Trump signs order to stop misuse of H1B visa; Indian IT to tweak biz model

Indian IT would look at tweaking the business model with lesser dependence on the visa.

US President Donald Trump on Tuesday signed an executive order called Buy American and Hire American to protect the American industry from unfair competition and stop “misuse” of H1B visas.

With this order, signed at a tool factory at Kenosha, Wisconsin, in the Chicago-Milwaukee industrial corridor, Trump is living up to his promises to protect American jobs and enforce existing laws to support American workers.

In the “Hire American” section of the order, the US government said it would “rigorously enforce” and administer the laws that govern entry of foreign workers into the United States in order to create higher wages and employment rates for workers thereby protecting economic interest.

Trump has also suggested its administration to crackdown on visa fraud and abuse cases. “In order to advance the policy outlined …( in Hire American) section of this order, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse,” noted in the order. 

This reform, coupled with the anticipated wage hike for H1B visa holders, may have significant cost pressure on the Indian IT services providers.  

“It is clear that there is building bipartisan support for some of these changes, however, Visa reform is likely to be complicated by broader immigration reform where there is no consensus, further complicating this picture is a crowded legislative agenda with health care reform, and tax reform likely to take priority. Keeping this in mind it seems unlikely that any visas legislation will make its way through congress this year, leaving the current system in place for at least another year,” said Peter Bendor-Samuel, chief executive officer of Everest Group, the global technology researcher.
 

Indian IT firms said they would look at tweaking the business model with lesser dependence on the visa.

“Even before this latest executive order it is clear that the Indian Service provider industry was taking steps to reduce their dependency on H1B as reflected by the drop in overall applications for H1B from 236,000 last year to 199,000 this year. The majority of this reduction is thought to be the reduced number of applications that the servicer providers are submitting,” pointed out Bendor-Samuel.  

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