US introduces Bill to cut H-1B visas by 15,000

While it could be a reflection of rising election season fever, but IT firms in India acknowledge the need to engage with US opinion makers

Within a month, another Bill has been introduced in the US Senate to cut the number of business (H-1B) visas.

Co-sponsored by senators Bill Nelson (Democrat) and Jeff Sessions (Republican), it proposes cutting the number of such visas by 15,000, giving priority to the highest wage earners during the selection.

The H-1B visa programme was created by the US legislature in 1990, to allow specialised workers to enter for taking up jobs in segments where there is a shortage of people.

It is a non-immigrant category, meant to allow employers to temporarily employ foreign workers in speciality occupations.

At present, the US issues 85,000 H-1B visas yearly, including 20,000 for those with advanced degrees from US universities.

“By cutting the number of visas available each year and requiring those be given to the highest-wage earners first, this Bill directly targets outsourcing companies that rely on lower-wage foreign workers to replace equally-qualified US workers,” stated Nelson on his official website.

Last month, senators Chuck Grassley and Dick Durbin had introduced a similar bipartisan-sponsored Bill on the H-1B programme.

It seeks to modify the wage requirements, apart from prohibiting companies from hiring H-1Bs if they already employ more than 50 people and more than half are already H-1B or L-1 visa holders.

It also had many provisions to empower a crackdown on outsourcing companies, which they believe are making qualified Americans jobless by replacing them with ‘low-paid’ employees from offshore locations. Nelson was also one of the proposers of this Bill.

Analysts say this growing pressure is partly because that country is heading for national elections next year and would make the business environment less certain, at least in the short to medium term.

“The Indian information technology (IT) sector is likely to be impacted by this potential legislation at the more junior staff levels. Senior staff are increasingly being employed locally by the overseas subsidiaries of the major IT companies of Indian origin,” said Sanjoy Sen, doctoral researcher at Aston Business School in the UK. “Besides, with pay rises in the IT sector, the pay of senior staff is now gradually equating to their overseas counterparts. Hence, a mechanism to prioritise visa allocation by higher pay as proposed in the legislation is unlikely to work too much to their detriment.”

H-1B is the most sought visa category. Not only by offshore-centric IT service companies but also by many American majors such as Microsoft, Facebook or Google. The allotment of H-1B visas though a lottery has put these companies in a spot in terms of planning the movement of workforce in advance.

In an interaction with analysts last month, U B Pravin Rao, chief operating officer at Infosys Technologies here, had said the noise around visas happens “in the run-up to every election” but there was also a clear realization within the sector industry that “there is a lack of talent within the US market”.

“This kind of pressure is a political thing but we can't wish it away. It's something we'll have to deal with and work with the industry, as well as the Senators, to come up with a meaningful or a middle ground,” he'd added.
TIGHTENING THE NOOSE

• Currently, the US issues 85,000 H-1B visas every year including 20,000 for people with advanced degrees from US universities
   
• Last month, Senators Chuck Grassley and Dick Durbin had introduced a similar bipartisan legislation in the Senate, seeking to reform the H-1B visa programme
   
• The legislation along had sought to modify wage requirements apart from prohibiting companies from hiring H-1B employees if they employ more than 50 people and more than 50 per cent of their employees are H-1B and L-1 visa holders