Trump govt to make US firms pay more for H1-B staff, tighten visa rules

The move has been taken based on 'misinformation' and is conterproductive to US economy, says Nasscom

The US government has published a set of rules that will result in US companies shelling out more to hire foreign workers and narrow the criteria for visa applicants.

The Department of Labour increased the minimum wages for H-1B, H-1B1, E-3 and I-140s types of visas. The prevailing wage is subdivided into four tiers or wage levels, representing the range of skills from entry-level to experienced.

The rule changes the prevailing wage levels 1-4 from the 17, 34, 50 and 67th percentiles to 45, 62, 78 and 95 percentile of surveyed wages from Bureau of Labour Statistics. The wage hike rule takes into effect immediately. Most H-1Bs are actually paid in the bottom slots which have been hiked the most.

"The primary purpose of these changes is to update the computation of prevailing wage levels under the existing four-tier wage structure to better reflect the actual wages earned by US workers similarly employed to foreign workers," the department said in a statement.

This comes as US President Donald Trump heads for reelection in less than three weeks. Trump has been rhetoric of his anti-immigration stance ever since he arrived at the political scene four years ago. The US government has been taking stringent measures with respect to visa rules since the pandemic in order to encourage American workers over non-immigrant labour.

"They (US employers) will have to pay much higher salaries and the criteria to qualify an employee for an H-1B will be much harder," said Poorvi Choutani, founder and managing partner at LawQuest, a Mumbai-based immigration law firm.

"However, the rule is likely to be the subject of federal lawsuits. DOL took the rare step of issuing the regulation with immediate effect, no advance notice or opportunity for public comment, and without an economic impact analysis, all of which make the rule vulnerable to challenge. Plaintiffs in any litigation are likely to seek preliminary injunctions to block DOL from enforcing the rule while challenges are litigated in court," said Fragomen, a New York-based immigration services law firm.

Separately, the Department of Homeland Security (DHS) has released a long-planned regulation to tighten H-1B eligibility criteria and impose new obligations on H-1B employers after pushing the rule through a fast track regulatory review. 

The new rule will require companies to make “real” offers to “real employees,” therefore closing loopholes and preventing the displacement of the American workers. This will also DHS’s ability to enforce compliance through worksite inspections and monitor compliance before, during, and after an H1-B petition is approved.

An H-1B specialty occupation is one that normally requires a bachelor’s degree or equivalent as a minimum requirement. "The new regulation tightens the regulatory definition of a specialty occupation to mandate that the bachelor’s degree requirement be more directly related to the specific H-1B specialty. The rule explicitly states that a position is not a specialty occupation if a general degree – such as business administration or liberal arts – is sufficient to qualify, without any further specialisation," Fragomen said.

The rule will be published in the Federal Register on October 8 and take effect 60 days later. It will apply to all H-1B petitions, including extensions and amendments, filed on or after the effective date of the rule.

US Secretary of Labour Eugene Scalia said that these changes will strengthen foreign worker programmes and secure American workers’ opportunities for stable, good-paying jobs.

Nasscom believes that the changes announced to the H-1B visa program will restrict access to talent and will harm the American economy, endanger US jobs, put US interests at risk, slowing down research and development into solutions to the Covid crisis.

"These regulations seem to be based on misinformation about the programme and runs counterproductive to their very objective of saving the American economy and jobs," said the tech industry body. 

The overall US unemployment rate grew from 4.1 per cent in Jan-2020 to 8.4 per cent in August-2020; while unemployment in computer occupations declined from 3 per cent to 2.5 per cent in this period, which indicated a "robust demand" for high-tech skills and not enough talent to fill the gap. "The new rules announced will worsen this talent gap by making it more difficult for US employers to hire foreign workers," it added. 

Tighter rules ahead of Presidential polls

• The Department of Labour has increased minimum wages for H-1B, H-1B1, E-3 and I-140s visas. The wage hike is across range of skills—from entry to experienced.
• The Department of Homeland Security (DHS) has narrowed the definition of "specialty" occupation of H1B visa applicants. 
• This comes as US President Donald Trump heads for reelection in less than three weeks. 
• Nasscom believes that the changes announced to the H-1B visa program will restrict access to talent and to be devised based on misinformation