Setback for TCS, Infosys, Wipro, other IT companies? Donald Trump Govt introduces H-1B Bill

In what can be a setback for Indian IT companies such as Tata Consultancy Services (TCS), Infosys, Wipro, etc, the H1-B bill is introduced in the US House of Representatives.

One of the key features of the bill is more than doubling the minimum salary of H-1B visa holders to USD 130,000, which can be difficult for Indian IT market.

Following the tabling of the bill in America, IT stocks plunged.

The High-Skilled Integrity and Fairness Act of 2017 introduced by California Congressman Zoe Lofgren prioritises market based allocation of visas to those companies willing to pay 200 per cent of a wage calculated by survey, eliminates the category of lowest pay, and raises the salary level at which H-1B dependent employer are exempt from non displacement and recruitment attestation requirements to greater than USD 130,000.

This is more than double of the current H-1B minimum wage of USD 60,000 which was established in 1989 and since then has remained unchanged.

"My legislation refocuses the H-1B programme to its original intent - to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them," said Lofgren.

"It offers a market-based solution that gives priority to those companies willing to pay the most. This ensures American employers have access to the talent they need, while removing incentives for companies to undercut American wages and outsource jobs," he said.

Lofgren said it removes the 'per country' cap for employment based immigrant visas so that all workers are treated more fairly and to move to a system where employers hire the most skilled workers without regard to national origin.

It raises the salary level at which H-1B dependent employer are exempt from attestation requirements to a new required wage level of 35 percentile points above the median national annual wage for Computer and Mathematical Occupations published by the Department of Labour Occupational Employment Statistics (roughly USD132,000), which would be adjusted in the future without the need for new legislation, and eliminates the Master's Degree exemption for dependent employers.

The legislation sets aside 20 per cent of the annually allocated H-1B visas for small and start-up employers (50 or fewer employers) to ensure small businesses have an opportunity to compete for high-skilled workers, while still protecting against outsourcing.

It among other things removes visa hurdles for students and other temporary visa holders by building a bridge from F-1 student status to Lawful Permanent Residence and removes paperwork burdens by streamlining H-1B filing requirements and reducing administrative costs.

The legislation tightens employee protection by stipulating that employers may not reduce beneficiary wages, regardless of whether the deduction is in accordance with a voluntary authorisation by the employee.

It makes exceptions for taxes, garnishments, and deductions that are reasonable and customary in the occupation.

In related development, Senator Sherrod Brown has announced to introduce H-1B and L-1 Visa Reform Act in the Senate which he said would close loopholes in the H-1B and L-1 visa programs and provide increased protections for both American workers and visa holders.

"We need to crack down on the fraud and abuse that allows corporations to avoid paying Americans fair wages and exploit foreign workers," said Brown.

"During his campaign, President Trump promised to increase oversight of our H-1B and L-1 visa programs and reform starts with this bipartisan legislation to ensure that American businesses are giving American workers a fair shot at good-paying jobs," he said.

The bill would require that employers first offer a vacant position to an equally or better qualified American worker before seeking an H-1B or L-1 visa holder.

It would also establish wage requirements for L-1 workers and improve H-1B wage requirements to encourage companies to hire qualified American workers and prevent them from using foreign workers as a source of cheap labour.

Under the H-1B and L-1 Visa Reform, the Department of Labor (DOL) and the Department of Homeland Security (DHS) would have additional oversight authority to investigate fraud and abuse as well as to increase penalties for companies that violate the bill's requirements.

The bill also requires DOL and DHS to share information so that visa petitions are effectively scrutinised.