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The changes will prevent a significant number of talented professionals from taking involuntary breaks from their careers while also adding to the pool of resources in the US.
Indian IT companies are among the largest beneficiaries of H-1B visas and the move has been hailed by industry as scores of Indians will be positively impacted.
The announcement comes just a month after the visit of US President Barack Obama to India. Though the proposal had been in the works for a year now, directions to implement it were given as part of the immigration executive actions announced by Obama in November last year.
“Allowing the spouses of these visa holders to legally work in the United States makes perfect sense," said León Rodríguez, director, US Citizenship and Immigration Services.
“It helps US businesses keep their highly skilled workers by increasing the chances these workers will choose to stay in this country during the transition from temporary workers to permanent residents. It also provides more economic stability and better quality of life for the affected families," he added.
However, the amendments will not apply to spouses of all H-1B workers. Under the new rule, the work permits will be extended to only those H-1B workers who have applied for a lawful permanent resident (LPR) status or a green card. According to rough estimates, of the 65,000 H-1B visas granted each year, Indian companies have secured around 30,000 in the last two years. The figure for the last five years is between 15,000 and 20,000 visas.
However, only between 1 and 2 per cent of such workers apply for a green card, therefore limiting the impact of the policy. It is still a huge positive for workers awaiting their green card, which can take anywhere between seven and 12 years to be granted.
“While it is surely positive, it has a relatively smaller impact," said Gagan Sabharwal, director at IT industry body Nasscom. Sabharwal added that in the case of L-1 visa holders, their spouses get automatic work permits but this is not the case of H-1B and the amendment has not changed much since only very senior employees apply for the green card. "Officially, this move makes workers more productive, takes away the social stress, stigma and the opportunity cost but it could have had a wider impact if it was given as a blanket visa provision for H-1B," added Sabharwal. He added, however, that the move goes well with America's agenda to stop highly talented professionals from leaving their shores. According to USCIS, the change could apply to more than 179,000 people in the next year, and 55,000 in subsequent years.
"Indian IT vendors are unlikely to be materially impacted by this announcement, but it is still mildly positive for them. Although it is hard to estimate what proportion of H-4 dependants (spouses of H-1B) will qualify as labour pool for IT companies, the increase in the labour pool, if any, is a positive," said Parag Gupta and Gaurav Rateria of Morgan Stanley in a note. A senior official of one of India's top five IT firms said it is more attractive from the employees' standpoint, and a step in the right direction. However, the long-pending demand of the industry to raise the H-1B visa quota continues to be unmet.
He added that there is a shortage of talent in the US and that's why most of the US-based global companies have been demanding an increase in the visa cap. The guidelines on the eligibility criteria of L-1 visas - which are also used by Indians in a large number - and are also expected soon, is another area of concern for the industry.
Shivendra Singh, VP, global trade development, Nasscom, said work permits for H-1B holders is a "very welcome move" as it principally recognises the skilled workers' contribution to the US economy but as an industry body they are awaiting guidance on L-1B visas.
"Clarification or any details on this will have a much higher impact on the Indian IT services industry," he added. As part of the executive action, the US president had promised to streamline the L-1 visa process for foreign workers. According to Nasscom, the rejection rate in the L-1 category remains as high as 40 per cent.
In November, Obama used his executive powers to hand out four million unauthorised immigrants a new legal status that would defer their deportations and allow them to work legally. He also proposed several fixes to the "broken" immigration regime of the US. These measures are expected to liberalise the visa norms for foreign students, professionals and entrepreneurs, especially those working in the technology sectors. The US government expects 400,000 highly-skilled workers to be eligible for visas once these reforms are implemented.
Obama had also recognised the fact that the process for giving green cards (US citizenship) needed a significant overhaul. Directions had been given to hasten the processing of green cards for skilled individuals, apart from allowing seekers to change employers while they wait for approval. All these measures were hailed as positives for the large number of Indians working in the US. However, it remains to be seen how many of the orders are actually operationalised since the legality of the executive action is being questioned.
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