There is some cheer for the Indian IT services industry, for now, as there will be no changes in the H-1B visa issuance process for the fiscal 2018, which begins on April 3.
An Oregon District court last week, dismissed a lawsuit — filed by two firms from Portland Tenrec Inc, a web development company and Walker Macy, a landscape architecture firm — that challenged the lottery system adopted to determine successful applicants for H-1B visas. The lawsuit sought to process the H-1B visa applications in the order they are received, and end the lottery system.
Judge Michael Simon wrote in his ruling: “For example, the Fedex driver may have had a flat tire or took a long lunch, resulting in the UPS truck delivering its petitions before Fedex. The US Mail delivery may always be delivered in the afternoon for a particular location on the mail route, making its delivery last. Is it fair to process the UPS petitions first, simply because they ‘arrived’ at the USCIS (US Citizenship and Immigration Service) office first?”
Bill against abuse of H-1B visas reintroduced
‘The Keeping American Jobs Act’, that seeks to prevent US companies from outsourcing jobs overseas by “abusing” the H-1B program was re-introduced in House of Representatives, last week. The Bill is sponsored by Democrat Congressman Derek Kilmer and Republican Doug Collins, and if passed, would prevent companies that have H-1B employees from using them to train workers in the country and then move those jobs to a foreign country.
Prior to that a legislation called the ‘High-Skilled Integrity and Fairness Act of 2017‘ was introduced in the House of Representatives by California Congressman Zoe Lofgren, in January this year. The Bill calls for doubling the minimum salary of H-1B visa holders to $130,000, which is more than double the current amount of $60,000, established in 1989. This will pose as a challenge for tech firms to induct workers from abroad.
It will also cancel the lowest-pay categories and raise the salary at which H-1B employer is exempt from non-displacement and recruitment attestation requirements. With regard to startups, the Bill would set aside 20% of the allocated H-1B visas each year for startups and firms that have 50 or less than 50 employees. It would also establish wage requirements for L-1 workers and improve H-1B wage requirements to encourage companies to hire qualified American workers and prevent them from using foreign workers as a source of cheap labor.
Around 85,000 H-1B visas are allotted a year, of which nearly two-thirds of H-1B visa applicants are Indian nationals who either work for Indian firms — like Tata Consultancy Services (TCS), Wipro and Infosys — in the US, or the local operations of US firms such as Accenture, IBM and Google. The reforms Bill, introduced earlier this year proposes for doubling the minimum salary of H-1B visa holders to $130,000, which is more than double the current amount of $60,000, established in 1989.
Passing the H-1B visa reforms will not be easy
The chain of events has set caution amongst Indian IT services companies who willingly have decided not to apply for H-1B visas for junior employees, this year. Infosys, which according to MyVisaJobs.com, is the largest sponsor of H-1B visas in the US and had in FY2016 filed 25,405 Labor Condition Applications (LCA) for H-1B Visas, will not be applying for visas for employees with under four years of experience, this year. The company is instead talking to clients about offshoring more work to India, and the work done be by its junior employees in India.
However, experts say that it will be difficult for President Donald Trump’s administration to actually pass the proposed reforms. Kirit Udeshi, VP, Business Development at Forte Consultants, an IT consulting agency in Reston, Virginia, feels that the failure of the American Health Care Act last week is set to impact the overall legislative priorities of the new administration, including President Trump’s promise to reform the H-1B visa program.
Udeshi, writing for The American Bazaar, says, “Now, in the aftermath of his failure, right out of the gate, to get his signature healthcare legislation passed, the president’s options on H-1B reform are limited.”
Trump though has an option to issue an executive order, which though is a temporary measure and not a substitute for legislation; and executive orders can be challenged in the court of law. After taking over the reigns from Barack Obama, Trump has issued some two-dozen executive orders, but not the one he promised on H-1B. “Especially, after federal courts blocked the so-called Muslim ban, the administration is more cautious about the legality of executive orders,” argues Udeshi in the article.
Sheela Murthy, a prominent immigration attorney in the US and founder of Murthy Law Firm, also raises similar concerns in her talk with The American Bazaar, and urges companies to not panic. “I would tell people not to panic, not waste your cosmic and spiritual energy in focusing on something that we don’t know if anything will ever come to pass,” she says.
Indian industry body confident
Indian IT industry, along with the Indian government have raised the issue with the US government at multiple levels. Indian IT industry body NASSCOM, is not too much concerned with the proposed reforms. “There is no concern. As much as we need them, they (the US) need us, Kamal Agarwala, Chairman, Nasscom’s Eastern Regional Council, said.
“That is what the NASSCOM stand is all about. They do not have the manpower to replace us. There may be some challenges because of the changes in the industry’s dynamics, but we do not see anything to be alarmed about.”
The H-1B visa reforms will not only hurt Indian IT companies, but will hurt the US equally if not more. US does not depend on skilled foreign workers for the IT services industry only, but for healthcare too. US universities too depend on foreigners to fill their faculty ranks, especially in the science, technology, engineering, and mathematics (STEM) fields.
There are high chances that if pushed to the wall, US companies could relocate their production and employment overseas.