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Explained: How new H-1B visa regime will impact Indians, Indian companies

10th October, 2020 Economy
  • H-1B visas, most often used by Indian and Chinese companies, are generally approved for a period of three years.
  • The visa norms have often been criticised for allowing cheap labour in the US at the expense of its local workforce.
  • Recently, the US administration announced an “interim final rule” which will “strengthen” the non-immigrant work visa programme.

What is an interim final rule?

  • Executive policies announced by agencies such as the Department of Homeland Security (DHS) or the US Citizenship and Immigration Services (USCIS) require them to consult stakeholders and give them a notice period of 60 days and seek comments before any sweeping changes are brought in.
  • This method allows agencies to act with urgency and within a specified time after a new rule or law is made.
  • The impact that the pandemic was having on the US economy and its domestic workers was an “obvious and compelling fact” which justified the agency issuing an interim final rule.

What are the new proposed changes?

  • The new rule will narrow down the definition of what constitutes a “specialty occupation”.
  • This means that companies and agencies which hire workers on H-1B visas will have a tough time proving to the immigration agencies that such employees are not available from the domestic pool of US workers.
  • The second proposed change relates to companies allegedly making fictitious work offers to fictitious employees just to fulfil their quota of H-1B visa applications approved.
  • The third and final proposed rule change talks about better enforcement of the new H-1B norms, through worksite inspections and monitoring compliance, before, during and after the H-1B work visa is approved.

How will the changes impact Indian IT and other H-1B visa holders?

  • Every year, the US administration issues 85,000 H-1B work permits in all.
  • Indians and Indian companies corner a lion’s share of the number of H-1B work permits issued each year.
  • According to official data. Indians had applied for as many as 1.84 lakh or 67 per cent of the total H-1B work visas.
  • Though Indian information technology giants such as TCS, Infosys, Wipro, HCL and others have in the past insisted that they have reduced their dependence on H-1B visas to a large extent, a reduction in the overall quota of H-1B visa workers would still mean that the number of workers they would either have to shell out more money to hire local talent or pay more to the existing H-1B work visa holders.
  • The proposed change could also impact global IT companies which hire H-1B visa workers in a great number.
  • The visa norms have often been criticized for allowing cheap labour in the US at the expense of its local workforce.

What happens to the old rules and relaxations announced on H-1B visa regime?

  • The changes are seen as a poll promise being fulfilled by US President Donald Trump.