Will the proposed US H-1B visa reforms hurt Indian IT?
Furquan Moharkan, November 22, 2015, DHNS
Two bills tabled to reform the H-1B system have triggered angst over their potential to get trapped in US immigration policy fault lines
Of late, there has been a lot of buzz around the H-1B visa system in the US. This year saw two legislations being introduced in the US Congress which impacts it. In January, Senator Orrin Hatch tabled the ‘Immigration Innovation Act’, also known as the I-Square Act.
The proposed legislation sought to increase the H-1B visa cap by 30,000 from the current 85,000 to 1,15,000. On November 10, Senators Chuck Grassley and Dick Durbin tabled the ‘H-1B and L-1 Visa Reform Act’, which proposed to limit the H-1B visas issued.
It is the latter bill, particularly its provision to prohibit companies from hiring H-1B employees if they employ more than 50, and if more than 50 per cent of their employees are H-1B and L-1 visa holders (known as the 50-50 provision), which has alarmed the information technology (IT) industry in India. According to a recent report in The New York Times, of the 20 companies that received the most H-1B visas in 2014, 13 were global outsourcing operations, many of which were Indian IT firms. The report said the top 20 companies took about 40 per cent of the visas available — about 32,000 — with TCS leading the table with 5,650 visas.
Decided by lottery
The H1B visa is a non-immigrant visa with an annual cap of 85,000. Of this, the first 20,000 are reserved for advanced US degree holders. Inevitably, demand exceeds supply for the remaining 65,000. This year, for instance, 233,000 applications were received by US Citizenship and Immigration Services (USCIS) in a week after the application window was opened on April 1. Since the applications were more, USCIS decided on them using a lottery on April 13.
With the US going into a presidential election year in 2016, immigration is a hot-button issue. Many outsourcers worry about either the Grassley-Durbin Bill getting adopted, or its provisions getting incorporated in other tough immigration legislations.
The primary complaint against Indian IT companies is that they are flooding the H-1B system with applications to maximise their allocations, even though this is within the law. US immigration laws allow one person to file only one application, but the number of applications that a large corporation can send has no bars. The New York Times in its report pointed out that the top five outsourcing firms had prepared as many as 55,000 H-1B applications last year. TCS, the company that had prepared applications for at least 14,000 visas, won 5,650 of them, the newspaper said. Others have raised concerns about workers on H-1B visas not being paid market wages, and no transfer of skills taking place as intended by the law.
According to immigration expert Scott Fitzgerald, Partner at Fragomen Worldwide, US law provides sufficient safeguards to protect American workers. Nasscom, the industry body of Indian IT companies, denies visa abuse by Indian companies.
Ron Hira, professor of public policy at Howard University, Washington, DC., said while Indian IT companies are compliant with the program, “they have been underpaying the H-1B workers to replace the US worker”. He added, “The illegality aspect kept aside, it is clear that they do it against the intents of the program.”
Prof. Hira contends that outsourcing is leading to loss of US jobs. “It is not a myth. It is a truth. Lot of Disney workers were laid off recently because their jobs were outsourced. This is not just happening with Disney, but throughout the US economy.”
He also dismissed the claim that H-1B workers are filling the skill gap prevailing in the US. “Well, you are seeing that American workers are training the outsourcing and H-1B recruits. So there is no dearth of skill, and this justification of skill gap seems to be quite bizarre,” Prof. Hira said. But Nasscom cites “various sources and studies” to claim that the skills gap is a fact.
Fitzgerald advises Indian IT firms to make sure that they have systems in place to show to the US government that they are completely compliant with the requirements of the H-1B visa programme.
He also recommends “training and redistribution of talent to provide the US workers with some of the skills that are absent in the US marketplace”.
The proposed legislation sought to increase the H-1B visa cap by 30,000 from the current 85,000 to 1,15,000. On November 10, Senators Chuck Grassley and Dick Durbin tabled the ‘H-1B and L-1 Visa Reform Act’, which proposed to limit the H-1B visas issued.
It is the latter bill, particularly its provision to prohibit companies from hiring H-1B employees if they employ more than 50, and if more than 50 per cent of their employees are H-1B and L-1 visa holders (known as the 50-50 provision), which has alarmed the information technology (IT) industry in India. According to a recent report in The New York Times, of the 20 companies that received the most H-1B visas in 2014, 13 were global outsourcing operations, many of which were Indian IT firms. The report said the top 20 companies took about 40 per cent of the visas available — about 32,000 — with TCS leading the table with 5,650 visas.
Decided by lottery
The H1B visa is a non-immigrant visa with an annual cap of 85,000. Of this, the first 20,000 are reserved for advanced US degree holders. Inevitably, demand exceeds supply for the remaining 65,000. This year, for instance, 233,000 applications were received by US Citizenship and Immigration Services (USCIS) in a week after the application window was opened on April 1. Since the applications were more, USCIS decided on them using a lottery on April 13.
With the US going into a presidential election year in 2016, immigration is a hot-button issue. Many outsourcers worry about either the Grassley-Durbin Bill getting adopted, or its provisions getting incorporated in other tough immigration legislations.
The primary complaint against Indian IT companies is that they are flooding the H-1B system with applications to maximise their allocations, even though this is within the law. US immigration laws allow one person to file only one application, but the number of applications that a large corporation can send has no bars. The New York Times in its report pointed out that the top five outsourcing firms had prepared as many as 55,000 H-1B applications last year. TCS, the company that had prepared applications for at least 14,000 visas, won 5,650 of them, the newspaper said. Others have raised concerns about workers on H-1B visas not being paid market wages, and no transfer of skills taking place as intended by the law.
According to immigration expert Scott Fitzgerald, Partner at Fragomen Worldwide, US law provides sufficient safeguards to protect American workers. Nasscom, the industry body of Indian IT companies, denies visa abuse by Indian companies.
Ron Hira, professor of public policy at Howard University, Washington, DC., said while Indian IT companies are compliant with the program, “they have been underpaying the H-1B workers to replace the US worker”. He added, “The illegality aspect kept aside, it is clear that they do it against the intents of the program.”
Prof. Hira contends that outsourcing is leading to loss of US jobs. “It is not a myth. It is a truth. Lot of Disney workers were laid off recently because their jobs were outsourced. This is not just happening with Disney, but throughout the US economy.”
He also dismissed the claim that H-1B workers are filling the skill gap prevailing in the US. “Well, you are seeing that American workers are training the outsourcing and H-1B recruits. So there is no dearth of skill, and this justification of skill gap seems to be quite bizarre,” Prof. Hira said. But Nasscom cites “various sources and studies” to claim that the skills gap is a fact.
Fitzgerald advises Indian IT firms to make sure that they have systems in place to show to the US government that they are completely compliant with the requirements of the H-1B visa programme.
He also recommends “training and redistribution of talent to provide the US workers with some of the skills that are absent in the US marketplace”.
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