India's IT Industry in Light of New U.S. Immigration Laws

Joubin Sedgh
Founder-Joubin Sedgh Law
Tuesday, February 18, 2014
Joubin Sedgh
As 2014 takes on, Congress continues to debate comprehensive immigration reform as it remains a hot topic among politicians as well as Americans in general. In June 2013, the Senate passed a comprehensive immigration reform bill, which among other things it includes, a significant increase in the annual number of H-1B temporary skilled worker visas, allowing foreigners graduating from the U.S. universities with higher degrees to apply for green cards, abolishing country quotas for U.S. employment based green cards, and creating a pathway to citizenship for the estimated 11.5 million illegal residents currently living in the U.S.

Nonetheless, the legislation still continues to be mired with obstacles in the Republican controlled House of Representatives, where many disagree with the Senate bill on ultimate citizenship paths to undocumented residents. On the other hand, many U.S. employers remain optimistic in the legislation that would expand employment-based visa categories and make employment authorization more readily available.

As it stands, immigrants from a single country can't use more than 7 percent of the total allotment of employment visas in any given year. So, even though the number of immigrants from countries like India are increasing (the third largest immigrant group in the United States), who are qualified to get a visa to the U.S., they can't get in to the U.S because their country quickly hits that 7 percent mark. This is a significant blockage, for Indians in particular, who in 2012 made up the largest proportion(64 percent)of temporary immigrants entering the U.S., on an H-1B visa for highly specialized workers. In the same school year, foreign students from India accounted for 13.1 percent of all foreign students in the U.S. with about 72 percent of them enrolled in STEM degree programs.

The Senate bill would get rid of that limit by creating a new type of permanent immigrant through a "merit-based" visa. The merit-based visas would be applicable to workers who are already in U.S. on certain temporary visas. In this case both lower and higher skilled workers use a point system to determine who should be awarded permanent residence. One would get points for factors such as work history, education, family ties and English-language ability.

But the more important dilemma comes under another provision of the bill's temporary-work-visa, which if becomes law, it will significantly affect India's IT outsourcing industry based in India. The bill, if passed, would impose a number of restrictions on the H-1B and L-1 skilled-worker visas that companies such as Wipro and Infosys heavily rely on to fill positions of their U.S. labor forces. For instance, under the new proposal, companies that employ more than 75 percent of their U.S. workforce on H-1B or L-1 visas would be banned form obtaining additional H-1B visas by 2015. The threshold could even reach 50 percent by 2017.

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