H1-B visa: US legislation which proposes hike in minimum wages will affect Indian IT companies

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New Delhi | November 18, 2017 3:53 PM

On November 16, a key Congressional committee passed the legislation that proposes to increase the minimum salary of H-1B visa holders and imposes a number of restrictions on the work visa that is popular among Indian IT professionals.

H1 B visa: US legislation which proposes hike in minimum wages will affect Indian IT companies

A new legislation on H1-B visas which proposes an increase in minimum wages, paid to foreign tech workers from $60,000 to $90,000 employed in the US has raised concern in India with NASSCOM saying that the proposed law is arbitrarily targeting Indian companies which took up only a small portion of these visas last year. On November 16, a key Congressional committee passed the legislation that proposes to increase the minimum salary of H-1B visa holders and imposes a number of restrictions on the work visa that is popular among Indian IT professionals.

According to Sanjoy Sen, a doctoral scholar at Aston Business School, in UK, The raising of the salary limits for H1B will definitely create a short-term jolt among Indian IT companies who were expecting the earlier limit of US $60,000 to be raised to around US $90,000-100,000 but not $130,000.

The Protect and Grow American Jobs Act (HR 170) which was introduced by Darrell Issa, the Chairman of the Courts, Intellectual Property and the Internet subcommittee was passed by the House Judiciary Committee during a markup hearing. The bill now heads to the full House for necessary action. A similar version of the bill needs to be passed by the Senate before it can be sent to the to President Donald Trump to be signed into law.

Major Indian IT companies paid project managers between $85,000 and $130,000 in the US last year — with salaries varying between US states — while technology leads were paid between $65,000 and $100,000, and systems engineers around $ 65,000, according to data available online. Given the mood against H1B workers since the ascension of the Trump government early this year, Indian IT firms have incidentally been scaling down dependency on H1B visas and claim to have sought only 16 per cent of the visas this year, unlike in previous years where 70 per cent was sought. A drop in demand for H1B visas has been apparent in the number of visas sought by big Indian IT companies. According to online records at some US visa data sites, companies like Infosys, Cognizant, Wipro and TCS, who have been dependent on Indian IT workers in the US in the past, slashed H1B visa applications from nearly 2.75 lakh in 2015 to around one lakh in 2017. The mainstream IT companies are looking at hiring more US citizens and moving work offshore to India to compensate for the tightening of H1B visa norms over the last year. IT body shops in India and their US affiliates have also been reporting big cuts in applications.

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