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H1-B visa cut could haunt US businesses

The rollback in the maximum number of H1-B visas could come to haunt US businesses after economic recovery, say experts.

business Updated: Oct 14, 2003 13:14 IST

The rollback in the maximum number of H1-B visas that allow foreign workers to enter the US could come to haunt American businesses after economic recovery, say experts.

The number of new foreign workers allowed to enter the country will sharply decline in the coming year, as the US Congress has declined to renew a higher annual cap it set for the H1-B visa programme.

With unemployment at 6.1 per cent, the economy still shaky and immigration issues woefully unpopular since the terrorist attacks of 9/11, employers did not protest as the rollback went into effect as scheduled on October 1, the start of the federal fiscal year.

That inaction on the part of employers, however, could bode ill when economic recovery gains steam, some observers said, according to a report in the Chicago Times.

The H1-B visa, introduced at the height of the technology boom, allowed employers to hire foreign workers with special skills they can't find among American job applicants.

As the economy boomed during the late 1990s, fuelled by the IT industry, Congress raised the cap to 115,000 and eventually to 195,000 in 2000 at the request of the business community.

Now the annual limit on new H1-B visas has automatically rolled back to 65,000 -- a cap set in 1990.

Chicago Times quoted Mitchell Wexler, a California immigration law attorney, as saying "companies are going to start panicking after the first or second quarter of next year. Our clients are doing better, and what comes hand in hand are more visa applications. They should start lobbying now."

Eleanor Pelta, an employment law attorney in northern Virginia who represents employers, said demand for new H1-Bs outpaces the 65,000 cap.

As of the third quarter, 56,986 H1-B applications had been approved, according to the US Bureau of Citizenship and Immigration Services, part of the Department of Homeland Security. Fourth-quarter data were not available.

"The 65,000 is not going to be sufficient," Pelta said. "Congress is very reactive when it comes to immigration. By the time they look at an issue and make a decision, often the economic conditions have changed. That's what I'm concerned may happen here."

Mike Maginity, recruiter and partner for ProAlliance Corp, an IT consulting firm in Rolling Meadows, Chicago, says right now he's not worried.

The company has 36 employees; six were brought in on H1-B visas, including Kiran Patil, who was able to obtain his green card. But the firm hasn't hired any foreign workers in about two years.

Patil said he was somewhat sad to learn about the H1-B limits being imposed but understands why, the Times report said.

H1-B visas are renewable after three years for up to six years. Workers seeking a green card can get permission to continue working while their application is pending. The cap does not affect existing H1-B visa holders working in the US.

Even some large firms have put new visa applications on hold.

Convergys, a Cincinnati-based outsourcing firm with an office in Itasca, employs about 44,000 people, with an estimated 300 foreign workers in various stages of the immigration process, according to Ron Palmera, senior manager of recruiting.

Some are students holding F-1 visas who hope to transfer to an H1-B; others are waiting out the green card process, which can take several years.

Pro-labour groups called the rollback a victory. They had opposed expanding the H1-B programme, saying employers were using foreign visas to replace American workers with cheaper overseas labour.

First Published: Oct 14, 2003 13:14 IST