The burden of H1-B visas and its impact on India Inc

Trump’s contention has been that Indian companies have been passing off low-cost routine tasks as skilled jobs by misusing the H1-B quota. This is the genesis of the tough stand that the US government has taken.

Oct 19, 2018 11:10 IST India Infoline News Service

Ever since Donald Trump came to power, there has been a series of subtle attacks on the large Indian population that is working on US software projects. What exactly is an H1-B visa? It is a visa granted by the US for initial employment in the US as part of global projects.
 
It has been observed in the past that the largest contingent of H1-B visa holders in any year is from India. Consider these numbers. For the year ended September 2017, Indians accounted for 63% of all H1-B visas issued, while the next largest contingent came from China which accounted for 14% of the H1B visas issued. Trump’s contention has been that Indian companies have been passing off low-cost routine tasks as skilled jobs by misusing the H1-B quota. This is the genesis of the tough stand that the US government has taken.
 
H1-B visas, spouses, and H4 visas
The spouses' program received a fillip during the Obama regime when spouses of H1B visa holders were permitted to remain in the US with an H4 visa and also work in the US with the H4 Employment Authorization Document (EAD). Under the old laws, a worker from outside could remain in the US for 6 years with an H1-B visa, which would be for an initial period of 3 years and extendable for another 3 years. In fact, a person with a pending residence application got an H1-B visa extension for an indefinite period until the Green Card was issued.

Under the new system, the H1-B visa holder will have to exit the US until the processing of the Green Card and can return to the US only after that. This is likely to impact thousands of Indians who work in the US after the expiry of their H1-B visas and await the issuance of their Green Card.
 
Further, the issuance of fresh H1-B visas or an H1-B extension has also been tightened. Under the new policy, effective Sep 11, 2018, US Citizenship and Immigration Services (USCIS) agents can deny applications deemed incomplete or erroneous, without first warning the applicants and allowing them to correct the error. This has caused heightened uncertainty among tech players, both Indian and American.
 
Why are H4 and H1-B visa holders worried?
In June 2018, the Donald Trump administration deferred a decision on H4 visa-holders’ “right to work” in the US for the second time. Originally, it was supposed to announce a decision in March, which did not happen. This absence of decision leaves H1-B spouses, which include thousands of immigrant workers in the US, in extreme uncertainty.
 
Remember, that the H4 is a dependent visa category used by spouses of those holding the much sought-after H-1B long-term work visa. Indians account for 63% of the H1-B visas and nearly 80% of the H4 visas. Therefore, an outsized impact of this delay or a potential decision of canceling the H4 visa will be on Indians.
 
Typically, it is women who account for ~90% of the over 100,000 H4 visas issued annually. For a long time, spouses of H-1B holders could not work in the US or even get a social security number. This left many highly qualified women, who’d left behind established careers in India, doing nothing in the US.
 
Obama sought to change this in 2015 when he allowed H4 visa-holders for the spouses of those who were awaiting green card approval to seek work permits themselves. However, the relief seems short-lived. Since Trump took power in January 2017, he has been considering scrapping the visa, as it was part of his original election manifesto.
 
Further, students who take hefty loans for studying in the US will also find it difficult to get the work visa owing to the recently amended rules, which are quite “grey” and can lead to unforeseen consequences for the smallest of errors in the application.
 
What will be the implications of this move?

Apart from impacting the families involved, it is also going to hurt the Indian IT companies that are sponsoring Indian workers abroad. Here are some likely implications:
  1. The delay in the decision regarding H4’s future is bad enough and will hurt many families who will be forced to survive on a single income. In fact, US senators have already argued that allowing one spouse to work and the other to not work is prima facie unfair.
  2. This move rests on the assumption that immigrants are taking jobs rather than being valued and protected for their immense contributions to this nation, which may be an erroneous perception. Even large US companies such as Apple, Amazon, and Google have confirmed the major contribution of immigrant workers.
  3. The delay regarding the H4 decision has strong political support at the grassroots level. The H4 visas have been challenged in a court filing by the “Save Jobs USA versus Department of Homeland Security (DHS)” which has challenged the H4 EAD almost from 2015. The petitioners have pushed harder after the Trump government came to power.
  4. This move is likely to hit Indian families in the US, the economics of their continuance in the US as well as the project costs of Indian companies like TCS, Infosys, and Wipro that rely on this group to get their projects executed.
 
What is interesting is that even as the visa challenges first started in late 2016, companies like Infosys, TCS, and Wipro are already preparing themselves on two fronts. Firstly, they are increasing their US local hires so that the social and political aspects of immigration are better handled.

Secondly, IT companies are also gradually working towards an on-shoring model, as opposed to the client off-shoring model being followed now. This will position India as the hub for software development, which should not be too difficult with the rampant spread of cloud computing. Of course, there is going to be a short-term impact, but that can be negotiated rather than addressed.
 
Recently, on October 18, 2019, media reports claimed the Department of Homeland Security (DHS) under the Donald Trump administration planning to “revise the definition of speciality occupations under H1B visas" in his Fall 2019 (August) agenda. 

It remains to be seen when the Department of Homeland Security (DHS) will publish the notice to amend the 2015 final rule and whether it will really scrap all H4 EADs. As of now, it just seems to be a matter of 'when'. As worried H1-B and H4 visa-holders, their spouses, and students seeking work wait with baited breath, the uncertainty of it all is only making things worse.

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