Expecting further restrictions on H-1B workers, many are deciding not to visit India.
The Trump administration has been giving surprises from the day one. The Indian IT companies have been anxious from the past several months due to concerns over the proposed restrictions in the H-1B visa program.
Though, there was a wee bit ease among the IT firms in March after the Trump administration faced a major setback in getting their much-hyped travel ban in place, but hopes were soon dashed as two executive orders did find way to execution. When the US government announced early this week that it has made some major changes in the H-1B guidelines, it was a moment of disillusionment for the Indian IT companies who were expecting some respite.
The new guidelines introduced by the Trump administration will make the Indian IT companies spend more money on hiring US nationals for the entry-level computer programming (Level 1) jobs. At the end of the day, the hiring companies will bear more financial burden on H-1B workers that would eventually hurt their growth rate.
The new circular of United States Citizenship and Immigration Services (USCIS) has closed the doors for Indian IT firms to bring low-salaried, entry-level computer programmers on H-1B visas, which are meant for professional with specialty skills. According to the USCIS memorandum, no entry-level programmer will be considered as a candidate with specialty skill. In other words, entry level programmer are now bared from H-1B program.
Indian IT companies have been saying that they have been consciously bringing down the number of visa applications and more so, the application of entry-level programmers. But the data released by analytical firm Nomura Research gives a different perspective than that of IT companies. According to Nomura figures, 40-60 percent of the total Labor Condition Application (LCA) filed by Indian IT firms during October 2015 – September 2016 were all for entry level programmers.
The chart also lists Wipro as the top Indian IT firm that applied for LCA for entry-level programmers with Cognizant and Tech Mahindra to follow.
When it comes to the LCA application filed for Level 2 employees, Tata Consultancy Services (TCS) tops the list by a huge margin when compared to other Indian tech giants. In the case of Level 3 programmers, HCL and Infosys are positioned on the top. According to Foreign Labor Certification (FLC) data, Level 3 salaries are considered to be average although 78-93 percent of visa applications of Indian companies were in the Level 1 and Level 2 categories.
With USICS bringing in the new guidelines, the Indian IT companies will have to incur extra financial burden as each level implies an additional cost as the wage slab increases by 20-25 percent.
With Indian IT Firms forced to hire entry-level programmers from the US market, it will lose its flexibility to call back an employee at the completion of a project. This also means that the IT companies will have a fewer number of on-site employees in the US. If the companies are forced to cut the number of on-site employees this could mean additional cost on on-site services.
Recently, the USCIS said it was temporarily suspending the facility for premium processing of H-1B petitions. Adding to this, a few congressmen have come forward with bills aimed at ending H-1B visa abuse.
The Trump administration’s move to further control the use of H-1B visa will have serious implications on the outsourcing industry as the clients will start to lose confidence in the companies. These firms might seek the service of other companies that employ less H-1B employees or they might even go for an in-house employee instead of outsourcing.
Since the announcement of the new guidelines, worked out by the Trump administration last week, social media has gone abuzz with Indian H-1B aspirants letting their emotions lose as uncertainty looms over their career.
There are also reports that a few H-1B visa holders who were denied renewals have requested their companies to fire them as this would give them an opportunity to stay in the US for another 60 days – a grace period for them to search for another sponsor.
There is also a possibility that the Indian IT firms will now engage in a mass designation change procedure to make at least a few of their Level 1 H-1B employees eligible to work in the US under the new guidelines.
Expecting further restrictions on H-1B workers, many are deciding not to visit India as they fear they might be denied reentry.