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COVID-19 impact: Indian IT firms may forgo filing fresh H-1B petitions this year

Indians are one of the largest beneficiaries of H-1B visa. Indians make up more than 60 percent of the 85,000 H-1B visa petitions are approved every year.

June 26, 2020 / 06:37 PM IST
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Indian IT companies may forgo filing fresh H-1B petitions for FY21 and also delay filing extensions for their employees this year, sources have said.

Uncertainty due to the coronavirus outbreak and the recent US decision to freeze work visas till year-end are the reasons these firms are reluctant to go ahead, say immigration and industry experts.

Varuni*, an engineer, was looking forward to a project in the US and her company had initiated an H-1B extension. "But now the company has chosen not to proceed with it,” she said.

“I was told that they would be applying it next year. But there is no guarantee. Who knows what will happen in the next year,” she said.

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A source in another IT firm said the company had decided not to file any fresh H-1B or H-1B extensions till the virus crisis ended and entry bans lifted in the US.

Also Read | H-1B visa ban may not make that big a dent in top IT firms' revenues. Here's why

More companies are likely to take similar decisions in the coming months, two immigration experts told Moneycontrol.

Indians are one of the largest beneficiaries of H-1B visa meant for skilled employees. For FY21, 67 percent of more than 2.5 lakh registrants for H-1B lottery were from India, according to the US Citizenship Immigration Services (USCIS).

Also Read | What happens to H-1B workers stranded in India?

They have until June 30 to apply for the visa but as the process is expensive and uncertainty high, companies are likely to play safe, say experts.

Indians make up more than 60 percent of the 85,000 H-1B visa petitions that are approved every year. Close to a lakh Indians get their H-1B visa renewed and extended every year, according to the US State Department data. 

Top Indian H-1B employers include TCSInfosysWipro and Cognizant.

Why are they doing this? 

While the processing will continue for those who have filed fresh H-1B petitions for FY21, visa stamping will be delayed and travel cannot happen before January 2021. For new petitions, companies, however, are likely to take a step back.

Also Read: H-1B visa ban | Deeply disappointed by this proclamation, says Apple CEO Tim Cook

The USCIS will start accepting new petitions from March 2021 and by then companies will get more clarity on COVID-19 as well as immigration reforms.

A majority of the Indian employees who got their H-1B stamped this year were unable to travel because of the COVID-19 crisis. This could also play a role in companies choosing not to fresh file petitions. An H-1B visa is valid for three years.

In an earlier interaction with Moneycontrol, Sheela Murthy, founder, Murthy Law Firm, said about 20 percent of the firms were shying away from sponsoring H-1B petitions due to uncertainty over immigration.

US President Donald Trump, who is facing an election in November, has taken a hard stance on immigration and jobs, with his war cry of “America First”.  

The executive order (EO) passed by Trump hasn’t helped either. Joel Yanovich, immigration attorney, Murthy Law Firm, said there was still a lot of confusion among employers about who it applied to.

“So far, we have not seen any employers actually deciding not to file a case based on it. But, since the EO is so recent, it’s possible we may run into that in the near future,” Yanovich added.

The pandemic has wrecked the economy and IT firms are anticipating a drop in business volumes. 

Though recovery is predicted from October, experts say it will be a year before the sector reaches the pre-COVID-19 level of growth.

With remote working becoming a norm, travel and visa dependency, in general, are likely to come down.

In its annual report, India's largest IT firm TCS said it was looking to reduced visa dependency and travel cost as it embraces remote working and increasing localisation in the US. 

Milind Lakkad, Chief Human Resources Officer, TCS, said in the annual report that with teams working from home, in-person interactions are now replaced with virtual collaboration and has made physical location irrelevant. This would mean that traveling to onsite locations, particularly for initial transitions and knowledge transfer, potentially reducing the visa dependency.

The company said that they would make work from home (WFH) permanent, where it expects 75 percent of its employees to WFH by 2025. 

(*name changed to protect identity)

Click here for our entire coverage of the H-1B issue

Swathi Moorthy
first published: Jun 25, 2020 07:15 pm