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Trump’s H-1B Visa Bill a major setback for India’s IT companies

ViewsHeadlines Desk,

Mumbai: Finally, the worst fears of Indian IT industry are coming true. For the last several weeks, even before Donald Trump inauguration as the 45th President of United States, there were apprehensions among Indian IT companies about how things will unfold when he takes charge of the White House.

And now, merely ten days after his inauguration, a sort of crisis seems to be unfolding. He has banned entry of people from seven nations, increased vetting on whimsical grounds forcing people across the US and beyond to come out and protest against his arbitrary moves.

There are moves afoot to completely change the procedure for H-1B visa. A legislation has been introduced in the US House of Representatives calling for doubling the minimum salary of H-1B visa holders to USD 130,000, and giving preference to US nationals in offering jobs. Experts are unanimous that it will make the life of American IT and outsourcing companies very difficult, reducing their margin and forcing them to change their complete structure.


The latest legislation, the High-Skilled Integrity and Fairness Act of 2017, introduced by California Congresswoman Zoe Lofgren prioritises market based allocation of visas to those companies willing to pay 200 per cent of a wage calculated by survey, eliminates the category of lowest pay, and raises the salary level at which H-1B dependent employer are exempt from non displacement and recruitment attestation requirements to greater than USD 130,000.

The latest legislation will make things very difficult for Indian IT companies that will find it very hard to pay such high salaries. This is more than double of the current H-1B minimum wage of USD 60,000 which was established in 1989 and since then has remained unchanged.

While talking about the legislation introduced by her, Lofgren says, “My legislation refocuses the H-1B programme 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”.

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She went on to add, “It offers a market-based solution that gives priority to those companies willing to pay the most. This ensures American employers have access to the talent they need, while removing incentives for companies to undercut American wages and outsource jobs”. She further said that the legislation removes the ‘per country’ cap for employment based immigrant visas so that all workers are treated more fairly and to move to a system where employers hire the most skilled workers without regard to national origin.

Experts claim that the new legislation raises the salary level at which H-1B dependent employer are exempt from attestation requirements to a new required wage level of 35 percentile points above the median national annual wage for Computer and Mathematical Occupations published by the Department of Labour Occupational Employment Statistics (roughly USD132,000), which would be adjusted in the future without the need for new legislation, and eliminates the Master’s Degree exemption for dependent employers. The legislation sets aside 20 per cent of the annually allocated H-1B visas for small and start-up employers (50 or fewer employers) to ensure small businesses have an opportunity to compete for high-skilled workers, while still protecting against outsourcing.

The new legislation increases the scrutiny of visa issued under H-1B. Under the H-1B and L-1 Visa Reform, the Department of Labor (DOL) and the Department of Homeland Security (DHS) would have additional oversight authority to investigate fraud and abuse as well as to increase penalties for companies that violate the bill’s requirements. Things are certainly going to become much more difficult in the coming days.

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