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Donald Trump and Indian IT fears over H-1B

Leaked memos suggest that the Trump administration may now clamp down on work visa programmes, sparking fears that the move could adversely affect the Indian technology sector.

Written by Johnson T A |
Updated: February 6, 2017 12:21:03 am
donald trump, trump It laws, trump memos, H-1B visa, H-1B visa laws, H-1B visa changes, protecting american jobs, american jobs, visa programmes, hyderabad techie, no jobs, donald trump, new salary, indian express news, TITA, business news As of March 31, 2016, Infosys had 14,659 workers with H-1B visas in the US

Leaked contents of an executive order, likely to be issued by the Trump administration to revamp work visa programmes, has triggered concern that it may strike at the heart of the $147 billion Indian information technology (IT) industry.

Though the proposal, Protecting American Jobs and Workers by Strengthening the Integrity of Foreign Worker Visa Programs, doesn’t mention its effect on H-1B visas — the main work visa used by Indian companies to send hundreds of IT workers for high-skilled technology work in the US — it is in line with the Trump administration’s intent to prevent foreign workers from taking up US jobs. The leaks also come close on the heels of orders barring citizens of seven Muslim-majority countries from entering the United States.

What are the concerns in the Indian IT sector over the proposed US visa laws?

The pressing issue is that it could restrict the number of Indian IT workers who can be deployed under the H-1B and L-1 visa categories in the US. Indian firms, which earn 60 per cent of their IT services revenues in the US, are heavily reliant on American visa policies to deliver cost-competitive IT solutions. Indian IT companies are also consistently among the top 10 firms seeking H-1B visas although the numbers have been reducing in recent years due to fears over visa laws and gradual automation of jobs. Of the nearly 12 lakh high-skilled jobs certified for H-1B visas in 2015, Indian IT firms (Cognizant, TCS, Wipro, iGate, Infosys and Mindtree) accounted for as many as 2.54 lakh positions. In 2016, that number was 1.72 lakh, as per US labour department records. Drastic changes in the H-1B and L-1 visa policies are expected to dent revenues of Indian firms by as much as 10 per cent.

What are the visa categories under which Indian IT workers are employed in the US?

The primary visa under which Indian IT workers are employed is the H-1B. The H-1B programme allows employers to temporarily bring foreign workers to the US on a non-immigrant basis in occupations classified as high skill for a period of three years, which can be extended by a further three years. For a job to be classified as highly skilled, it requires “theoretical and practical application of specialised knowledge and a bachelor’s degree or its equivalent in the specific speciality (sciences, medicine, healthcare, education, biotechnology, etc). Indian firms also use the L-1 visa to send workers to the US. The L-1 non-immigrant visas allow a US employer to transfer an executive or manager or a “professional employee with specialised knowledge relating to the organisation’s interests” from one of its foreign offices to an US office.

How are the work visas allotted?

Under existing US laws, 85,000 H-1B visas are issued each year (65,000 H-1B visas and an additional 20,000 for graduate student workers with advanced degree exemption). US authorities receive nearly 3 lakh applications every year for the H-1B visas and issue them through a computer lottery system. According to estimates, around 70 per cent of H-1B visas are granted to Indian IT firms every year. At present, there is an estimated three lakh H-1B visas with Indian IT industry employers. According to Infosys, as of March 31, 2016, it had 14,659 workers with H-1B visas in the US and 1,364 workers with L-1 visas. Indian companies spend between $ 30 million to $ 50 million in visa costs alone.

What are the other visa concerns ?

There are other proposed policies in the US that aim to curb visas granted for job training and at barring work permits for spouses of H-1B visa holders.

Congresswoman Zoe Lofgren, a Democrat, introduced a draft law, in the US House of Representatives last week, which proposes market-based allocation of H-1B visas. The bill also calls for the minimum wage to be assigned at $ 1,30,000 for H-1B visa foreign workers (instead of the $ 60,000 in existence since 1998) and is among four that have been moved in recent times by US politicians seeking to prevent high-skilled jobs from going to low-cost foreign workers — particularly from India. In 2015, Senators Richard Durbin and Charles H Grassley introduced a bill seeking to deny H-1B visas to firms with over 50 employees and which have more than 50 per cent of them on work visas. In 2016, Congressmen Bill Pascrell and Dana Rohrabacher, also sought to prohibit H-1B visas to such companies that had over 50 per cent of their employees on H-1B and L-1 visas. In January this year, Darell Issa and Scott Peters, two Republicans from California, introduced a bill called the ‘Protect and Grow American Jobs Act’ to raise wages for high-skilled jobs to $1,00,000 per year from $ 60,000 and to make Masters degrees mandatory to qualify for work under H-1B visas.

