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US Immigration Law to Hurt Indian Employees

On visa issues, none seems to have more impact to hurt or help Indian employment in the US than those related to H-1B and L-1 visas. These are the key sticking points in the comprehensive immigration reform bill which is currently being considered by the Congress. It is of significant concern to IT companies and the potential changes under the Comprehensive Immigration Reform (CIR) bill would curb the use of H-1B visas for companies with higher ratios of work force under this category. Most of the Indian companies will fall under this classification. In conjunction, these companies will also have to pay a higher fee to get a H-1B visa.

Prime Minister Manmohan Singh and New Delhi have already stated and lobbied that this proposed immigration Bill will hurt Indian IT companies. These concerns are well-justified as the bill would adversely impact visas for highly skilled non-immigrant workers.

In fact, Indian IT companies have certain business models that could be impeded with the bill is approved and firms with temporary foreign employees are forced to pay the severe additional fee for each non-US national employee.

Even more significant, is that this reform may also prevent any firm from hiring people on H1-B visas if 50% of its employees are not Americans.

However, it is not just Indian IT companies, who are opposed to the proposed legislation. IBM, for example, has also supported a legislation that is free from country-specific restrictions, and much of the Silicon Valley IT industry has begun to voice their concerns over the proposed reform.

Breaking down the Bill, the House version of the Bill has increased the cap on H-1B visas, pegging it higher than the Senate version but has also created various slabs for wages that will increase the employee cost for companies. The IT industry is also worried that some unfavorable clauses could return when the Bill reaches. The key points of the CIR are:

· Non-American companies will have to provide wages that are average of American wages

· All firms that have 50% or more non-US employees will have to pay higher visa fees of $10,000 (compared with $4,500 at present and the $2000 for H-1B and L-1 visas originally)

· The 50-50 model increases entry burden on firms employing more non-Americans - most of these companies are Indian IT firms

· The proposed Bill has created various portions for wages, which, when applicable, would inflate the employee cost for Indian firms

The glaring obviousness of the CIR bill is that the bill seems to discriminate against Indian IT companies. In fact, India has also threatened to move the disputes settlement body of the World Trade Organization if the Bill gets passed as a law in its present form.

With the CIR Bill the main focus for the coming month, it is crucial that the final piece of legislation ensures that high skilled visa programs continue to attract workers to the US. It must allow American companies to have a competitive advantage in today's highly competitive global marketplace. Without such provisions, both US and Indian companies are very likely to suffer.


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