In a move that could potentially hurt Indian IT companies with US operations, a key Congressional committee has cleared a legislation that proposes tougher H-1B visa norms, including a steep hike in minimum annual salary from $60,000 to $90,000.
The legislation, called the “Protect and Grow American Jobs Act”, introduced by Republican Congressman Darrell Issa, was passed by a voice vote during a markup hearing of the House Judiciary Committee on Wednesday.
The Bill will now head to the full House for a floor vote, but, even if passed by the House, it may still be a long way before it can be
signed into law. For, the Senate will have to pass a similar version of the legislation.
Even so, Indian IT firms have reasons to dread the legislation. They will be hit by a key provision in comparison to American companies. The new legislation prescribes that a company will be considered H-1B dependent if 20 per cent or more of its workforce hold this work visa.
While major US firms may well have less than 20 per cent of their workers on H-1B visas, the top Indian IT firms, such as TCS, Infosys and Wipro, draw the bulk of their requirement from this visa pool.
The hefty hike in minimum salary payable to a H-1B worker is also expected to hurt the Indian firms.
More stringent scrutiny of H-1B visa dependent employers is also proposed. The companies will be required to send reports to the Department of labour about efforts to recruit American workers. The department will be directed to conduct as many as five random investigations of H-1B dependent employers annually.
The Bill’s provisions also aim to prohibit H-1B dependent employers from replacing American workers with the foreign guest workers
coming to the US under this visa programme.
As Indian software professionals account for roughly 60 to 70 per cent of the 85,000 H-1B visas issued annually, the new stringent provisions have a grim message both for Indian IT companies and techies.
The National Association of Software and Service Companies (NASSCOM), the industry body of Indian IT companies, has wasted little to voice its concerns over the bill which, it reckons, will disproportionately affect the Indian companies.
The Bill, NASSCOM president R Chandrasekhar said in a statement, would harm US businesses and impose an extraordinary amount of bureaucratic red tape on a programme that contributes greatly to US prosperity.
“It also could disrupt the marketplace, threaten thousands of US jobs, and stifle US innovation by unfairly and arbitrarily targeting a handful of companies who used just 16 per cent of the new H-1B visas in the financial year 2016 while imposing no new requirements on the vast majority of companies that use the visas to do the same exact same things,” Chandrasekhar said.
Congressman Issa, however, defended his Bill and its stringent norms.
“Unfortunately, the loopholes left open in H-1B have allowed a small handful of companies to game the system and crowd out employers who need the limited slots available to bring in the best and brightest individuals from around the world,” he said in a statement.
Issa claimed that his legislation will serve as “a common-sense update that will go a long way to protecting American workers while helping companies have better access to the talent they need to grow their businesses and create new jobs here in America”.