As part of an agreement, US agencies will share more information with each other to facilitate fraud detection.
A recent move by the United States government to protect US workers from fraud will likely result in increased oversight and scrutiny of Indian technology services firms, according to Nasscom.
On May 12, the US Citizenship and Immigration Services (USCIS), the agency that oversees legal immigration in the country, formalised a memorandum of understanding with the Department of Justice to expand their collaboration "to better detect and eliminate fraud, abuse, and discrimination by employers bringing foreign visa workers to the United States".
As part of the agreement, US agencies will share more information with each other to facilitate fraud detection.
This also includes dedicated tip lines for reporting H-1B and H-2B visa fraud, and abuse, and expanded its site visit programs.
This means the H-1B visa, which is most commonly used by Indian technology professionals to work at client sites in the US, will come under greater scrutiny.
“In the spirit of President Trump’s Executive Order on Buy American and Hire American, today’s partnership adds to the Civil Rights Division’s tools to stop employers from discriminating against US workers by favoring foreign visa workers,” said Acting Assistant Attorney General John M Gore of the Civil Rights Division in a note from the USCIS late on Friday.
The H-1B visa has been the preferred visa for Indian IT companies, which has helped them keep costs down and gain a margin advantage over multi-national players by sending its engineers to the US.
However, IT services firms have been accused of misusing the lottery-based system, which allows for 65,000 visas for the general category and a further 20,000 to those with a US Master’s degree from an accredited institution.
"The major Indian and India-centric IT services companies abide by all of the rules and regulations governing high-skill worker visas," said Shivendra Singh, Vice President, Global Trade Development at IT industry body National Association of Software and Services and Companies.
He added the new move by USCIS and DOJ will increase oversight and scrutiny.
"Like all sponsors of high-skilled workers on H-1B visas, Nasscom member companies are subject to hundreds of requests for evidence (RFEs) and site inspections per year and comply with the due process of law. Nasscom supports efforts to combat any violation of the law. As USCIS reports have found, willful violators have normally been those relatively small US companies with 50 or fewer employees – not the mid-size or large multinationals, and not any NASSCOM member company," said Singh.
Indian IT companies have upped their hiring in the US market, which is weighing on margins, but they have largely figured they can no longer rely solely on H-1B visas for transfer of skilled labour."But these increased bureaucratic burdens won't affect the underlying market demand for skilled labour and transformative solutions that Nasscom member companies deliver to their customers in the US and around the world," said Singh.