Indian IT firms to pay cost of H-1B Bill

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Bangalore | Updated: December 10, 2015 1:38:20 AM

It’s a development that could hurt Indian information technology services players, two US senators have proposed a Bill to prune the number of H-1B Visas issued by that country by 15,000.

TCS Q2 resultsCompanies such as Tata Consultancy Services, Infosys and Wipro depend heavily on these visas to execute contracts in the US. In addition to H-1B visas, Indian IT firms also use short-term L-1 visas.

It’s a development that could hurt Indian information technology services players, two US senators have proposed a Bill to prune the number of H-1B Visas issued by that country by 15,000. The US allows maximum 65,000 H-1B visas annually and an additional 20,000 for those who have completed higher education in STEM or science, technology, engineering and maths.

Senators Bill Nelson of the Democratic Party and Jeff Sessions of the Republican Party have also said applicants for H-1B visa will be prioritised based on the salary they earn — the higher the salary, the higher the chances of getting an H-1B visa.

Companies such as Tata Consultancy Services, Infosys and Wipro depend heavily on these visas to execute contracts in the US. In addition to H-1B visas, Indian IT firms also use short-term L-1 visas.

“By cutting the number of visas available each year and requiring those visas be given to the highest-wage earners first, this Bill directly targets outsourcing companies that rely on lower-wage foreign workers to replace equally-qualified US workers,” Nelson said.

A separate legislation filed by Nelson and a few other senators would require employers to prove that they first tried to hire an American employee before hiring a foreign recruit.

Nasscom president R Chandrashekhar has said in the past that the organisation has expressed its concerns at length to the authorities in the US, both lawmakers and those in the administration. “We remain hopeful these concerns will be taken note of especially in the context of the deepening strategic and economic partnership of both the countries,” Chandrashekhar said.

For several years now, Nasscom has lobbied against any proposed legislation curtailing the number of H-1B visas. The latest round of measures by US lawmakers is the second in a span of one month. In November, two senators — Chuck Grassley and Dick Durbin — had introduced a Bill that would require all companies that want to hire workers under the H-1B visa to first try to hire US citizens. In addition, firms that employ more than 50 people and have more than half of their staff on H-1B and L-1 visas would be barred from hiring new workers on H-1Bs.

One senior IT executive said the pressure tend to build up around the time of the US presidential elections. The industry’s toughest challenge has been the proposed Immigration Bill, which contained stifling provisions on the use of H-1B visas. This Bill has been approved by the US Senate sans some of the harmful provisions though it is yet to be passed by the US House of Representatives.

On the real impact from this proposed Bill if it passes the muster of legislature approval, Sanjoy Sen, doctoral research scholar at the UK’s Aston Business School, said, “The Indian IT sector is likely to be impacted by this potential legislation at the more junior staff levels. This is because senior staff are now increasingly being employed locally by the overseas subsidiaries of the major IT companies of Indian origin.”

Sen felt that Indian IT companies may also step up their acquisition of overseas companies to further accentuate the proportion of their overseas staff and they have already started doing.

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