UNITED STATES OF AMERICA WORK VISA: H1-B

• The US has blocked H1-B and certain other non-immigrant worker visas until the end of the year 2020.
• The US government has a cap of 85,000 total H-1B visas for each year.
• Of this, 65,000 H-1B visas are issued to highly skilled foreign workers, while the rest 20,000 can be additionally allotted to highly skilled foreign workers who have a higher education or masters degree from an American university.

WHAT ARE H-1B, H-2B, L AND OTHER WORK VISAS?

• H-1B: Person is Specialty Occupation: To work in a specialty occupation.
• Requires a higher education degree of its equivalent.
• Includes fashion models of distinguished merit and ability and government-to-government research and development, or co-production projects administered by the Department of Defence.

• L1: L1 visas which allows companies to transfer highly skilled workers to US for a period of up to seven years.

• H-2B: H-2B visas allow food and agricultural workers to seek employment in the US.

Why did the US suspend non-immigrant worker visas?

• Since it was started in 1952, the H-1 visa scheme has undergone many changes and revisions to allow or disallow certain categories of skilled workers in the US, depending on the economic situation of the country.
• The technology boom coupled with the arrival of the internet and low-cost computers in developing nations such as India and China saw a large number of graduates willing to work at relatively low costs in the US, a win-win situation for both the employer and the employee.
• However, it has since often been criticised for sending low cost workers to the US at the expense of domestic workers.

Who all does it impact?

• Since the ban is effective immediately, the processing of all new H-1B, H-2B, J, and L visa categories stand suspended.
• This means those who do not have a valid non-immigrant visa as of June 23, and are outside of the US, will not be allowed to enter the country until December 31. Workers in essential services in the food sector have been given some reprieve, and their entry shall be decided by the consular officer of immigration services.

• H-1B, H-2B, J and L visa holders, and their spouse or children already present in the US shall not be impacted by the new worker visa ban.

How does it impact Indian IT companies?

• This could result in a significant impact on margins and worker wages of Indian IT companies which send thousands of low-cost employees to work on client sites in the US.
• Though the large Indian IT companies have cut down their dependency on H-1B and other worker visas by hiring as much as 50 per cent of staff locally, they still rely on these visas to keep costs in check.
• Indian IT companies also offer subcontracts to Indian nationals already present in the US with valid H-1B visas.
• Bangalore-based Wipro spends as much as 20 per cent of its revenue to subcontract Indian workers with valid H-1B visas.

Sources: TH, IE