Washington, Jan 31: The Donald Trump administration is preparing an executive order that will make stringent the rules for awarding H1-B visa to foreign workers. Apart from the report of an upcoming executive order, a legislation has also been introduced in the US House of Representatives which will double the minimum salary of the H-1B holders, which will make it difficult for the companies to send workers to the US.Also Read - Both Sides Planning For New State-By-State Abortion Fight
What is H-1B Visa? Also Read - Abortion Rights at Stake in Historic Supreme Court Arguments
The H-1B is a temporary visa issued by the United States to foreign workers under the Immigration and Nationality Act. It allows employers in the United States to employ foreign workers in high-skilled jobs. It is a non-immigrant visa. The minimum salary of the employee for the H-1B visa is $60,000. Also Read - Supreme Court Set to Take Up All-Or-Nothing Abortion Fight
What does the proposed law say?
California Congresswoman Zoe Lofgren introduced the High-Skilled Integrity and Fairness Act of 2017. This will make the minimum salary H-1B visa holder to be $1,30000 per annum.
“My legislation refocuses the H-1B program to its original intent – to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them,” said Lofgren.
Why will Indian IT companies be hit by this bill?
Indian IT companies send coders and engineers to the US to work for clients. The rationale behind this is to keep the cost low as Indian coders are low-paid freshers.
The IT companies follow a simple structure of recruitment. They hire low-paid coders, better-paid senior executives as project managers, and highly-skilled native workers as leaders. The first two rungs of the pyramid are sent for a temporary stay in the US as per client’s requirement. With more stringent Visa rules, the companies will have to shell out more to send Indian recruits for on-site projects.
To cover for any contingency, the Indian IT companies have already begun to hire freshmen from colleges in the Unites States.
“We are (now) looking at hiring from more colleges in the US. With the (new) visa rules, we will have to look at building a pyramid there,” UB Pravin Rao, chief operating officer at Infosys, told ET recently.
This will clearly hamper job creation in Indian IT sectors that is largely service-based and caters to foreign clients.
Experts believe the protectionist measures will cut down the profit margins of IT companies by 300 basis points. These measures may also lead to layoffs as the companies will come under pressure due to rising number of recruits on the bench.
According to ComputerWorld magazine, nearly 86 per cent of H1-B visas for computer-related jobs and 46.5 per cent for engineering positions were given to Indians.
The bill also proposes to revoke the permission given to spouses of the H-1B holders to work in the United States. The permission was given by the Obama administration.
The market showed anxiety as the Sensex fell down by 194 points. The market closed at 27,656. Nifty closed below 8,600. The shares of major I-T companies slumped by 5%. The Ministry of External Affairs has intimated the United States about India’s concerns.