A new bill H-1B Visa introduced within the united states House of Representatives of Representatives proposes. Since to limit the entry of highly-skilled workers into the country to stop firms “replacing” US employees. Indian media organisations have represented the move as a giant occurrence to the IT trade. And therefore the Indian government has conveyed its issues to the U.S. administration.
What is the H-1B visa?
H-1B is a type of US visa that permits adept foreigners – largely technology employees – to work within the US. The candidates should have a minimum of a bachelor’s degree. Hence with a master’s degree needed for 20,000 of the 85,000 H-1B visas issued annually. This non-immigrant visa lets a firm employ foreigners for up to 6 years in positions that they have been unable to seek out US employees.
Indian technical school employees worry US visa limits Google recalls employees after Trump order. The H-1B visa holders can apply for permanent residency in the US and purchase property within the country. In 2016, Richard Verma, the US ambassador to India, said a calculable 70% of these visas go to Indian citizens. However, the demand for these visas is three times higher, and H-1B visas are allocated by a lottery system.
Why does the US want this new law H-1B ?
Several bills and a draft executive order are attempting changes to or curbs on – the H-1B programme. The High-Skilled Integrity and Fairness Act of 2017, introduced last week among the House of Representatives by California lawmaker Zoe Lofgren, a Democrat. Which concerns replacement the lottery system with a preference for corporations which is able to pay the best possible salaries. It suggests raising the minimum wage for an H-1B visa holder to over $130,000, quite double the current $60,000 level established in 1989.
He bill says the visa programme. “Has allowed replacement of American employees by outsourcing corporations with cheaper H-1B workers”. And aims to end the “abuse” of the programme. “My legislation refocuses the H-1B programme to its original intent – to hunt out and realize the foremost effective and brightest from around the world. And to supplement the US manpower with proficient, very paid and intensely experienced workers who facilitate produce jobs here in America, not replace them,” Rep Lofgren said on her website.
Why does this worry India’s IT industry?
The projected new legislation mainly targets corporations not based mostly within the US that bring in foreign employees on the visa quota. The doubling of the minimum wage applies to “visa dependent employers” or corporations with quite 15% people employees on H-1B visas. It excludes American corporations like IBM or Accenture, permitting them to bring in H-1B holders at the older wage. Because they would have but 15 % of us employees on H-1B visas. This effectively targets Indian outsourcing corporations. And therefore the National Association of software and Services corporations (Nasscom) has represented it as “discriminatory”.
“The new bill doesn’t treat all IT corporations with H-1B visa holders equally,” Shivendra Singh, vice-president and head of global trade development at Nasscom, told the BBC.
“If the objective is to protect American employees, then this bill can defeat that objective. Corporations that are not dependant on H-1B visas can still bring in skilled employees on lower wages which can nullify the total objective of saving US jobs.”
Amar Ambani, the head of research of India Infoline, said the bill would be bad news for the Indian economy as it. “Comes at a time once India‘s IT sector is already facing challenges to enhance their margins and profitability”.
What are the implications of the reintroduced H-1B visa bill?
- The H-1B Visa bill strictly prohibits companies primarily based in US from hiring over 50 foreign employees in the popular visa category. Or if 50% of their staffs are employed below the H-1B or L-1 visa program.
- The bill by increasing the annual pay of H-1B visa staff offers the Americans a lot of employment opportunities. This would force companies relying on false H-1B practices from using large number of H-1B and L-1 employees on coaching basis. And send them back to their country to the work that otherwise would offer Americans job chance.
- The bill out rightly prohibits US country companies from hiring H-1B and L-1 visa holders as replacement for American employees.
- This bill amends the Immigration and nationality Act to revise the definition of “exempt H-1B non immigrant” to eliminate the masters or higher degree requirement.
- The bill proposes to boost the annual salary threshold requirement from $60,000 to $100,000.
- The Bill seeks to allow the Department of Labour increased authority to review, investigate and audit employer compliance as well as to penalise fraudulent or abusive conduct.
What is President-election Donald Trump’s attitude towards H-1B Visa program?
- With just days left for Trump to exchange Obama in the White House his take on H-1B visa is incredibly important. Since observing his campaign trail it is clear that Trump isn’t in favor of the popular visa program. He had vehemently attacked the companies that misused the H-1B program.
More seriously, he’s not all ok with Indian companies as in a wild mention throughout one of his campaign speeches. Trump had said “My administration can follow a simple rule — buy American, hire American. Years earlier we used to take pride in shopping for things ‘Made in America’. We love our companies, however we don’t love them once they go out of our country. There will be consequences”. His comment came at a time when Disney World was caught red handed hiring contract Indian IT Professionals via H-1B program of HCL INC and Cognizant Technology.
- Indian IT companies send thousands of its employees to the US on H-1B visa. And therefore the new bill is believed to have an effect on them adversely. In line with the US Assistant Secretary of State for diplomat Affairs, Michele Bond who recently visited India. Since the number of H-1B visa’s issued to Indian’s remains high. And it constitutes 70% of the entire H-1B visa’s issued worldwide by Washington.
- But some reports recommend that Indian IT companies don’t have to worry a lot. Because the bill has completely did not address the root cause for the crisis. Which has shortage of Americans with STEM skills.
- According to a report printed by the US labor department in 2015, the talent gap within the US is accentuating and by the end of 2022. Hence there’s an expected shortfall of 445,000 computer professionals. There are also reports that the Indian companies who mostly employee H-1B workers for. Fortune 500 companies can get important support for lobbying for relieving of worker visa restrictions.
- But there’s a strong feeling that the profit margin of the Indian IT companies are going to be adversely affected as there’ll be a rise within the sub-contracting expense. The recent stock crash of IT companies in India recommend that the sector is under panic as it offers a large variety of outsourced back-end jobs.
Who is affected?
With the new bill targeting “visa dependant employers”. Since it is primarily Indian companies like Tata consultancy Services (TCS), Infosys and Wipro which will be affected. On Tuesday, stocks of Indian software exporters plunged – TCS’s shares fell 4.47%, Infosys’s declined 2 and Wipro’s 1.62%.
American companies employing Indians on H-1Bs are excluded from the “visa dependant employer” definition.
Other countries like China and Singapore can also be affected. However to a much lesser degree and they can have other alternatives. Singapore, for instance, has the H-1B1, almost like an H-1B. But particularly for citizens of that country under a free trade agreement between the 2 nations.
How could India respond?
If the bill does become law, options before India may include retaliatory action. Which providing major portions of India’s technology markets are dominated by American companies like Google, Dell, Hewlett-Packard, Microsoft and Apple as well as consulting and services companies like IBM and Accenture. Experts say India can probably wait and await currently. As this is often simply a bill at this stage and chances of it becoming law are low, though not zero. There could be lobbying by Indian associations or the government to pitch for a “level playing field”. So any new norms apply to any or all companies employing H-1B employees and not just Indian companies.
Any retaliatory action may impact American corporations given the size of India’s computer and smartphone market. India includes a billion mobile phones of which quite 300 million are smartphones, projected to double to over 600 million by 2019.
Also, in recent months, India has created a significant push towards internet connectivity and digital payments which might mean additional opportunities for American and global companies. India and US also have a joint target of $500bn bilateral trade. And specialists say it’s going to not be simple for the US to ignore India’s concerns.