US House Immigration Bill raises concerns in India

Apparently many Indian IT firms are extremely worried about the newly introduced Democratic Party bill, which aims at overhauling the immigration system in the US. The bill has been introduced in House of Representatives this month, and has as a result sent instant alarm bells in the Indian IT industry.

There are many in the IT firms who think that the bill includes provisions that would hamper businesses of these IT companies and as a result they don’t really approve of it.

The bill in question is, (HR 15), which has been introduced in the House by Democratic Leader, Nancy Pelosi, and co-sponsored by several members of the Congressional India Caucus. According to IT industry experts it carries the same kind of killer provisions as the one that had been passed by the Senate.

Nancy Pelosi, talking to reporters said that, “The time is now to pass comprehensive immigration reform. This week, two House Republicans joined 187 members in co-sponsoring HR 15, our immigration legislation that reflects our core bipartisan values: protect our borders, protect our workforce, reunite families, and create an earned pathway to citizenship.” Thus, making it very clear that she was firm about the changes that she and her companions wanted to see through this bill.

The US India Business Council (USIBC) has made its opposition to the bill very clear. This opposition comes for the provisions related to the H-1B and L-1 visas in the bill, which the group feels is specifically targeted towards Indian IT companies.
Ron Somers, the president of the US India Business Council, says about the bill-‘”We support immigration reform legislation but this bill needs to strip out the harmful provisions,”

So which aspects of the bill, is proving a deterrent to the Indian IT companies?
To prevent H1B workers from undercutting the wages paid to American workers; it states that employers need to pay much higher wages to H1B workers than what they do now, under the current H1B program that is prevalent.

The Department of Labor proposes to decrease the prevailing wage levels from four to three levels and post updates on how each level is to e calculated. As a result, it would mean more costs for employers who use the H-1B program.

If a company’s workforce comprises 30-50 per cent H-1B or L-1 employees, then the company must pay an extra USD 5,000 as part of fees for every visa application that it makes.

Again, in FY-2015 to FY-2017, if a company’s workforce comprises of 50 to 75 per cent H-1B or L-1 employees, they must pay an extra USD 10,000 as fees for every visa application for every employee.

The fact that the fees for every H-1B or L-1 visa is being increased, serves as a deterrent for most IT companies seeking to hire workers for outsourcing.

To add to this the bill proposes that by FY 2015, companies should have a workforce that should ideally comprise less than 75 per cent H1B visa workers, moreover that requirement is to be further downsized by 2016 to 65 per cent and finally settle at 50 per cent in the years after 2016.

The bill also summarizes that all companies which employ H-1B workers, must submit an annual report to the Department of Homeland Security. This report must include the W-2 tax forms of every H1B employee who has been hired for the last year.
These provisions termed as ‘killer provisions’ haven’t really gone down well with the Indian IT industry, even though Congressional aides maintain that the Democrats in the House are in a minority and hence the chances of this bill being passed with the Republican support is highly unlikely.

Rubbishing reports that the bill would not be passed, Nancy Pelosi says that -“We have 187 co-sponsors; 185 Democrats, two Republicans. However, 28 Republicans have publicly expressed support for a path to citizenship. If (House) Speaker (John) Boehner can find the will to schedule a vote, we can pass comprehensive immigration reform and make it the law of the land.”
As for the future of hiring foreign workers through the H1B Visa and the L-1 visa, as of now Indian IT companies can only wait and watch.