Breakdown of H-1B reform Bill & How will it affect India ?
Trump administration has drafted an executive order aimed at examining the current work-visa programmes, including the H-1B visa. The amendments to the visa norms, in line with Trump’s 'America First' strategy, threaten the IT sector jobs outsourced to Indians.
Here is what the bill does:
- Removes the per-country cap on employment-based Green Cards. Per-country cap is the main reason for Indians waiting 10-20 years for greencard.
- Gives EAD’s to beneficiaries of approved immigrant petitions (I140-EAD) so employees are not dependent on their employers to maintain status in the United States.
- Cracks down the displacement of American Workers by eliminating common loopholes like the artificially low salary requirements and the much abused Master’s Degree exemption.
- Allocates H-1B visa’s by market demand – by prioritizing employers willing to pay the highest wages as compared to the wage level in their regional labor market – along with a well thought out carve-out for startups.
- Cracks down on common abuse of H-1B workers by requiring that employers provide their workers with their paperwork and prohibition of the common practice of clawing back so-called “liquidated damages” when the employee leaves the employer.
- Fixes core problems in immigration law by making Students eligible for dual intent.
Notice how few H1B workers Google/Amazon/Apple uses. Even a Wall Street bank like JP Morgan uses more H1B visas than Apple.
An accounting firm(!) like Ernst & Young issues roughly the same amount of H1B visas as Apple & Amazon put together. Infosys issues more Visas than the top 5 US tech companies combined.
- IT outsourcing company stocks will take a hit in the short term.
- Significant number of H1B holders will return to their home countries as employers might not able to justify doubling their salaries for the work they get done right now.
- Many Europeans who currently cannot get into US through H1B will benefit as the flooding from Indian IT companies will stop.
- In the long run Silicon Valley will benefit but will be hit in the short term.
- Likely improvement in the quality of Indian engineers as there are less chances of getting lucky with the visa.
Most people in India have this dream of getting an engineering degree and moving abroad. Nothing wrong with that. Probably they've seen their not so talented friends move abroad. When it becomes clear that only talent is rewarded not luck, then they might move on to the fields they are really interested in instead of chasing the "American Dream".
Now that the salaries will probably be increased to USD 130,000 and if this Bill does become a law, it will significantly raise costs for Indian IT companies deploying their staff overseas and force them to do more local hiring.
Indians with H-1B and L-1 visas contribute USD 1 billion annually to the US, according to NASSCOM estimates. Indian IT industry contributes to about 4 lakh direct and indirect jobs in the US , contributing for about USD 5 billion in taxes annually. Nearly 60 percent, or about 65,000, of the total H-1B visas are issued to Indian contingent, mostly in the IT sector.
So if you aren't in the top of the top, the companies who will be paying you 130k will not even hire you stating that you aren't good enough. It's either pay more for less quality or hire folks who are worth 130k.