Trump Drops Bomb On H1B Visa Holders; Eligibility Raised To $1.30 Lakh Salary  

Proving the fears of the Indian IT industry true, the POTUS (President Of The United States) on Tuesday dropped a most powerful bomb in the form of new salary law. 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 program to replace American employees with foreign workers, mainly from India.

The High-Skilled Integrity and Fairness Act of 2017 introduced by California Congressman Zoe Lofgren prioritizes market-based allocation of visas to those companies willing to pay 200% of a wage calculated by survey, eliminates the category of lowest pay, and raises the salary level at which H1B dependent employer are exempt from non-displacement and recruitment attestation requirements to greater than $130,000.

This is more than double of the current H1B minimum wage of $60,000 which was established in 1989 and since then has remained unchanged.

The new salary limit makes it highly impossible for those already in the US on less than $1.30 lakh to stay back and those getting job offers with less than $11,000 per month salary are not eligible even to apply for a H1B visa. Thousands of IT employees working for Infosys, Microsoft, i-Gate, TCS, HCL, Wipro, Accenture, TechMahindra, etc. are the worst affected by the new law.

IT Shares Crash

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 and 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.

New Salary Legislation

"My legislation refocuses the H1B programme to its original intent – to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them," said Lofgren.

"It offers a market-based solution that gives priority to those companies willing to pay the most. This ensures American employers have access to the talent they need, while removing incentives for companies to undercut American wages and outsource jobs," he said.

Lofgren said it removes the 'per country' cap for employment-based immigrant visas so that all workers are treated more fairly and to move to a system where employers hire the most skilled workers without regard to national origin.

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 Labor 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 H1B 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.

It among other things removes visa hurdles for students and other temporary visa holders by building a bridge from F-1 student status to Lawful Permanent Residence and removes paperwork burdens by streamlining H1B filing requirements and reducing administrative costs.

The legislation tightens employee protection by stipulating that employers may not reduce beneficiary wages, regardless of whether the deduction is in accordance with a voluntary authorization by the employee.

It makes exceptions for taxes, garnishments, and deductions that are reasonable and customary in the occupation.

In a related development, Senator Sherrod Brown has announced to introduce H1B and L1 Visa Reform Act in the Senate, which he said would close loopholes in the H1B and L1 visa programs and provide increased protections for both American workers and visa holders.

"We need to crack down on the fraud and abuse that allows corporations to avoid paying Americans fair wages and exploit foreign workers," said Brown.

"During his campaign, President Trump promised to increase oversight of our H1B and L1 visa programs and reform starts with this bipartisan legislation to ensure that American businesses are giving American workers a fair shot at good-paying jobs," he said.

The bill would require that employers first offer a vacant position to an equally or better qualified American worker before seeking an H1B or L1 visa holder.

It would also establish wage requirements for L1 workers and improve H1B wage requirements to encourage companies to hire qualified American workers and prevent them from using foreign workers as a source of cheap labor.

Under the H1B and L1 Visa Reform, the Department of Labor (DOL) and the Department of Homeland Security (DHS) would have additional oversight authority to investigate fraud and abuse as well as to increase penalties for companies that violate the bill's requirements.

The bill also requires DOL and DHS to share information so that visa petitions are effectively scrutinized.