IT firms to expand localisation drive as US proposes more work visa hurdles

Indian IT firms say workplace-independent model, local hiring will help them meet challenge

A remote working model and the efforts of the Indian IT services companies in the past years to increase their localisation drive, especially in the United States, are expected to keep these firms largely insulated from the series of immigration-related measures that the US is taking.

The US Department of State today proposed not to issue temporary business visas for H-1B speciality occupations. The visa was widely used by IT firms to depute technology professionals to the US for a brief period to execute jobs for clients onsite through B1 visas.

The proposal, if finalised, will eliminate any misconception that the “B-1 in lieu of H policy” provides an alternative avenue for foreign professionals to enter the US to perform skilled labour that allows, and potentially even encourages them and their employers, to circumvent the restrictions and requirements relating to the H non-immigrant classification established by the Congress to protect the US workers, the State Department said.

“The B-1 in lieu of H policy visa holders would be subject to independent review by US Customs and Border Protection at US ports of entry, which could include questioning on whether the foreign national will be paid the US prevailing wage,” said Fragomen, a New York-based immigration law services firm.

The new proposal follows a series of such initiatives that the US has taken in the past few weeks ahead of the presidential election. These including increasing the minimum wages for non-immigrant visa holders and also increasing the visa processing fees. 

One of the reasons why Indian IT firms feel largely insulated is that 60-70 per cent of their workforce in the US are either local hires or not dependent on visas. The companies have also shown signs of going aggressive on such hiring over the next few years.

Tata Consultancy Services (TCS), India’s largest IT firm, plans to hire 10,000 individuals in the next two years. This, along with location-independent work model (SBWS), will help the company mitigate the visa risks. “I’m not losing my sleep over it,” Milind Lakkad, chief human resource officer at TCS told Business Standard in an interview earlier. “The changes in the mindsets of our customers to have a location-independent delivery is also going to play a significant role going forward. It is a big change that has happened six months ago and now.”

Last month, Infosys also announced plans to hire 12,000 American workers over the next two years, bringing its hiring commitment in the country to 25,000 over five years.

HCL Technologies’ Chief Human Resource Officer V V Apparao called the recent changes to the US visa rules as not being “helpful” to the overall IT industry as it may lead to further talent crunch. “However, almost 70 per cent (of our workforce) is visa independent and the minimal wages rule would apply to only transfers and extensions. HCL Tech had only 500 such cases this year out of its 22,000-strong workforce in the US,” he added.

US President Donald Trump’s administration has been creating multiple roadblocks on the visa front in line with its anti-immigration stance.

Earlier this month, the Department of Labour (DOL) increased the minimum wages for H-1B, H-1B1, E-3 and I-140s types of visas in a move to encourage firms to employ local workers. A rule was also passed to tighten eligibility criteria for H1B visas. The move will result in at least 40 per cent increase in wages for top Indian IT service providers, according to Cato Institute’s study. 

The filing fees for H-1B high-skill visas was also increased by 21 per cent to $555, while that for L (intra-company transfer) visas has been increased by 75 per cent to $850. However, a US district court had provided preliminary injunction against the move being implemented.