New Bill Could Affect IT Industry in India
The Issa Bill which was introduced by the Republican Congressman Darrell Issa to stop abuses of the H1-B visa system is discriminatory against India, claims the Indian IT sector.
The legislation proposed will change the current system, whereby if a prospective H1-B employee has a Master’s degree or will be paid $60,000 per annum; the costly paperwork is greatly reduced. The new bill will increase the pay threshold to $100,000 a year and will take away the Master’s exemption.
This bill is to make it harder for foreign companies to bring in workers at a lower salary than their American counterparts and comes from the background of the American presidential campaign where issues about immigrants replacing American workers has been contentious.
As Indian companies, mainly IT firms are the recipient of 70% of the H1-B visas, this legislation is being seen as discriminatory towards Indian firms. Currently, a firm is viewed as being H1-B dependent if there are over 50 employees working full time, with at least 15% of them working on H1-B visas.
A planned meeting of the US-India Trade Policy Forum in New Delhi will more than likely discuss the repercussions of this new bill for Indian IT firms, as it will add increased costs to firms that hire skilled foreign workers on a temporary basis.
Nasscom, the Indian IT sector and the US-India Business Council are opposing the proposed bill, which still has to be passed through Congress. In addition, India has lodged a dispute with the World Trade Organisation against America for raising the L-1 and H1-B visa fees.
There are fears that the visa hike along with the Issa Bill will have negative consequences for the IT industry in India. Legislators have also raised concerns about bonuses being included in the $100,000 wage, as if the bonuses are only paid if certain conditions are met, so in reality the employee on the H1-B visa could be on a lower wage than their American colleagues, thus increasing the risk of foreign nationals being hired on a lower wage than Americans. It remains to be seen what will transpire with this Bill, as it is against the backdrop of an election year, so has yet to be passed through Congress.