The fee hike is set to be implemented from October 2, 2020
The issue of H-1B visa remains a sore point for the Indian information technology industry. Little has changed in the attitude of the US towards H-1B visa workers despite President Donald Trump’s assurance to overhaul the system.
“The Indian firms are not well positioned to lobby the US government, further more they have for years been significantly under invested in US government relations particular in their ability to influence policy,” said Peter Bendor-Samuel, CEO of the Everest Group, in an email response earlier this month.
The H-1B work visas, essentially allow highly skilled foreign workers to travel to the US and have been at the centre of a storm since US President Donald Trump’s presidential campaign last year. His “Make America Great Again” slogan took off in a big way, and he often mentioned H-1B visa regime as one of the things he would want to change.
The over $155 billion Indian IT outsourcing industry has been a beneficiary of the H-1B visa programme, the most favoured route to send Indian engineers to the US. At the same time, the industry has been accused of misusing the current system to send more people to the US.
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India’s IT industry’s lack of inroads in the US government has not been a problem until recently, said Bendor-Samuel, because US high-tech industry drove the agenda and its needs align with the Indian IT firms.
“However, this alignment of interest has changed with the high tech firms believing that the Indian firms are taking too large a share of the H-1B pool. With the H-1B pool being restricted the high tech firms competing with the Indian firms for a limited resource. This has exposed the vulnerability of the Indian firms under-investment which they are now attempting to rectify,” he added.
There are several Bills in the US Congress related to the larger issue of immigration, out of which some deal with H-1B, some talk of outsourcing and some others are about immigration.
Last week, Suresh Prabhu, the Minister of Commerce and Industry, said the Indian government “very strongly” raised the issue of H-1B visas with the US, even as the US immigration agency recommended a tighter H-1B visa verification process.
Paul Triolo, the practice director, geotechnology (geocyber) at analysis and political risk consultancy Eurasia Group, said that while the bureaucracy has been scrutinizing H-1B applications more strictly, there hasn’t been much movement on the issue since the executive orders came into force.
Talking about the proposed changes to the current lottery-based system of H-1B visas, which includes considering the most highly paid and the most highly educated applicants, he said, “Such a step would allow the likes of Google to still retain top talent but would complicate the business models of Indian IT outsourcers that pay at or near the minimum salary required. As far as we know, there has been no concrete movement in this direction, at least not yet,” he told Moneycontrol in an email response.
What this means for the Indian IT workers on H-1B visas, is essentially being at the mercy of employers because guest workers in the US are tied to their American work visa sponsors.
“This is more evident with the elaborate employment bonds specific only to Indian IT firms from India that deploy their workers to the US,” said Rajiv Dabhadkar, founder at National Organization for Software & Technology Professionals.
“Because Indian guest workers do not complain about being underpaid, companies prefer them over local American workers,” he said.
One fall out of Trump’s executive order is most likely to be an increase in minimum wages, as Patrick Thibodeau at ComputerWorld wrote in an analysis of Trump’s executive orders in April. “Wages for the lowest-paid H-1B visa workers are almost certain to rise,” he had said at the time.
Analysts have for long said that a rise in minimum wage would hurt the labour arbitrage model of the Indian IT companies, but may just be the need of the hour to change perceptions for the better.
“The perception that Indian guest workers are low skilled arise mainly due to the fact that they get paid less by their visa sponsors. Wage discrimination, therefore, creates a divide and rule between the working class,” said Dabhadkar.
Indian IT firms have also been at pains to point out that they have ramped up local hiring in the US, and the industry body National Association of Software and Services Companies (Nasscom) has for long held that there is a STEM (science, technology, engineering and maths) skills gap in the US, which necessitates the transfer of skilled manpower from countries such as India.
“Beyond the immediate H-1B issue, a greater emphasis on points/education/technical skills/English ability in US immigration policy could result in greater numbers of Indian immigrants to the country. The current country quotas disadvantage applicants from highly populous countries like India ” noted Eurasia’s Triolo.