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Senate wants change in H1B norms; fewer visas may come by

Published on Mon, Feb 09, 2009 at 08:47 | Source : CNBC-TV18

Updated at Wed, Feb 11, 2009 at 09:27

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There is more grim news for Indian H1B visa seekers in the financial sector. The US Senate has declared that any company using US taxpayer-funded bailout money cannot hire H1B workers for two years if they have laid off American workers in the past six months. Will this amendment stay in the final stimulus package bill that goes to the White House for President Obama's signature, and what will it mean for Indian professionals? CNBC-TV18's Indira Kannan finds out more.

Capitol Hill's anger towards Wall Street has now hurt Indian H1B visa seekers in the crossfire. According to the Senate's version of the stimulus package, recipients of TARP (Troubled Asset Relief Program), the bailout fund that have laid off American workers in the past six months will not be allowed to hire H1B workers for two years. The amendment was passed by a voice vote on Friday. Immigration lawyers say Indian jobseekers need to be worried.

Adam Ketcher, Immigration Lawyer, Cyrus D Mehta & Associates, said, "If their degree is in finance or some occupation that's related to what TARP is to alleviate or where it's looking to alleviate financial pressures, then they should have serious concerns about whether or not their employers or prospective employers will be able to sponsor them."

While proposing the amendment, the senators cited a recent media report that said major US banks had requested visas for over 21,800 foreign workers in the past six years, including last year, even as the financial system was melting down and employees were getting laid off. But the American Immigration Lawyers Association says the numbers are misleading

Adam Ketcher, Immigration Lawyer, Cyrus D Mehta & Associates said, "They looked to scapegoat foreign industries and when they saw they were going to face a trade war, they turned to foreign workers. The backlash is that one sees anyone that's not a US citizen as a threat to US jobs. But the fact is the problems in this economy are fundamental to the way the US economy is structured and has nothing to do with our use of foreign workers, who normally fill positions in which there's a shortage in the United States of qualified candidates."

After the Senate passes the larger stimulus bill, the House and Senate versions will be reconciled by a conference committee before the final legislation is sent to the White House. It is theoretically possible for the conference committee to drop or modify the amendment. But the protectionist mood on Capitol Hill is apparent.

As the US recession continues, the populist backlash against programs like the H1B, which are perceived as taking jobs away from American workers, is likely to intensify, especially with the Democrats, with their pro-labor stance, controlling both the US Congress and the White House.

Meanwhile companies that opt out of TARP funding can resume hiring H1B workers even during the next two years. CNBC-TV18's Raja Rajeshwari finds out what will be the impact of it on Indian IT industry?

The general sense you get from most Indian IT companies is that this is better than what it could have been, earlier it was going to be complete ban on even hiring of H1 Visa workers. Now you get a diluted version of it which is a bailed out company which has taken money from the TARP will now have to operate lighter H1B dependent company which means it can hire people but it should not displace any US workers and then fill back vacancy with H1B visa holders and this is applicable for two years time.

Earlier when the news had broken out, there were concerns about what happens with Indian IT's banking clients which have tabbed into TARP companies. You have the case of American Express, Bank of America, FICCI, lot of these big marquee banking names which are also clients for Indian IT companies, how will they be impacted.

Infosys has spoken about this. This is largely applicable to only those companies like the end banking company which wants to go and hire people. So if Infosys is likely to hire people for servicing their Citibank account, it is not likely to be impacted. If it's Citi after having tabbing to TARP wants to go and hire H1B workers then it needs to work as an H1B dependent company. This is the important clarification and so most of our Indian IT companies are of the view that this is largely a temporary measure.

There is also a joint conference after the Obama package is passed and this has to be discussed and there are chances that this could be dropped itself because you see serious kind of voices coming after this legislation was passed. So short-term no impact and long-term we need to see if this legislation is indeed changed into law then there is a little bit of protectionism coming into US and IT companies maybe worried about it.

Nasscom said there is little bit of confusion in their statement and they will wait for more clarity. Nasscom is making an visit to US where they will be taking up all of these issues with Obama.

Reactions from Indian tech majors on the news

Infosys says current provision will not have material impact. Nasscom too says that these norms are unlikely to impact the Indian service providers.

Wipro said that there will be no impact in the short-term but it could hurt in the long-term. It further said that they have minimal exposure to such US companies. Wipro further said that such an ammendment applies only to direct hires by US companies.

Som Mittal of Nasscom said that it is a serious message that foreign students and workers are not welcome in the US. It further said that there is a need to separate immigration from H1B visas. According to Nasscom, IT companies will be forced to offshore more if such amendments become law

US Labour Department figures show decline in all other sectors except technology. So, there is demand of technology workers in the US.

Pratik Kumar, Head - HR, Wipro said, "The visa regime if capped would be a matter of concern and would be unfortunate."

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