New H-1B visa bill by Darrell Issa will hurt Indian IT companies, Zoe Lofgren to introduce new bill

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Issa proposes $100,000 salary, plus Master’s degree or more to get H-1B visa.

AB Wire

NEW YORK: California Republican Congressman Darrell Issa’s new bill to curb ‘abuse’ in the H-1B visa system, if enacted, will impact those companies who have more than 50 employees based in the US, and is largely targeted at Indian IT companies like Infosys, Wipro, HCL Tech and TCS – and intended to stop erosion of jobs for Americans.

With the new bill having a provision for at least a Master’s degree, as recognized by the US, and a minimum salary of $100,000 cutting across jobs, to do away with the standard practice of having to show that there are no compatible or similarly qualified American citizens for the job, Indian IT companies who rely upon thousands of new employees every year from India with starting salaries in the mid five figures to take up outsourcing jobs on an H-1B visa, would be heavily impacted.

These Indian IT companies would be forced to hire locally, even take on fresh graduates out of college, but in all likelihood there will be still plenty of paucity of talent and starting wages would in all likelihood rise.

There is already panic setting in Indian IT circles: after the so called ‘Protect and Grow American Jobs Act,’ was re-introduced in the US Congress on Wednesday – which did not find favor in Congress last year – Indian IT stocks tumbled on Friday by as much as 4 per cent. The top four companies — TCS, Infosys, Wipro and HCL Tech — together lost over Rs 22,000 crore in market valuation.

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There is fear in India that this time around, under an administration run by Donald Trump, Issa’s bill would be passed in the House and Senate. However, there’s a long way to go for that, and the bill may change dramatically in its provisions as it runs it course to becoming law, if at all.

Last year, there was three times more for the total 85,000 H-1B visas up for grabs, including 20,000 for foreign graduates from American educational institutions, and like previous years, a lottery system decided who got it.

As CNN reported, existing law has a similar requirement that Issa has proposed, but sets the threshold at $60,000, a level established in 1998, and doesn’t apply to foreign workers with master’s degrees. Issa’s bill would do away with that exemption. And the salary would be raised to $100,000 minimum.

The idea is to make it more expensive and complicated for companies to use H-1B visas, and to hurt companies that exploit the program. Issa’s bill, like the current law, would apply only to companies with more than 50 employees and for whom H-1B workers make up at least 15% of the workforce.

The bill addresses Trump’s concerns about high-skilled immigration, says Neil Ruiz, a specialist in migration and economic development at George Washington University Law School, according to CNN.

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“This bill shows the direction of where they may go in immigration reform: Let people in — but make sure you’re protecting American workers and set the bar high,” he said.

Rep. Zoe Lofgren, image via

Rep. Zoe Lofgren, a Democrat who represents Silicon Valley, says Issa’s legislation is inadequate and won’t stop outsourcing.

“It’s just a fig leaf,” she told CNNMoney.

Lofgren has drafted a more comprehensive bill that would award visas by which employers offer the highest salaries. Under both the current system and Issa’s proposal, visas are awarded by lottery, even after companies go through all the paperwork.

“That would avoid this program undercutting the wages of American workers,” she said. “It lets the market forces work.”

Lofgren says she plans to introduce her bill within weeks. It will also propose changes to how permanent visas or Green Cards are awarded, eliminating limits allocated by country, on EB-2 and EB-3 visa categories. Lofgren believes that this will help clear up some of the high demand for H-1B visas, which she said is, in part, due to long wait lists in countries like India. H-1B visas are for three years and can be renewed for three more.

“Trump has said he’s against outsourcing. If he is, he can take a look at this bill that could actually work,” she said. “If he’s not serious, there’s nothing I can do about it.”

Calvin Moore, a spokesman for Issa, said his bill, originally introduced last year, is a good entry point for reform.

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“The point of the bill is to be a modest reform on the pieces of H-1B reform that we think have the most buy-in and that we think are most achievable early in the Congress,” he told CNNMoney.

Immigration lawyers are waiting to see whether changes will take effect before the upcoming H-1B season. The government begins accepting applications April 1.

Forbes criticized Issa’s bill, coming down hard on it, saying ‘attempting to eliminate profit is thus attempting to eliminate adding value. Which really just isn’t the point of economic policy at all, is it? Given that we can only consume value if it is created, rather the opposite in fact, we’d really like people to be creating as much value as possible.’

Forbes questioned: ‘…The idea behind a higher minimum income is to make sure that jobs we could get done for $60,000 must now cost a minimum of $100,000. And what’s the point of that? Why would we want to make it more expensive to produce things?’

Forbes added: ‘This is a seriously bad idea…Having fewer such engineers entering the US to work will just mean more of the work flowing outside the US to where the engineers are. Just not a sensible thing to be doing along any axis of consideration.’