US H-1B bill to toughen rules moves ahead, next stop is House vote

The H-1B visa bill proposes a string of measures that is expected to affect Indian IT companies operating in the United States.

world Updated: Nov 16, 2017 18:08 IST
Yashwant Raj
Yashwant Raj
Hindustan Times, Washington
H-1B visa,Indians in US,US visa
President Donald Trump speaks to workers at the headquarters of tool manufacturer Snap-On on April 18, 2017 in Kenosha, Wisconsin. During the visit, Trump signed an executive order to try to bring jobs back to American workers and revamp the H-1B visa guest worker program. (AFP File Photo)

A committee of the House of Representatives on Wednesday approved a legislation for a vote by the larger body proposing rules to toughen the H-1B visa regime that could potentially affect Indian IT companies operating in the United States.

The Bill, moved by Republican lawmaker Darell Issa, proposes a string of measures that strike at the root of the business model followed by Indian IT companies, that are premised on wage differentials between amounts paid to foreigners on H-1B and local Americans.

However, the Bill, which Issa has claimed has the backing of US President Donald Trump, has a long way to go before it becomes the law of the land. It must first pass the House and then go through the same process in the Senate — passed by a committee before it is put to a vote before the full upper chamber. Then it goes to the president for his signature.

The bill seeks to make it more difficult for H-1B dependent companies — defined as companies with more than 15% of employees on H-1B — which practically account for most of Indian IT organisations operating in the US. The bill aims to raise this to 20%.

The Bill also proposes a 50% salary hike from the current base of $60,000 to $90,000, arguing that the minimum rate was fixed decades ago in a different time and context. This would hit the bottomline of Indian IT companies whose profits are premised on wage differentials.

Other clauses of the bill that could hit Indian companies include one that require some H-1B employers to give an undertaking that they will not displace a US worker during their entire employment, and not just 90 days before and after the filing of an H-1B petition. And allow the department of labour to conduct at least five random investigations of H-1B dependent employers annually.

The US allows American companies to hire 65,000 highly skilled foreign workers abroad and 20,000 from among foreign students enrolled in American schools and colleges. A large number of these visas go to Indian IT companies who are accused of using them to replace American workers.

Issa’s Bill is among several that have been moved in recent months given Trump’s avowed commitment to bring back businesses and jobs to the US. The President has given his support to some of them, but it’s not clear yet how, and in what shape, they will reach his table for his signature.

“Highly skilled individuals that come to America through the H-1B visa program add tremendous value to the US economy. We have a responsibility to ensure this important program isn’t being abused by employers to undercut American jobs,” Issa said in a statement.

“Unfortunately, loopholes in the program have allowed a small handful of employers to game the system to displace American workers and crowd out others who legitimately need the limited slots available to recruit individuals with unique skillsets not available here at home.”

First Published: Nov 16, 2017 13:06 IST