Axe on H1B Visa? US Bill Placed in Upper House; How Indian IT Firms Stack Up?

Finally, the Bill on High-Skilled Integrity and Fairness Act of 2017 has been introduced in the US House of Representatives seeking to double the minimum salary of H-1B visa holders to US$130,000, making it a mockery if American firms deny recruiting locals at a lower cost. Currently, the minimum wage cap on H1B Visa seekers is US$60,000 that was set in 1989.

The anti-H1B Visa Act, as is known among the Indian IT workers and firms in the US, was introduced by California Congressman Zoe Lofgren based on market requirements for visas to those companies willing to pay 200 percent of a wage given to local employees.

“My legislation refocuses the H-1B programme to its original intent to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them,” said Lofgren. He said the Bill seeks to remove the ‘per country’ cap on immigrant visas so that employers hire the most skilled workers without regard to nation of origin.

It raises the salary level at which H-1B dependent employer are exempt from attestation requirements to a new required wage level of 35 percentile points above the median national annual wage for Computer and Mathematical Occupations published by the Department of Labour Occupational Employment Statistics, which eliminates the Master’s Degree exemption for dependent employers.

The legislation also seeks 20 percent of the annually allocated H-1B visas for small and start-ups. It also removes visa hurdles for students by building a bridge from F-1 student status to Lawful Permanent Residence without any paperwork and reducing administrative costs.

The Bill, if approved, would affect the entire gamut of IT companies in India which are solely dependent on H1B visa to depute its skilled techies to the US and save millions of dollars in projects running into months or few years.

Infosys alone has 14,659 employees working in the US on H-1B visas and 1,364 employees on L-1 visas as of FY ending March 2016. TCS has reduced its dependence on visa in the past three years and stepped up local hiring, while Wipro has 40% locals in its overseas offices. HCL has 65 percent locals in its US offices.

According to a study by the Bank of America Merrill Lynch, every 10% hike in H1B visa holder abroad would amount to 5% negtive impact on an average on a company’s earnings. Since the new Bill seeks almost 100% over the existing salary, it may virtually undercut the earnings by 50 percent, which may force several IT companies either to hire local workforce or stop seeking H1B visas altogether.