H-1B visas: US lawmakers look to curb work permits, hit Indian IT

Staff Correspondent | Published: 21:08 pm, 06 Jan 2017, Fri

H-1B visas: US lawmakers look to curb work permits, hit Indian IT

The $150-billion domestic IT industry is expected to face further challenges from the US, its key market, as two American lawmakers have reintroduced a Bill that seeks to further place stringent conditions on H-1B visas, the key work permit for technology companies. The Protect and Grow American Jobs Act Bill introduced this week by US lawmakers Darrell Issa and Scott Peters among other things has sought that the minimum salary of H-1B visa holders be raised to $100,000 a year and that the master’s degree exemption be eliminated. They say this will help crack down on H-1B visa abuse and ensure that these jobs remain available for the best and brightest talent from around the world. Indian IT companies like TCS, Infosys, Wipro and HCL Technologies are heavily dependent on H-1B visas to execute their contracts in the US and any changes in this work permit is expected to have at least a short-term impact. Further, Indian companies also account for the largest share of the 65,000 H-1B visas given out annually by the US. According to estimates, visa costs account for anywhere between 1% and 1.5% of an IT company’s revenue and any change in this ratio will have a direct bearing on operating profit margins. “In order for America to lead again, we need to ensure we can retain the world’s best and brightest talent. At the same time, we also need to make sure programmes are not abused to allow companies to outsource and hire cheap foreign labour from abroad to replace American workers,” Issa said. Home Jobs H-1B visas: US lawmakers look to curb work permits, hit Indian IT   H-1B visas: US lawmakers look to curb work permits, hit Indian IT The $150-billion domestic IT industry is expected to face further challenges from the US, its key market, as two American lawmakers have reintroduced a Bill that seeks to further place stringent conditions on H-1B visas, the key work permit for technology companies. By: PP Thimmaya | Published: January 6, 2017 6:51 AM 51 SHARES Share to FacebookFacebookShare to TwitterTwitterShare to Google+Google+Share to LinkedInLinkedInShare to EmailEmail Indian IT companies like TCS, Infosys, Wipro and HCL Technologies are heavily dependent on H-1B visas to execute their contracts in the US and any changes in this work permit is expected to have at least a short-term impact. (Reuters)   The $150-billion domestic IT industry is expected to face further challenges from the US, its key market, as two American lawmakers have reintroduced a Bill that seeks to further place stringent conditions on H-1B visas, the key work permit for technology companies. The Protect and Grow American Jobs Act Bill introduced this week by US lawmakers Darrell Issa and Scott Peters among other things has sought that the minimum salary of H-1B visa holders be raised to $100,000 a year and that the master’s degree exemption be eliminated. They say this will help crack down on H-1B visa abuse and ensure that these jobs remain available for the best and brightest talent from around the world. Indian IT companies like TCS, Infosys, Wipro and HCL Technologies are heavily dependent on H-1B visas to execute their contracts in the US and any changes in this work permit is expected to have at least a short-term impact. Further, Indian companies also account for the largest share of the 65,000 H-1B visas given out annually by the US. According to estimates, visa costs account for anywhere between 1% and 1.5% of an IT company’s revenue and any change in this ratio will have a direct bearing on operating profit margins. “In order for America to lead again, we need to ensure we can retain the world’s best and brightest talent. At the same time, we also need to make sure programmes are not abused to allow companies to outsource and hire cheap foreign labour from abroad to replace American workers,” Issa said. You May Also Want To Watch:     This legislation could further pressure Indian IT firms to increase local hiring in the US. Sid Pai, managing partner, Tekinroads, a technology consulting company, told FE this could be an opportune time for Indian IT companies to hire more Americans and also try to change the perception that firms from India are global in nature. He added that there was not much of a cost differential between employees under H-1B visas and those of locals. “The legislation we’re introducing today does both. It will ensure that our valuable high-skilled immigration spots are used by companies when the positions cannot be filled by the existing workforce. This bipartisan Bill makes one of the much-needed updates to our high-skilled visa system to level the playing field and help prevent companies from taking advantage of the system to offshore jobs,” Issa and Peters stated. This Bill gains significance as US president-elect Donald Trump is expected to give a push for companies to hire more in America with preference to local employment. He has also promised reforms in the immigration system and sought investigation for any abuses in the visa programme. Trump has listed immigration reform among five executive actions he plans to take on his first day in office. They include asking the department of labour to investigate “all abuses of the visa programmes that undercut the American worker”.