Hyderabad: The US Senate has introduced a draft legislation that seeks to add new curbs on H-1B and L-1 visas and prevent foreigners from replacing qualified US employees. If this passes into law, India’s large outsourcing industry is likely to be impacted.
The Bill seeks to prevent firms that have at least 50% of their employees on H-1B or L-1 visas from applying for more. The US operations of many Indian technology outsourcing firms have up to 90% of the employees on these visas.
“The stated objective of the Bill is to prevent fraud and visa abuse. However, several of the provisions of this Bill are against the principles of free trade and are creating trade barriers,” Som Mittal, president of industry lobby group National Association of Software and Services Companies, or Nasscom, said in a statement. “In many ways, it is targeting Indian companies and restricts their ability to compete in the US marketplace. This is also against the (US) president (Barack) Obama’s stand against protectionism at the G20 summit.”
Standing firm: Nasscom president Som Mittal. Rajkumar / Mint
Dick Durbin of Illinois, the second-ranking Democrat in the Senate, and Chuck Grassley, a Republican senator from Iowa, introduced the Bill on Thursday.
The Bill, if passed, would require employers who want to hire an H-1B visa holder to first make a “good-faith attempt” to recruit a qualified US worker. It also seeks to prohibit employers from using H-1B visa holders to “displace qualified American workers.” It also seeks to allow the US department of labour to initiate investigations without a complaint and without the labour secretary’s personal authorization, review H-1B applications for fraud, conduct random audits of any firm that uses the H-1B programme, and conduct annual audits of firms who employ large numbers of H-1B workers.
The premise that the visa is used to displace US workers is misplaced, said Mittal, adding that Indian firms had been allocated only 12,000 H-1B visas in 2008, out of a total 85,000.
Nasscom, which has professional lobbying firms on its payroll in Washington DC, said it will “provide perspectives to the relevant lawmakers on the significant negative impact these unfair trade practices can have on the India-US trade partnership.”