US H1B Visa Bill and the Issue – Explained simply:
What is an H1-B Visa?
- Any citizen of a foreign country who wishes to enter the United States must first obtain a visa, either a nonimmigrant visa for temporary stay, or an immigrant visa for permanent residence.
- Temporary worker visas are for the persons who want to enter the US for employment for a fixed period of time, and are not considered permanent or indefinite.
- The US H-1B visa is a nonimmigrant visa that allows US companies to employ graduate-level workers in specialty occupations that require theoretical or technical expertise in specialized fields for a certain period of time.
What is the H1-B Visa Bill?
- The Bill is aimed to encourage the American companies to recruit American workers. It explicitly prohibits replacement of American workers by H1B or L1 visa holders.
- The Bill seeks to increase the minimum salary of H1-B visa holders from $60,000 to $1,00,000 per annum.
- By raising the minimum salary to the average American salary for these positions, it will discourage the US companies to recruit non-American workers through the H1B Visa. Instead, they are encouraged to recruit the Americans.
- The Bill also seeks to raise the minimum educational qualification to the Master Degree from the present graduate level qualification.
- It also prohibits companies from hiring H1-B employees if they employ more than 50 people and more than 50 per cent of their employees are H1B and L-1 visa holders.
How will the Bill affect the Indians and Indian companies?
- If this reform bill goes through, the resultant increase in the minimum employee wages will be an cost burden for the IT industry.
- For the Indian firms, the challenge would be more on increased local hiring. Such wage hikes may hit their profit margins initially, but in the long run they will have to rethink over more local hiring.
- Indian IT stocks took a beating after the re-introduction of the bill. The top four companies — TCS, Infosys, Wipro and HCL Tech — together lost over Rs 22,000 crore in market valuation.
- “This has just been introduced in the house, we have to still see what the new president does. If the bill passes we will have to adapt. The industry has already started hiring onshore so that will increase,” an executive with a large IT company said.
- Apart from the visa curbs, the U.S. had also recently hiked the visa fee for certain categories of the H1B and L1 visas which will have an impact on the Indian companies.
How it will affect the American Economy too?
- Indians with H1B and L-1 visas contribute more than USD 1 billion revenue, annually to the US.
- Indian IT industry contributes to about 4 lakh direct and indirect jobs in the US , contributing for about USD 5 billion in taxes annually.
- A stricter immigration law towards H1B visas is likely to hurt the American economy, as the people working in American IT companies like IBM holding H1B visas are adding value to American companies.
- With the Industry seeing a shift from traditional services to digital technology delivery, they will need more on-site deployment.