Trump's HR 170 Bill, higher visa fees may land Indian IT cos in trouble

The new restrictions on US work visas for IT employees will further deepen the difficulties faced by the Indian firms, according to National Association for Software and Services Companies (NASSCOM).

Proposed regulations like HR 170 and doubling of visa fees have increased the burden on local technology firms.

NASSCOM President R Chandrashekhar told ET, "The US government's immigration policy is creating an artificial distinction between one company and another. Our problem, which we have brought to their attention, is that you cannot and should not be doing things which discriminate against Indian companies even though you have not named them."

What is HR 170

In November, US president Donald Trump’s election promise to protect American jobs moved a step closer with the judicial committee of US House of Representatives approving The Protect and Grow American Jobs Act (HR 170). It is now awaiting a nod from the US Senate.

The Bill, introduced by Republican Congressman Darrell Issa could have negative impact on Indian IT companies

"This is a challenging Bill for India-centric companies. It puts the burden of compliance on H1-B visa-dependent companies, creating an uneven playing field among competitors,” says Shivendra Singh, vice-president, global trade development at Nasscom told Business Standard. Experts say IT companies that do not rely largely on H1-B visas for servicing of clients might get a competitive advantage. “We want all companies to be treated equally,” says Singh.

Highlights

— Hike the minimum wage requirement for exemption from hiring US workers first by 50 per cent, to $90,000 per annum from the current $60,000
 

— An exemption is available if the H-1B employee receives yearly pay wage of $60,000 or higher
 

— Further exemption from this provision is granted to a H-1B employee with a master’s degree
 

— Indian IT companies normally pay more than $60,000 and avail of the exemption

According to a report published in Business Standard, Nasscom plans to raise the decibel count in highlighting the minuses in the proposed legislation. Saying it was “being driven by myths, not reality,” the industry body warned that “the Bill could harm US businesses, imposing an extraordinary amount of bureaucratic red tape, disrupting the marketplace, threaten US jobs and stifle US innovation by unfairly and arbitrarily targeting a handful of companies”.

US shortage of STEM

The US currently has a shortage of about two million STEM (Science, Technology, Engineering and Mathematics) workers, while India has an excess of those skills. This means that despite the higher scrutiny on H1-B visas, India will continue to be the biggest source of STEM-related jobs in the US.

Drop in Visa Applications

Since January 2016, all companies which have over 50% of their workforce on visas in the US have to pay an additional $4,000 - $4,500 per visa, Indian companies with a higher percentage of on-site workers in the US are most affected by the fee increase.