31/01/2017 10:10 PM IST | Updated 31/01/2017 10:37 PM IST

All You Need To Know About The Proposed Crackdown On H-1B Work Visas

More immigration chaos?

Kate Munsch / Reuters

After months of speculation, a new bill to revamp existing rules on temporary US work visas including H-1B and L1 visas has been introduced in the US House of Representatives, which if signed into law, would severely restrict the requirements of these permits, hurting many tech job seekers and tech companies who employ foreign workers.

What does it mean for tech workers applying for these visas?

- The bill proposes to double the minimum salary required to apply for the H-1B visa to $130,000 from the current $60,000.

- It will eliminate the Master's Degree exemption for employers. The current H-1B visa program has an annual limit of 65,000 visas each fiscal year, and the first 20,000 visas for U.S. master's degree holders are exempt from that cap. These visas fill up pretty quickly and if the applications exceed the cap, a lottery system is used to allot them further.

- The new rules are expected to overturn the existing duration of the optional practical training work visas known as OPTs, which are issued to students after the completion of their studies to gain work experience.

- The new rules may bring back restrictions on the spouses of H1B visa holders who until recently were not allowed to work in the US and these draconian restrictions were seen as career killers, but in 2015, those work restrictions were removed to allow H4 visa holders to legally work.

What are H-1B and L1 visas and why do companies use them?

H-1B and L1 visas are a class of non-immigrant visas that allow US companies to hire foreign workers in specialty occupations.

Many Indian technology companies such as TCS, Wipro and Infosys rely on these visas to deploy Indian tech workers with the company's client sites in the U.S. According to estimates, the Indian IT industry has at least 350,000 workers deployed on US shores on these visas, ET reported. It is estimated that over 60 percent of the Infosys' American employees, for instance, are H-1B holders, says NDTV.

In addition to Indian IT companies, several Silicon Valley companies also use these visas to employ skilled workers from overseas.

How does it affect tech companies?

In addition to satisfying the revised minimum wage requirements, the bill will also mandate that employers first try to hire a qualified American for the job before applying for an H-1B or L1 visa.

Indian tech companies will likely take a hit from these proposed restrictions and they will have to likely increase their local hiring. On Tuesday, shares of major IT tech companies fell dramatically following the news of the crackdown. The BSE IT index, slid over 4 per cent, NDTV reported. Shares of TCS were down 5.6 per cent; Tech Mahindra stock was down 9.7 per cent, HCL Tech shares slid 6.3 per cent, Infosys down 4.6 per cent, and Wipro declined 4.23 per cent.

But Silicon Valley companies are also likely to be hurt as they have consistently relied on the program to hire highly-skilled workers and lobbied successive governments to ease restrictions. Overall, in 2014, about 65 per cent of all H1B visas were allotted to computer-related jobs, according to US government data.

Is there a silver lining?

The legislation proposes to set aside 20 per cent of the annually H-1B visa quota for small and start-up employers to help them hire high-skilled workers.

For immigrant visas, it proposes to drop the existing 'per country' quota for employment-based immigrant visas to ensure all workers are treated more fairly regardless of national origin.

How is India responding?

The Indian government appears to have taken notice of the reports but it is unclear if it's going to escalate the matter as a diplomatic issue. India has been largely silent on Trump administration's recent immigration ban barring foreign nationals from seven Muslim-dominated countries.

"India's interests and concerns have been conveyed both to the US administration and the US Congress at senior levels," PTI reported External Affairs Ministry Spokesperson Vikas Swarup as saying.

CEOs of Indian tech companies have been largely silent on the matter. Recently, Wipro CEO Abidali Z. Neemuchwala played down the threats that restrictions on H1B place on the company, saying the Wipro is already focused on hiring more Americans and local workers.

"We continue to focus on localisation. We intend to continue hiring locally and invest in delivery and innovation centres in the U.S.," The Hindu reported Neemuchwala as saying.

With PTI inputs