COMMERCE FOR IAS – ALL THE BUZZ ABOUT H1B VISAS
US President-elect Donald Trump’s Attorney General Jeff Sessions has promised to take strict steps that will reduce the misuse of H1B and L1 visas.
WHAT ARE H-1B & L1 VISA?
The H-1B is a non-immigrant visa in the United States that allows U.S. employers to temporarily employ foreign workers in specialty occupations.
A bulk of these visas are issued to technology companies belonging to various nationalities.
H-1B visas admit 65,000 workers and another 20,000 graduate student workers each year and are assigned through a lottery once a year by United States Citizenship and Immigration Services.
Silicon Valley reportedly relies heavily on hiring talent from countries like India, a practice made possible through the H-1B visa programme for specialised workers.
L1 visa is an intracompany transfer visa. It is a permit to work for a company in USA, to which you are transferred from the parent or the sister concern company of your country. It is a non-immigrant visa, and is valid for a relatively short amount of time.
These types of visas are popularly used by the Indian IT professionals who are active in United States and if a legal step is taken, it will directly affect India’s IT sector as well.
WHY IN NEWS?
Trump Administration has promised to take strict steps that will reduce the misuse of H1B and L1 visas.
Reducing unemployment and solving the problem of immigrants in United States is on top of the agenda for Donald trump and team but skilled-foreign workers may end up paying a heavy price for it.
Many US workers advocate that the layoff of American workers and the replacement by cheaper, foreign, H-1B workers constitutes de facto nationality based discrimination against American workers
Re-introduction of the H1B visa reform Bill — ‘Protect and Grow American Jobs Act’ has further ignited the issue.
The key proposal in the Bill is to increase the salary of H1B visa holder to USD 100,000 (Rs 66 lakh) from USD 60,000 per annum and the cessation of an exemption of having a master’s degree.
It also prohibit a company from hiring H-1B employees if they employ more than 50 people and more than 50 per cent of their employees are H-1B or L-1 visa holders
HOW THE MOVE IMPACTS INDIA?
According to data from 2014, 86% of the total H1B visas issued that year for technology firms was used to hire IT professionals from India.
if the new government decides to pass new laws over the sanctioning of H1B and L1 visas, it could cause trouble for Indians who desire move to United States in search of better education and work opportunities.
Indian IT stocks will plunge & have already fallen by as much as 4 per cent 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. The passage of the Bill would impact IT companies operations and might lead to further increase in the onshore efforts and subcontracting expenses.
However, some feel that the Indian IT industry won’t be much rattled as the Indian tech companies have reached a level where they can easily adapt to changes in the US immigration rules. They also feel that shortage of local skilled tech workers in the US would make it difficult for the Trump administration to follow through the election rhetoric.
Hence, it is too early to precisely determine the exact impact of what all is transpiring in the present US politico-economic environment. Nevertheless, such changes can have wide ranging consequences which cannot be ignored at any cost.