Home / Industry / Infotech /  US court ruling against H1B visa norms offers relief to American IT cos, workers

New Delhi: In a major relief to thousands of skilled foreign workers in the US and American IT companies, a US court has ruled against two H-1B visa regulations proposed by the Donald Trump administration that restricted companies from hiring foreign employees. The tighter H1-B visa rules were scheduled to come into effect 7 December.

The new rules, now invalid, would have dramatically reduced US businesses’ ability to hire skilled foreign workers and would have irreparably injured companies and the entire economy by forcing businesses to discharge current employees—disrupting ongoing projects and imposing significant costs, and in some cases forcing companies to transfer work to locations outside the US.

Also read: India can’t make up its mind on PSUs, 30 years after liberalisation

The H-1B visa, most sought-after among Indian IT professionals, is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise.

In October, the Trump administration had announced imposing salary requirements on companies employing skilled overseas workers and limits on specialty occupations, because of coronavirus-related job losses.Under the new rules, minimum wages for H-1B workers were set to rise by an average of 40% across job roles and locations, pricing them out of the market in several areas. The DHS had changed the definition of specialty occupation, employee-employer relationship and limiting the validity of an H-1B visa for one year, instead of three, for a worker placed at third-party worksite.

“We welcome the court decision that clearly recognizes the importance of the high skill visa programs to the United States; and that the IFRs issued previously did not hold legal statute," said industry body Nasscom in a statement. This will help US businesses access talent critical to the economic recovery phase in the post-covid world, said Nasscom.

Judge Jeffrey White held that the evidence did not support the US government’s assertion that the unemployment crisis was caused by the pandemic.

Judge White found that the US Departments of Labor and Homeland Security had violated the Administrative Procedures Act (APA) when issuing two new regulations as IFRs and denying the public the opportunity to provide comment.

Nasscom had objected to both the rules saying that it would harm American businesses, American workers, and to the United States’ economy as a whole.

The Court’s decision hinged on whether the US government demonstrated that the impact of the covid-19 pandemic on domestic unemployment justified dispensing with the “due deliberation" that normally accompanies rulemaking to make changes to the H-1B visa program.

The Donald Trump administration’s efforts to tighten the visa guidelines had intensified in recent months, especially after the pandemic-induced job losses affected over 40 million Americans.

Several studies have demonstrated that the H-1B program plays an essential role in helping US enterprises secure skill sets that they cannot find locally and that these high-skilled employees provide tremendous benefit to their employers and the US economy as a whole. Even during the height of the unemployment spike this year created by the pandemic, unemployment in the IT sector remained extremely low going from 3% in January 2020 to 3.5% in September 2020.

The government issues 85,000 H-1B visas each year, with Indian nationals account for over 70% of all H-1B visas issued. Indian IT firms such as TCS, Infosys, and Wipro have said earlier that they have reduced their dependence on H-1B visas to a large extent. However, a reduction in the overall quota of H-1B visa workers would still mean that they would either have to shell out more money to hire local talent or pay more to the existing H-1B work visa holders.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout