US President Donald Trump signed a proclamation suspending a number of working visas for immigrants and non-immigrants temporarily until the end of 2020. The proclamation suspends H-1B, H-2B and L Visas and limits entry into the USA till 31 December 2020. It also contains other types of J visas, such as assistants, students, instructors, camp counsellors or summer job trips.
The administration of Trump described the decision as a plan for preventing the economic impact of the pandemic and giving priority to jobs in the United States. Trump said that it was necessary, especially for millions of Americans who have lost their jobs because of the current economic crisis.
The termination of H1B Visa will affect Indians the most. This visa is used to send skilled IT professionals from the India to the USA by tech companies such as Tata Consultancy Services and Infosys to run outsourced projects for US.
Text of the proclamation
“Under ordinary circumstances, properly administered temporary worker programs can provide benefits to the economy. But under the extraordinary circumstances of the economic contraction resulting from the COVID-19 outbreak, certain nonimmigrant visa programs authorizing such employment pose an unusual threat to the employment of American workers.” Further, “Many workers have been hurt through no fault of their own due to coronavirus and they should not remain on the sidelines while being replaced by new foreign labor.”
Impact of the Ban
According to the order, the ban is effective immediately. Nobody will be allowed until 1 January 2021 to apply for H-1B, H-2B and certain L and J categories.
Highly skilled workers are the centre of the H-1B program. The intention of L-1 program is to transfer employees in a company. The H-2B visas are available for temporary workers from the non-agriculture sector.
The proposed law will extend to people who are outside the United States. They include those not having valid non-immigrant visa or an official travel document. According to the order, it does not have any effect on the lawful permanent citizens of the USA. It also does not affect foreign nationals who are spouses or children of an American citizen. The latest proclamation exempts foreign nationals seeking to enter the USA for temporary employment or facilities which are important to the food supply chain.
Impact on India
The US administration issues a certain number of visas each year. This enables companies outside the USA to send employees to work on customer sites. This enables highly skilled low cost employees in IT and other related fields to fill up a vacuum. H-1B is the most common of all these work visas for Indian IT firms.
Impact on IT Firms
US President Donald Trump’s termination of H1B and other work visas is likely to have a major impact on the Indian IT firms. This is because Indians corner the lion’s share of most of these work visas.
Applications to the USCIS
According to official data, as of April 2020 approximately 2.5 lakh of work visa applications were received by the U.S. Citizenship and Immigration Services (USCIS). For the current financial year ending March 2021, Indians have applied up to 1.84 lakh or 67% of overall H-1B work visas. Besides the suspension of the working visas, Trump’s Executive Order made significant changes to the H-1B working visa norms. They will no longer be decided by the current lottery system. The new standards will now favor highly skilled workers who are paid the highest salaries by their respective companies.
Impact on Indian Companies
This could have a substantial impact on Indian IT companies’ margins and salaries. They send out thousands of low-cost employees to work on client sites in the US. Although large Indian IT companies have reduced their dependence on H1B and other workers’ visas by locally recruiting up to 50% of their staff, they still rely on these visas to control costs.
Indian IT companies also offer subcontracts to Indian citizens who are already present in US with valid H-1B visas. Wipro, spends 20% of its revenue on Indian workers who have valid H-1B visas under contract.
A significant number of IT workers from India and many American and Indian businesses were issued H-1B visas by the US administration. This was done during fiscal year 2021 starting on October 1. Now they will need to wait at least until the end of this year before approaching the US diplomatic missions for stamping. This will also affect other Indian IT professionals who are seeking renewal of their H-1B visas.
The news is disappointing for the lakhs in India who seek an H1B visa. Canada and Australia which were the alternatives to the American dream have also become distant now. This is because of the current global economic scenario.
Human rights bodies have slammed Trump’s decision to stop certain non-immigrant work visas at least until the end of the year, in particular the people working among immigrant communities. The American Immigrant Lawyers Association (AILA) said that the ban on issuance of visas for H-1B, H-2B, J-1 and L-1 would hurt businesses, households, colleges, hospitals and local economies and will hinder America’s economic recovery. President Donald Trump has been advised by leading American lawmakers to lift the temporary termination of H-1Bs and other visas.
The H-1B visa problem has also been discussed during discussions between Washington DC and New Delhi in the last few years. The Indian IT industry, through Nasscom, has also lobbied against such reforms.
Several CEOs of tech industry have spoken out against the move, with Google’s Sundar Pichai being the most influential voice.
“Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation – we’ll continue to stand with immigrants and work to expand opportunity for all,” Pichai tweeted.
Other business leaders such as Elon Musk also expressed their disappointment with the decision of the Trump administration.
Trump dismissed the growing opposition to the order by numerous corporate groups. Further, he also dismissed concerns lawmakers and institutions of human rights in announcing the proclamation before the November presidential elections.
The irony of the ban on H1B visas is that it most influenced Indians, a country and people about whom Trump spoke of only in superlatives. Although his visa declaration is also not directly targeted at India, but because the big recipients are Indians, that is what it will turn out to be.
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