The H1B, L-visa legistation which has been introduced by Senators Chuck Grassley and Dick Durbin in the US Senate, if passed, will prevent Indian IT companies from hiring additional H-1B and L-1 guest-workers if more than 50 per cent of their employees hold these visas.
The Indian IT industry, however, opines that the legislation discrimates against Indian IT firms. Som Mittal, President of software body Nasscom, said: “The stated objective of the bill is to prevent fraud and visa abuse. However, several of the provisions of this bill are against the principles of free trade and are creating trade barriers. In many ways, it is targeting Indian companies and restricts their ability to compete in the US marketplace. This is also against President Obama’s stand against protectionism at the G20 summit.”
Both H-1 B 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 for fashion models).
An L-1 visa, which is easier to get, is valid for a relatively short amount of time -- generally three years. It is available to employees of a company with offices in both a 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.
The Senators introduced this new legislation with the aim of helping them in "rooting out fraud and abuse and ensuring 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 every 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-visa programmes back to their original intent," Grassley asserted in a statement.
In October 2008, the U S 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 use the H-1B visa programme.
Deputy Chairman & MD of Zensar Technologies (also former Chairman of software body Nasscom), counters this claim: "The legislation discriminates against Indian companies. Moreover, it's just not true that Indian IT firms abuse the system. This year, in fact, the H1-B visas have not been fully subscribed to as yet. We believe IT firms use these visas for genuine purposes."
The premise that H-1B visa is used to displace American workers is misplaced, concurs Mittal. As per an analysis of the H-1B visas issued last year, Indian companies had been allocated only 12,000 visas in 2008, out of the total limit of 85,000 visas.
The latest data from USCIS shows that in April 2009 till date, it has received approximately half the H-1 B visa applications against the cap for FY10. This clearly demonstrates that companies are not using the H-1 B Visa route to replace US workers with lower-cost foreign talent. 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 law makers on the significant negative impact these unfair trade practices can have on the India-US trade partnership.