BENGALURU: The Donald Trump administration has proposed changes to the H-1B registration process, which could lead to more permits being given to those with US master’s degrees, impacting Indian IT firms that rely on the work visa to service clients in that market.
The US General Services Administration said in a note that it was looking at a modified selection process in tune with the ‘Buy American and Hire American’ policies of the US government in a rule that was first proposed in 2011 to improve the intake and selection process of H-1B petitions. The US Citizenship and Immigration Services (USCIS) is the agency mandated to issue visas to immigrants.
“This regulation…would increase the probability of the total number of petitions selected under the cap filed for H-1B beneficiaries who possess a master’s or higher degree from a US institution of higher education each fiscal year,” it said. The US offers 65,000 standard H-1B visas for skilled workers and an additional 20,000 visas for workers with a US master’s degree or higher.
Typically, the agency processes the master’s pool and then sends petitions that are left over to the general pool. “Under the proposed rule, USCIS would first put all applicants in the general 65,000-visa pool. If that cap were reached, any additional US advanced degree holders would be redirected to the 20,000-visa pool,” US political news site Politico reported, citing sources at the Department of Homeland Security. “The administration expects the change could lead to a 15% increase in H-1B visa holders with US advanced degrees.”
For Indian IT companies, which predominantly employ people with bachelor’s degrees, the move could reduce the number of visas that are available for those without the advanced degrees. Some companies are already facing margin challenges as a result of tighter visa rules that require them to hire US citizens and sub-contract work when they cannot hire quickly enough.
“Increase in our sub-contractorcost, on-site localisation and investment impacted the margins by 50 basis points,” Infosys told analysts after its second-quarter results. The company’s margin was flat even as the rupee weakened significantly, which generally results in higher margins.
The company said it expects its sub-contractor costs to remain elevated, until it could staff projects with its own employees. Last year, Infosys said it would hire 10,000 American workers by 2020.
Despite the issue of tighter visas, IT CEOs do not believe the Indian talent model will fade away soon. “The fact is that the sheer demand for talent and the supply for talent is going to be met from places like India because demand far outstrips supply in those markets. But we have to be cognisant of the politics of it, so we need to be broad-based,” TCS CEO Rajesh Gopinathan said in an interview last week. “But I don’t think the demand for Indian talent is going to be outdated anytime soon.”
The US has issued over 19.07million of the 34.7 million H-1B visas issued in the decade to 2017 to applicants with post-graduation qualifications, the USCIS disclosed on its site. It did not, however, disclose whether the applicants had advanced degrees from US universities.
During the same period, those with bachelor’s degrees got 15.43 million work permits. The Trump administration is also looking to terminate by end of this year an Obama administration plan that allowed spouses of H-1B visa holders to work in the US.
The National Association of Software and Services Companies (Nasscom) said the Trump administration had said last year that it would begin making these changes to the programme and that the industry lobby would only be able to comment once an actual change was made. “We have always maintained that changing regulatory issues relating to the employer-employee provision, or the wages would simply increase the costs to the US companies that use the services of the industry to innovate and grow,” said Nasscom vice-president Shivendra Singh.