Early on Tuesday India time, United States President Donald Trump signed an executive order extending the ban on immigrant and non-immigrant worker visas until the end of this year.
Work visas, including the coveted H1B and H2B, as well as certain other categories of H4, J, and L visas too shall remain suspended until December 31, 2020, an official release said.
The ban on the entry of non-immigrant workers with H1B visas is likely to have the biggest impact globally, and especially on Indian information technology (IT) companies and workers.
The order also replaced the current system of awarding H1B visas by lottery with a system that privileges applicants who are paid more than others. While Indian IT firms have progressively cut down their dependence on H1B visas, their margins will be put under pressure by the changed system.
Many big global tech companies outsource their backend database updation, service, and maintenance jobs to IT companies based in India. However, skilled employees from these organisations travel to the US on client site visits, and to work on more specialised requirements. In a statement, the White House said that many American workers had been hurt by the coronavirus pandemic, and “they should not remain on the sidelines while being replaced by new foreign labour”. Barring exceptions, “we should not permit large numbers of foreign workers to enter the United States at a time when so many Americans are out of work”, the statement said.
On April 22, President Trump had signed an executive order banning the entry of workers on non-immigrant visas for a period of 60 days.
The President’s order issued on Monday in the US drew strong reactions from Sundar Pichai, CEO of Alphabet Inc. and its leading subsidiary Google LLC, Tesla CEO Elon Musk, and other global tech captains.
“Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation — we’ll continue to stand with immigrants and work to expand opportunity for all,” Pichai posted on Twitter.
Musk said H1B visaholders had skill sets that were net job creators, and criticised the proclamation.
Jessica Herrera-Flanigan, a senior official at Twitter, said in a statement that “unilaterally and unnecessarily stifling America’s attractiveness to global, high-skilled talent is short-sighted and deeply damaging to the economic strength of the United States”.
The US issues 85,000 H1B visas annually. Of these, 65,000 are issued to highly skilled foreign workers; the other 20,000 can be additionally allotted to highly skilled foreign workers who have a higher education or masters degree from an American university.
The visas are generally approved for three years, after which holders often change employers and continue working for other companies based in the US.
In 2018-19, tech giants Google, Facebook, and Apple hired more than 13,000 highly skilled IT employees with H1B work visas, either directly or from existing H1B visa holders looking to change jobs in order to stay on, US Department of Labour data show.
For period October 2020 to September 21, the US Citizenship and Immigration Services (USCIS) received about 2.5 lakh H1B applications until April 1, 2020, when the process closed, according to official data. As many as 1.84 lakh – 67 per cent – of the applications were from Indians.
However, the dependence of Indian companies on H1B visas has been reducing in recent years. In 2018-19, the top five Indian IT companies – TCS, Cognizant, Infosys, Wipro, and HCL Tech – together sent about 5,000 high-skill IT workers to the US on H1B visas, far fewer that the nearly 16,000 they sent in 2014-15, according to US government data.
Domestic IT and IT-enabled services industry body NASSCOM said on Tuesday that the order was “misguided and harmful to the US economy”.
“Thousands of US corporations, universities, medical facilities, research institutions, directly and through their associations have asked the President not to take such action because of the harm it would do now and going forward as the country reopens and recovers,” NASSCOM said in a statement.
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