H-1B visa update: US Administration’s new visa restrictions to affect Indian IT professionals

Less than four weeks ahead of the Presidential election, the US Administration has announced new restrictions on H-1B non-immigrant visa programme, which it said is aimed at protecting American workers, restoring integrity and to better guarantee that H-1B petitions are approved only for qualified beneficiaries and petitioners. The move is seen to affect thousands of Indian IT professionals.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise.

Industry body Nasscom said the changes announced to the H-1B visa programme will restrict access to skilled talent as well and harm the American economy and jobs. “Nasscom believes that the changes announced to the H-1B visa programme will restrict access to talent and will harm the American economy, endanger US jobs, put US interests at risk, slowing down R&D into solutions to the Covid crisis. It is important for the US market to be able to access skilled talent for its businesses, especially during the Covid recovery phase,” Nasscom said in a statement.

The new rules, which are expected to be published in the Federal Register on October 8, will be effective in 60 days post the publication. According to the department of homeland security, the H-1B programme was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy, however, it has now expanded far beyond that, often to the detriment of US workers.

The draft mentions a new definition for ‘speciality occupations’ wherein there must be a direct relationship between the required degree field(s) and the duties of the position. Under this new rule, the petitioner will have the burden of demonstrating that there is a direct relationship between the required degree in a specific speciality and the duties of the position he/she is applying to. The new rules require companies to make “real” offers to “real employees”, by closing loopholes and preventing the displacement of the American worker. Further, the rules will enhance DHS’s ability to enforce compliance through work site inspections and monitor compliance before, during, and after an H-1B petition is approved.

According to Nasscom, the overall US unemployment rate grew from 4.1% in January 2020 to 8.4% in August 2020, while unemployment in computer occupations declined from 3% to 2.5% in this period. In the 30-day period ended September 28, 2020, there were over 652,000 active job vacancy postings advertised online for jobs in computer occupations, up from 625,000 vacancies in the 30-day period ended May 13, 2020. “That is, despite the high degree of overall unemployment in the US, demand for high-tech skills continues to remain robust – clearly endorsing the argument that there are just not enough workers with relevant skills to fill them. The new rules announced will worsen this talent gap by making it more difficult for US employers to hire foreign workers,” Nasscom said.

Indians avail 70% of the 85,000 H-1B visas issued every year. These are mostly employees of Indian IT services firms like Infosys, Wipro and HCL. The visa limit has not been affected since 2004.

The rules may make employers pay higher wages to existing foreign workers, across all the four levels, particularly in software industry. “It is too nascent to predict the outcome. Having said that, the rules will bring in a change in the way compensation is structured. Wages will be based on experience and geography. This will help Indians on H1 with an opportunity to earn more,” said Siva Prasad Nanduri, VP & business head, TeamLease Digital.