center work overseas,” the company could be removed from the list if “the employer demonstrates that the contract or agreement has been amended to require that all employees performing call center work under the contract or agreement will be located in the United States.”
Law threatens the jobs of over 14,000 Nicaraguans
In the case of Nicaragua, the call centers comprise a needed source of independent employment for bilingual workers without political ties to the regime. This population has few decent job options, and the US $550 – $650 dollars that comprise the base monthly salary in these centers represents an exceptional offering in a country where minimum monthly salaries range from US $156 to US $350.
Nicaragua’s call centers operate within the framework of the free trade zones, and are a form of outsourcing, in which companies sub-contract services in another country and at a lower cost, to carry out specific jobs, from offering customer support by telephone, to programming software, or evaluating medical insurance claims.
The industry is divided into three sectors. Business Process Outsourcing includes the companies known as call centers, where anyone who speaks English and has basic computer skills can work.. Another branch is Knowledge Process Outsourcing, which offers services involving specialized knowledge and employs professionals including engineers, architects, or even doctors. The third sector is Information Technology Outsourcing, which offers information technology or software development services.
Nicaraguan television channel 12 shared information from Pedro Ortega Mendez, General Secretary of the Sandinista Workers’ Center, who affirmed in August 2023 that the call centers generated over 14,000 jobs in Nicaragua. Experts and Central American media outlets that have highlighted news of the bill warn that the proposed legislation “threatens” these jobs.
Fines for companies that continue outsourcing
In the United States, the call centers employ some three million customer service representatives, according to the Bureau of Labor Statistics. However, in the last few years, many companies have moved these operations out of the country or have reduced their size in the US. This has had “a negative impact on local employment,” according to the sponsors of the “Call Centers Law.”
Among the incentives offered to repatriate these jobs to the US is the proposal that an employer who appears on the Labor Secretary’s list [for outsourcing their call centers] “shall be ineligible to apply for or receive any direct or indirect Federal grants or Federal guaranteed loans for 5 years after the date such employer was added to the list.”
According to the current draft bill an employer that appears on the list would be allowed to request or receive a subsidy or loan like the ones described only if they certified their intention to meet the established requirements for elimination from the list no later than 180 days from the date in which they receive the grant or loan. If they receive these funds but then fail to comply with what is required within the 180 days, they will have to return any funds received.
The draft of the law also states that an employer who is added to the list after having received any direct or indirect federal grant or a guaranteed federal loan will have to pay a monthly penalty equal to 8.3 percent of the total grant or loan payment disbursed as of the date when the first penalty was required, and continue to do so for each month that they remain on the list during the entire term of the grant. Further, that employer “shall not be entitled or eligible to receive any further disbursement of the grant or loan while on such list.”
Artificial intelligence will mean fewer call center jobs
Other forms of pressure the aforementioned law contemplates is to obligate call center employees to reveal their physical location at the beginning of the call. If they are located outside the United States, the customer can ask to be transferred to an agent within the country.
The same would apply to cases where artificial intelligence is being used for customer service. In this case, the customer can also ask to be transferred to a real person who is physically located in the United States, if possible “by voice command, such as by saying the word ‘agent.’” The bureau of Labor Statistics foresees the loss of 150,000 jobs in US call centers by 2033, due to outsourcing or automation and chatbots.
The “Keep Call Centers in America Act” has been read twice and referred to the Committee on Commerce, Science and Transportation. It would then need to be passed in the House of Representatives and the Senate, and signed into law by the president, a process that can take anywhere from a few months to a few years or even fail altogether.
First published in Spanish by Confidencial and translated and posted in English by Havana Times.