H1B visa bill introduced; can be a blow for Indian IT sector

By -Kirtika Chander

India's information technology (IT) sector will face temporary setback to move workers from India to the US with the bill introduced in the US House of Representatives that mandates minimum wages of H1B visa holders at $130,000, making it difficult for firms to use the program to replace American employees with foreign workers, including from India.

This is more than double of the current H1B minimum wage of $60,000 which was established in 1989 and since then has remained unchanged.

The US administration had drafted an executive order to overhaul the H1B work-visa program that software services firms based in India use to send skilled workers to the US.

The draft bill aims to make it difficult to replace US employees with foreign workers and experts say it is likely to deal a body blow to companies such as Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd in its present shape.

Around two-thirds of H1B visa applicants are Indian nationals who either work for Indian IT services firms such as TCS, Infosys and Wipro or the local operations of US firms such as Accenture, IBM and Google.

“My legislation refocuses the H-1B program to its original intent—to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them,” said Lofgren.

The Congressman said the legislation also proposes removing the 'per country' cap for employment-based immigrant visas, so that all workers are treated more fairly and to move to a system where employers hire the most skilled workers without regard to national origin. It raises the salary level at which H-1B dependent employers are exempt from attestation requirements to a new required wage level of 35 percentile points above the median national annual wage for Computer and Mathematical Occupations published by the Department of Labor Occupational Employment Statistics (roughly $132,000), which would be adjusted in the future without the need for new legislation, and eliminates the Master's Degree exemption for dependent employers.

“The bill has been introduced. It has to go through the US legislative process before it becomes a law,” said an executive of an IT services firm. “Let us not panic and we will wait for an outcome."

Donald Trump has taken the strict action against the immigrants who he thinks have stolen occupations from the US natives. Indeed, even the organizations which avail IT services from Indian IT organizations have to pay a weighty cost.

India expects that the immigration restrictions could see more work being off shored to the country as US firms look to cut costs and improve efficiency due to high cost labor in their country.