US bill on visa curbs bodes ill for IT firms

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The US is set to pass a bill on immigration with major implications for the $146-billion Indian IT sector and its employees. The bill seeks to prohibit companies from hiring H-1B employees if they employ more than 50 people in the US and more than 50% of those employees are H-1B and L-1 visa holders.

The bill, if passed, will place severe restrictions on Indian IT companies that are the largest users of H-1B visas. Though companies do not disclose the data, it is believed that the large Indian IT companies have more than 50% of their employees on H-1Bs and L-1s.

Last week, Senators Chuck Grassley and Dick Durbin introduced a bipartisan legislation that would reform the H-1B visa programme, consistent with the US Congress’s intent to ensure that qualified American workers are given the first opportunity at high-skilled job opportunities. The duo has argued that the H-1B visa was meant to fill gaps in specialized areas that cannot be filled by Americans. “There’s a sense of urgency here for Americans who are losing their jobs to lesser skilled workers who are coming in at lower wages on a visa programme that has gotten away from its original intent. Reform of the H-1B visa programme must be a priority,” Grassley said in a press statement recently.

The two have argued that outsourcing companies import large numbers of H-1B and L-1 workers for short training periods and then send these workers back to their home country to do the work of Americans.

Indian IT companies have been the largest recipients of H-1B visas and have come under intense scrutiny by lawmakers. “Undoubtedly, this is a major set-back for Indian IT companies. The Bill, if it goes on to become a law, would be a speed breaker for the thriving IT business. Even though the Bill purportedly targets saving ‘qualified American jobs’, this development should also be seen in the background of the forthcoming US Presidential elections scheduled in 2016. Senators will take up people centric issues,” said Rakesh Prabhu, partner-immigration practice in Bengaluru-based ALMT Legal.

Vikram Shroff, head of HR law practice at leading law firm Nishith Desai Associates, said while the Bill does not seek a complete ban on H-1B and L-1 visas, given that Indian technology companies are heavily dependent on this route to send their employees to the US for implementing client projects, any restriction imposed on such visa categories was likely to lead to a significant impact and could trigger a review of their client commitments and existing business model.

The Bill also gives the labour department enhanced authority to review, investigate, and audit employer compliance with programme requirements, as well as to penalize fraudulent or abusive conduct. It requires the production of extensive statistical data about the H-1B and L-1 programmes, including wage data, worker education levels, place of employment and gender. “If this Bill is enacted, US companies would be prohibited from hiring foreign workers under the H-1B and L-1 visa categories if at least 50% of their employees have already been employed on such visas. The Bill also gives wide powers to the law enforcement authorities to investigate and penalize for non-compliances,” Shroff said.

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