Coronavirus crisis: New US visa bill may spell trouble for IT firms

A new legislation in the US, which proposes to give preference to individuals educated in the US while granting H-1B and L-1 work visas, might spell trouble for Indian IT firms if it becomes a law.

According to immigration experts, though many such bills have been proposed during the presidency of Donald Trump, most have not become law. However, the high unemployment rate in the US because of the Covid-19 crisis might make such a legislation a reality.

“If this turns into a law, it will definitely impact Indian IT services firms. Firstly, if preference is given to US-educated individuals, Indian IT engineers educated here would be at a disadvantage, making it hard for Indian companies to transfer employees from India,” says Poorvi Chothani, managing partner at LawQuest, an immigration law firm with offices in India and the US.

“Secondly, most Indian IT firms are H-1B dependent employers in the US. So, if they are prevented from sponsoring such workers, their business will be in trouble,” Chothani adds.

This week, a bipartisan group of lawmakers introduced the legislation in both chambers of the US Congress, proposing that US-educated foreign technology professionals should be given priority while granting H-1B work visas. The legislation also proposes prohibiting replacement of American workers by H-1B or L-1 visa holders.

The H-1B and L-1 Visa Reform Act, as introduced in House of Representatives and Senate, will for the first time require US Citizenship and Immigration Services to prioritise the annual allocation of H-1B visas.

The bill proposes to prohibit companies with over 50 employees, of which at least half are H-1B or L-1 holders, from hiring additional H-1B employees. Once passed, the US Department of Labor will also have increased authority to review, investigate, and audit employer compliance with programme requirements, as well as to penalise fraudulent or abusive conduct.

Apart from these provisions, employers might have to disclose all information about H-1B and L-1 programme, including wage data, worker education levels, place of employment, and gender among others. The bill also proposes establishment of a wage floor for L-1 workers.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require technical expertise. Indians have been major beneficiaries of such visas over the years with global technology firms like Google, Microsoft, Apple along with Indian IT firms moving a lot of resources to the US.

On the chances of the legislation being approved by lawmakers, experts said that though such legislations had not turned into law, the high unemployment rate in the US might mobilise opinion in the legislation’s favour.

“There is a lot of anxiety in view of the increasing unemployment because of Covid-19, so if politicians can push this bill through, their vote bank would be happy, even though it is a bipartisan bill,” said Chothani.

—Smart Investor.in