The H1B, L-1 visa legislation, which has been introduced by Senators Chuck Grassley and Dick Durbin in the US Senate, if passed, will prevent Indian IT companies from hiring H-1B and L-1 workers if more than 50 per cent of their employees hold these visas.
Most Indian IT firms with US operations, according to software body Nasscom, would be covered by this legislation since they do have many American workers on their rolls. The US accounts for anywhere between 40 per cent and 60 per cent revenue of most IT firms.
The Indian IT industry believes the legislation discrimates against Indian IT companies. Nasscom President Som Mittal says: “Several provisions of this Bill are against the principles of free trade and are creating trade barriers. In many ways, it (the legislation) is targeting Indian companies and restricts their ability to compete in the US market. This is also against (US) President Obama’s stand against protectionism at the G20 summit.”
Both H-1B and L-1 are non-immigrant visas. H-1B allows US employers to temporarily employ foreign workers in specialty occupations like architecture, engineering, mathematics, physical sciences, social sciences and biotechnology. Employees must be graduates (except fashion models). An L-1 visa, which is easier to get, is valid for a relatively short time — generally three years. It is available to employees of a company with offices in both the home country and the US.
Around 25 per cent of Indian IT firms are estimated to have the L1 Blanket Programme, which allows large firms to transfer their executives, managers, and specialised-knowledge professionals to the US, without undergoing the lengthy processing periods for regular L1 petitions. As for H-1B visas, Nasscom states that “contrary to popular belief of Indian companies taking majority of these visas, the Indian IT industry comprises only 11 per cent of the total visas issued in 2008”.
Among Indian IT companies, Infosys is the largest user of H-1B visas, followed by Wipro and TCS. Infosys has around 4,000 H1-B visa holders, while Wipro has close to 3,000 H1-B visa holders. TCS has more L-1 visa users than H-1B visas. The company is estimated to have about 3,500 H-1B and L-1 visa holders. Before the Satyam scam, the company had about 2,000 H-1B visa holders. Among MNCs, Microsoft and IBM are the two big users of H-1B visas for Indian employees.
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The Senators introduced this new legislation to “root out fraud and abuse and ensure that Americans are given every consideration when applying for jobs. “In tough economic times like we’re seeing, it’s even more important that we do everything possible to see that Americans are given consideration when applying for jobs. If there aren’t qualified Americans, companies can use the legal immigration programmes we have available, but we must return the H-1B and L-1 visa programmes back to their original intent,” Grassley said in a statement.
Moreover, in October 2008, the US Citizenship and Immigration Services (USCIS) released a Benefit Fraud and Compliance Assessment, indicating there was more than a 20 per cent violation rate by those who used the H-1B visa programme.
Indian IT firms think otherwise. Pratik Kumar, executive vice-president (Human Resources), Wipro, says: “We have always complied with the laws of the land in countries we operate, and immigration is no exception. The proposed H-1B visa legislation is an antithesis to globalisation. It is a restrictive trade practice. Over the years, India has helped the US compete globally and this has brought benefits to both the countries. A reversal of this could impact US economy adversely.”
Deputy Chairman & MD of Zensar Technologies concurs: “The legislation discriminates against Indian companies. Moreover, it’s just not true that Indian IT firms abuse the system. This year, in fact, H-1B visas have not been fully subscribed to as yet. We believe IT firms use these visas for genuine purposes.” Mohandas Pai, member of the Infosys Technologies board, said: “We have seen the press release but would need to look at the actual legislation to understand the terms and conditions. As such, we need to study this matter further.”
The premise that H-1B visa is used to displace American workers is misplaced, asserts Nasscom’s Mittal. He says Indian companies had been allocated only 12,000 visas in 2008 out of the total limit of 85,000. The latest data from the USCIS reveal that in April 2009 till date, H-1B visa applications it has received is approximately half the cap for FY10. This clearly demonstrates, says Mittal, that companies are not using the H-1B visa route to replace US workers with lower-cost foreign talent. The US does not have a temporary service visa as in other countries and companies that do send highly skilled engineers on H-1B visas are for temporary period with average stay in US of less than two years.
Nasscom, says Mittal, will continue to provide perspectives to the relevant lawmakers on the significant negative impact these unfair trade practices can have on the India-US trade partnership.
The H-1B visa cap was 195,000 in the year 2002, which was gradually reduced to 65,000 last year. This year, however, only 40,000 H-1B visa applications have been received so far, against the available limit of 65,000.
Meanwhile, Commerce Minister Kamal Nath said the US senators’ move would restrict the ability of Indian IT companies to compete in the US marketplace. “This is certainly not in line with the US president’s stand against protectionism at the recent G-20 meeting and our desire to mainstream development in the Doha negotiations,” he said.