On December 7, the Department of Homeland Security’s (DHS) tougher H1-B visa rule will come into effect. It would impact Indian techies and IT firms, which account for a larger share of the H-1B workforce.
That is why the recently concluded hearing for the lawsuit that challenges the rule is highly important. If the rule is blocked by the court, it could provide a major relief to the Indian diaspora there.
What are the rules?
On October 6, 2020, the Department of Labor (DOL) and DHS announced two rules that would make it difficult for companies to hire H-1B workers. They include increasing the wages and tightening the H-1B regulation.
While the wage hike rule came into effect on October 8, the DHS’ H-1B rule had a 60-day time period for comments, post which it would come into effect. That would be December 7.
All these would have a huge impact on Indian IT service providers and techies, who are one of the major beneficiaries of the visa. Indians account for about 1.3 lakh of the total 1.8 lakh H-1B visas issued in FY19.
IT executives in recent interactions with Moneycontrol had pointed out that wage hikes and tighter H-1B norms would impact them as they explore alternatives like offshoring (moving to low-cost locations like India), with remote working picking up and accelerating localisation drives.
Soon after the announcement, three lawsuits were filed in the US. Of the three, two were against the DOL’s wage hikes.
The third one, filed by the US Chamber of Commerce and other organisations and supported by US tech firms like Google and Amazon, had demanded both DOL and DHS H-1B rules be set aside. It was filed in the District Court of North California in October.
The judgement would cover both the rules. The hearing was held on November 23 and was heard by the District Court Judge Jeffrey S White.
Key themes in the hearing
Immigration attorneys Moneycontrol spoke to shared key themes that transpired during the hearing. It includes unemployment in the US and its connection to H-1B and the nature of implementation, especially wage hikes without notice and comment period.
The Trump administration, announcing the H-1B rule changes, had argued that the implementation was in a bid to protect American jobs at the back of COVID-19.
According to the DOL, current wage rates for H-1B workers are causing adverse effects on wages and job opportunities of US workers. The department is adjusting the wage levels to “reduce the dangers posed to… US workers’ wages and job opportunities,” it said in the policy document.
DHS, too, introduced stricter conditions that would make it difficult for firms to recruit H-1B workers.
Stuart Anderson, founder, National Foundation for Public Policy (NFAP), in a Forbes report, pointed out that computer-related fields where the majority of H-1B workers were deployed saw the least unemployment rate at 3.5 percent, compared to 7.8 percent in other fields, as of September 2020. Unemployment rate in computer-related fields was 3 percent in January 2020, and for non-computer related fields, it was 4.1 percent.
In addition, there were 6.5 lakh job openings that required Bachelor’s degrees and above, as of October 2020, a 4.7 percent increase compared to May 2020, noted a report submitted by the US agency that supports entrepreneurs and small businesses in America.
Two immigration attorneys, who are aware of the court proceeding, said the Trump administration’s response was lacking. One of them pointed out: “The arguments the government put forth were lacking evidence and when they did have evidence, it proved the opposite of what they were arguing.”
Unlike the DHS rule, DOL’s wage hikes were implemented immediately without notice and comment, making it vulnerable to litigation. Another immigration attorney pointed out: “The Trump administration’s arguments for implementing this rule at break-neck speed, and with no input from the public, is fairly weak.”
With the comment period ending, can one expect changes in the rules?
Unlikely. Though there was a 60-day comment period for the DHS H-1B rules, the probability of the current administration making changes is low, pointed out experts.
President Joe Biden could bring in an executive order to change it, but it might take a few months and might not be easy.
“If the USCIS H-1B rule does go into effect, I don’t think it will be watered down, at least not by this administration. They may be forced to make some changes to make it more consistent within itself, but I don’t think they will water down any of the impacts,” said Kellen Powell, an immigration attorney in the US.
So what are the possibilities?
“I believe there is a significant chance that the court will block the DOL rule. I also suspect the DHS rule will be blocked," said Joel Yanovich, immigration attorney, Murthy Law firm in the US.
"As with the DOL rule, it seems the real reason the administration was in such a rush to get these implemented is that it knew it would soon be on its way out,” he added.
Attorneys also pointed out that the judgement can be expected before the rule takes effect. Powell, an immigration attorney in the US quoted earlier, said: “I think we will get a decision from the court fairly quickly. The court will want to deal with the challenges before December 7."