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Times Of India Article On US Immigration Bill Mentioned INSZoom

Posted by: INSZoom | Date: April 17, 2013

US immigration bill may change outsourcing biz

Mini Joseph Tejaswi & Shilpa Phadnis TNN

Bangalore: The formal release of the US Comprehensive Immigration Bill has been delayed on account of the Boston blasts, but elements of it that have came out in various media indicate that Indian IT companies may have to bear significant new costs and be compelled to hire more people locally. Some say it could change the outsourcing model itself in important ways.

While the Bill increases the quota of H-1B visas for highskilled, foreign workers from 65,000 to 1,10,000, most of the benefit of that will likely go to American technology companies such as Microsoft, Google, Apple and Intel. Most Indian IT companies have more than 50% of their local employees on H-1B visas, and the bill increases costs for them and places restrictions on these companies’ ability to increase the H-1B numbers. “It’s a regressive move for Indian IT firms, pushing up their costs substantially and making it unattractive to send Indian talent overseas,” said Rakesh Prabhu, partner (immigration practice) in ALMT Legal.

Online publication Politico said that companies that get 30% or more of their workforce from H-1B visa holders would have to pay new fees. It said that starting from fiscal 2014, companies with more than 75% of their workforce made up of H-1B visa holders would be banned from bringing in any additional workers. In 2015, that number would go down to 65%, and in 2016 to 50%.

Earlier, The Washington Post had said that those with more than 50% of employees using the visas could face both new wage requirements and new limits on the number of the visas they can use for employees. Some expect visa fees to increase from $3,000 to $5,000. Businesses would also need to advertise to American workers first any job openings that could be obtained by foreign applicants.

Som Mittal, president of IT industry body Nasscom, welcomed the move to increase the H-1B visa quota, but said the conditions on higher wages and higher visa fees were discriminatory as it would be applicable largely to Indian companies.Anuj Sarin, director (best practices – immigration), at INZoom, a Californiabased immigration compliance consulting firm, said, “It’s bad news for customer companies in the US as well as their technology partners. Eventually, project executions will be challenged.”

However, Sajai Singh, partner and IT expert at law firm J Sagar Associates, said it was too early for the industry to get into any paranoia.

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