New H1B visa norms may hit Indian software companies

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IT industry body Nasscom on Friday brushed off concerns emanating from the new US immigration bill to restrict issuance of H1B visas to Indian companies.

Democratic Congressman Bill Pascrell from New Jersey and Republican Dana Rohrabacher from California introduced the ‘H-1B and L1 Visa Reform Act of 2016’ in the House of Representatives.

The bill seeks companies to stop hiring H-1B employees if half of their staff is H1-B and L-1 work visa holders.

If passed by the Senate and signed into a law by U.S. President Barack Obama, the bill is feared to leave major impacts on Indian IT companies operating in the US. So far, the bill is not tabled before the Senate.

Pascrell’s explanation

“America is producing many skilled, high-tech professionals with advanced degrees and no jobs. By in-sourcing and exploiting foreign workers, some businesses are abusing the visa programs and undercutting our workforce to reap the rewards,” said Bill Pascrell.

According to Nasscom, 65 percent of India’s IT revenues originates from the US. The industry body jointly with McKinsey has forecast that IT revenues would be at $250 billion by 2025. Indian IT companies are already worried about the Brexit decision by UK.

“Without the critical reforms our bill proposes, American workers will continue to be unfairly displaced and visa workers will continue to be mistreated – both of which are unacceptable,” said Bill Pascrell.

Foreign outsourcing companies are the top users of the H-1B and L-1 visa programs. He points out that a number of concerns have been raised over the years about how certain companies have been using these visa programs.

Pascrell and Rohrabacher expect the H-1B and L-1 Visa Reform Act of 2016 would close loopholes in the H-1B and L-1 visa programs, reduce fraud and abuse, provide protections for American workers and visa holders.

Furthermore, the bill will call for more transparency in the recruitment of foreign workers and increase penalties on those who violate the law.

In 2010, they have introduced a similar bill, which failed gain support in the Congress.

IT job in US

The U.S. information technology (IT) sector added 32,100 new jobs in June, according to an analysis of Bureau of Labor Statistics data by CompTIA.

IT sector employed 4,389,600 jobs as of June 30.

“The IT sector grew at a faster rate than overall national employment,” said Tim Herbert, senior vice president, research and market analysis, CompTIA.

Telecommunications sector added 28,100 jobs – primarily due to the return of Verizon employees to work after the strike.

Search portals added 2,500 jobs; data processing, hosting and related services added 2,200 jobs; and IT software and services and computer systems design added 1,400 jobs. Computer and electronic products manufacturing lost 2,100 jobs in June.

The IT sector has added 43,900 new jobs in the first six months of 2016, with the IT services category accounting for 90 percent of those gains.

IT occupation employment gained 74,000 jobs in June, and stood at 4.526 million at the end of the month.

Support from US

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Institute of Electrical and Electronics Engineers (IEEE) have voiced in support of the bill.

“We applaud the long-term commitment to addressing the glaring gaps in protections in our current skilled visa programs,” said AFL-CIO Government Affairs Department Director William Samuel.

“These loopholes have resulted in the mistreatment of H-1B workers and U.S. workers alike, and have led to the egregious displacement scandals that continue to make headlines and discredit these programs. There are tens of thousands of high-skilled workers and visa beneficiaries within the membership of AFL-CIO unions, and we are deeply committed to ensuring program reforms that support the rights and interests of all workers in these industries.”

“It is more than clear that the H-1B and L-1 visa programs are being used by major companies across our economy to hire cheap, disposable workers in place of their American employees,” IEEE President Peter Eckstein wrote in support of the bill.

“Reports of Americans being fired and replaced by non-Americans, who will never be invited to become Americans, can no longer be dismissed as mere ‘anecdotes.’ Rather, outsourcing companies dominate the H-1B and L-1 programs, annually costing America tens of thousands of good, middle-class jobs,” said Peter Eckstein.

Indian IT industry response

“Such visas will not be any showstopper in this era of technology,” said NASSCOM chairman C.P. Gurnani on the sidelines of the ‘Nasscom Product Conclave’.

“The companies and the US Senate can be at odds with each other. The US corporations realise that 70 per cent of their work were being outsourced from outside,” he said.

He said that the industry association planned to make an appeal to the US administration and hoped the business would prevail as usual.

Arya MM
[email protected]

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