New bill may make it hard for companies to sponsor workers on H-1B visas

Immigration bill likely to be unveiled on Tuesday.

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By Sujeet Rajan

WASHINGTON, DC: With the “Gang of Eight” Senators expected to unveil the eagerly awaited immigration reform bill on Tuesday, some details that are emerging slowly — leaked by staff members of the Senators and through opinion of lobbyists who are more in the know how — suggest that it may require companies that hire H-1B workers to comply with complex logistics going ahead with the recruitment of foreign workers in the United States.

One of the big hurdles to the eventual passing of the bill is likely lack of consensus from powerful business groups who have big ticket lobbyists on Capitol Hill, if some reports are to be believed. If the deal collapses because of lack of bipartisanship, it’s likely not going to be brought back to the table anytime soon, so the stakes are high for a one shot go at it.

One of the likely fights will be on the H-1B front, with several news reports suggesting that the business and tech industry is not going to be satisfied with the hike in the number of visas when the bill is unveiled on Tuesday; that it may be short of expectations. At present the H-1B is limited to a total of 85,000 visas every year, including 20,000 for foreign graduates of American universities.

Several tech lobbyists said they think the Senate Gang of Eight’s plan won’t increase the number of H-1B visas by nearly enough, reported Politico, with one unidentified lobbyist being quoted as saying: “Tech companies have been the primary driver of reinforcing the need for immigration reform, and now, it looks like their concerns are totally being thrown overboard.”

But the H-1B numbers game has seen vociferous debate over the years, and most agree that it should increase or decrease according to demand. Of late, over the past few years, the need for tech workers has increased globally, and it’s a common lament that not enough skilled workers are to be found in the US.

But even if the numbers are hammered down to satisfy most critics, certain other provisions of the bill may be equally if not more contentious for most companies, including news that the Gang of Eight have arrived at a formula that will not allow companies to displace an American worker in the same region and occupation unless the entire number of American workers in that occupation has remained the same or increased.

So essentially, even as the country is preparing for an immigration overhaul with an emphasis on globalization, allowing more qualified immigrants to work here and making life easier for them to get permanent residency, it is at the same time becoming protectionist and even racist by trying to dictate what jobs these new immigrants may be entitled to, and the number of jobs they would eventually be qualified for in a private company, somewhat similar to the reservation system in government offices in India.

Another big impact rule may be the hike in visa fees for applying for an H-1B worker, which is going to adversely impact the bottom line of companies like Infosys, TCS and Wipro.

But perhaps the biggest financial worry for tech firms may be a rule that requires companies that have 30 percent of their workforce in foreign workers to pay a higher wage and those that employ 50 percent of their workers by the visa holders, an even higher wage.

So, the question that is now slowly beginning to emerge is what is going to happen to existing workers who are on H-1B visas? Obviously, the companies would have to give most a big hike in salary and bonuses to come up to levels that the new bill would require, and another question to be asked is, in the new scenario, how willing would some of the big tech companies like Google, Yahoo! and Accenture be to keep bringing in foreign tech workers when the cheaper option would be to train local talent according to company requirements, and hire from universities within the US.

Also, would the big Indian tech companies find it feasible to keep bringing in thousands of workers from India to shore up demand in the new scenario where they have to pay higher wages?

In a likely era where restrictions on job movements are loosened considerably, and increased expediency in Green Card procedures, Indian companies especially are going to ruminate on likely higher attrition rates, with possibilities of workers from India jumping ship to companies that offer them more money and incentives once they reach here on a visa and gain experience. The question for such companies is, would it be worth it?

Even before the exodus has started, though, some critics have already started to press the panic button on the immigrant numbers issue.

The Los Angeles Times pointed out that the US admits about one million legal immigrants per year, more than any other country, but that number could jump by more than 50% over the next decade under the new bill. After the Immigration Act of 1990, the number of legal immigrants increased by 40%, from about 500,000 per year to more than 700,000.

Even as members of the Gang of Eight have exulted over details of the bill, opponents such as Sen. Jeff Sessions (R-Ala.), a critic of increasing immigration levels, say new workers would depress wages and crowd out Americans looking for work during a time of persistently high unemployment.

“The masters of the universe in glass towers and suites, they may not be impacted by this, but millions of struggling American families will,” Sessions said in an interview. “We do need to be sure we aren’t exacerbating unemployment and wage erosion in America.”

Some other details of the bill are surely going to be even more controversial than the H-1B numbers game and the issue of wages to visa holders, including limiting the number of family reunification visas, removing the age-old provision of sponsoring siblings.

However, one thing that would please immigration advocates would be the provision to allow lawful permanent residents to sponsor spouses and minor children for Green Cards. Currently, only U.S. citizens can do that. That change could bring in an additional 800,000 people over the next 10 years, Senate aides said, according to the Los Angeles Times.

And if ABC News is to be believed, the likely bill to be unveiled on Tuesday is going to be 1,500 pages long and Senators will have less than a day to peruse it before the only one scheduled hearing to debate its pros and cons. The only witness for that hearing is Department of Homeland Security Secretary Janet Napolitano, who would also get less than a day to read it though before testifying.

To contact the editor, e-mail: sujeetrajan@americanbazaaronline.com

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