Why is the US adopting such protectionist measures?

There has been growing concern across the political spectrum in the US that a large number of high-skilled jobs are being hived off to foreign workers by US companies at the cost of skilled local workers. There have also been adverse reports of Indian IT firms, Cognizant and HCL, taking over tech jobs at Walt Disney after the US company laid off US workers. In 2013, Infosys paid a $34 million fine to settle a US labour dispute, in which, it was accused of using B1 business/visitor visas to bring in workers to do work designated for the H-1B visa category.
Analysts in India, however, argues that Indian IT workers make up for a shortage of high-skilled workers in the US . According to Nasscom chief R Chandrashekhar, it is the underlying shortage of STEM (Science, Technology, Engineering, and Mathematics) workers in the US that has “led to all companies bridging the skills gap by bringing skilled workers on work visas including H-1B”.

What is the way ahead for Indian IT companies?

Indian firms have been bracing for changes in US work visa policies for a while now. But among the things they are expected to do is to progressively seek fewer H-1B visas and employ more local talent. Companies are also automating jobs and seeking innovative technology to remain competitive. “There will be some impact on H-1B depending on the nature of the policy that is enacted. It is not something that we are overly concerned about,” Infosys CEO Vishal Sikka said in January. “Ultimately regardless of the visa policy, the right thing to do for innovation is to have a lot of local talent,” he said.

Key non-immigrant US visas

H: Temporary Worker and Trainee Visa

H-1B:
The H-1B visa allows employers to employ foreign workers in the US in speciality occupations or as distinguished fashion models (H1B3 visa).

The H-1B visa has an annual cap of 65,000 visas. The first 20,000 petitions filed on behalf of beneficiaries with a US master’s degree or higher are exempt from the cap. In effect every fiscal, 85,000 H-1B visas are issued under a lottery system. Spouses and unmarried children under the age of 21 can travel to the US with a H-1B visa holder under the H-4 non-immigrant visa. Since May 26, 2015, certain H-4 visa holding spouses of H-1B visa holders can seek employment in the US if the H-1B visa holder has started the process of seeking employment-based permanent resident status.

H-1B1
The H-1B1 visa allows US employers to temporarily employ foreign workers from Chile and Singapore in specialty occupations. Current laws, however, limit the annual number of qualifying workers to 6,800 — 1,400 for Chile and 5,400 for Singapore.

H-1B2
The visa is granted to graduates and higher degree holders going to work on US department of defence projects. The cooperative research and development project must be part of initiatives under government-to-government agreements administered by the US Department of Defence.

E-3
The E-3 visa allows US employers to temporarily employ foreign workers from Australia in speciality occupations. Current laws limit the annual number of qualifying foreign workers to 10,500 Australian nationals.

L – Intracompany Transferee

L-1A
The L-1A visa allows US companies to transfer an executive or manager from one of its affiliated foreign offices to its offices in the United States. This visa also allows a foreign company which does not have a US office to send an executive or manager to the US for establishing one. The transferring employee can be accompanied or followed by spouses and unmarried children under the age 21. Family members are granted L-2 visas and can stay for the same time as the employee. The maximum period of stay permitted in the US under the L-1A is seven years.

L1-B
The L-1B visa allows US employers to transfer a professional employee with specialised knowledge relating to the organization from an affiliated foreign office to one a office in the US. The maximum period of stay allowed under this visa is five years.

B1/B2
The most common visa is the multiple-purpose B-1/B-2 visa, also known as the “visa for temporary visitors for business or pleasure.” Visa applicants sometimes receive either a B-1 (temporary visitor for business) or a B-2 (temporary visitor for pleasure) visa if the reason for travel is specific enough and if the consulate feels the person does not qualify for the combined B-1/B-2 status.

E – Treaty Trader or Investor

The E-1 treaty trader and E-2 treaty investor visas are issued to citizens of countries that have signed treaties of commerce and trade with the US.

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