Mumbai: Shares of information technology stocks on Tuesday slumped after Press Trust of India reported that the H1B visa reform bill introduced in the US House of Representatives.
Infosys Ltd fell 4.5%, its steepest fall since six month, TCS fell 5.5%, its biggest fall in 27 months, Tech Mahindra Ltd fell 9.7%, the most since 20 months, HCL Technologies Ltd 6.3%, the steepest fall in 15 months, Wipro Ltd 4.1%, the most in nine months.
While Mphasis fell 3.9%, Geometric Ltd 3.9%, Hexaware Technologies Ltd 3.4%, Mindtree Ltd 3.3% and KPIT Technologies Ltd 3.1%.
BSE IT Index fell as much as 4.8%, its biggest fall in six months, while India’s benchmark Sensex Index fell 0.6% to 27680.51 points.
Later, the shares erased a part of the losses. Infosys shares closed down 2.01%, TCS shares fell 4.47%, Tech Mahindra fell 4.23%, HCL Technologies fell 3.67% and Wipro Ltd fell 1.62%. The BSE IT index closed down 2.96%.
A legislation has been introduced in the US House of Representatives which among other things calls for more than doubling the minimum salary of H1B visa holders to $130,000, making it difficult for firms to use the software professionals to replace American employees with foreign workers, including from India, PTI report said.
It raises the salary level at which H1B dependent employer are exempt from attestation requirements to a new required wage level of 35 percentile points above the median national annual wage for Computer and Mathematical Occupations published by the Department of Labour Occupational Employment Statistics (roughly $132,000), which would be adjusted in the future without the need for new legislation, and eliminates the Master’s Degree exemption for dependent employers.
The legislation sets aside 20% of the annually allocated H-1B visas for small and start-up employers (50 or fewer employers) to ensure small businesses have an opportunity to compete for high-skilled workers, while still protecting against outsourcing, the PTI report added.
Earlier Bloomberg reported that the Donald Trump administration drafted an executive order aimed at overhauling the work-visa programmes information technology companies depend on to hire tens of thousands of employees each year.
If implemented, the reforms could shift the way US companies like Microsoft, Amazon and Apple recruit talent and force wholesale changes at Indian companies such as Infosys and Wipro. Businesses would have to try to hire American first and if they recruit foreign workers, priority would be given to the most highly paid, the Bloomberg report added.