US President Donald Trump on 18th April 2017 signed ‘Buy American, Hire American’ order for tightening the rules of the H-1B visa program to stop visa abuses. The order urges the agencies to come up with changes so that the visas are given to the most skilled, best-paid immigrant workers.
About H1B visa program:
The H1B visa is an employment-oriented, non-immigrant visa type for temporary workers. For such a visa, an employer must present a job and apply for H1B visa petition with the US Immigration Department. The program covers a vast range of occupations, including architects, professors, and even fashion models. It is meant for jobs requiring specialized skills that cannot be filled by a US worker. Many of these jobs happen to be in tech.
Reasons regarding the implementation of the order:
- Critics are of the view that it is being used by companies to hire temporary foreign workers on low salaries to displace local American workers on higher salaries.
- 80% of the approved applications were for the two lowest wage levels allowed.
- The Trump government demands that Americans should fill more of the jobs performed by those people.
How are the visas allocated:
- 85,000 new H-1B visas are allocated each year—65,000 visas are given to foreigners, and 20,000 more are granted to those who have their advanced degrees.
- More than 100,000 employees are allowed in per year because of exemptions for university-related positions.
- Recipients can stay up to six years—the visa is good for three years and can be renewed for three more years.
- The US government held an annual lottery as the demand is higher.
- This year, nearly 200,000 applications were received in less than a week.
People who employ H-1B visa holders:
- The biggest employers are Indian companies such as Wipro Technologies, Infosys, Tech Mahindra and Tata Consultancy Services.
- The American companies include Google, Microsoft, Apple, Facebook and Qualcomm.
- Thousands of Silicon Valley
The changes in H -1B Visa:
- The order doesn’t bring any change to the existing rules, but the main motive is to modify or replace the current lottery for H-1B visas with a merit-based system that will restrict the visas only to highly skilled workers.
- The US secretary of state, the US attorney general, the US secretary of Labour, and the US secretary of Homeland Security will suggest the necessary reforms that need to be implemented to make the order more efficiently.
Effect on India of the US decision:
- Indians were highly benefited by H-1B visas, followed by the Chinese.
- About 86% of the H-1B visas are being issued for workers in computer fields, where Indians are the most.
- The minimum salary of H-1B visa holders is to be doubled and is expected to be about $130,000 after the rule changes.
- If that happens, India’s software industry, already facing pressures on profitability and revenue, will be forced to make a few fundamental changes in their business strategies, the primary being hiring more American workers at the cost of Indian employees who are stationed at client sites in the US.