Congress is toughening the rules for H1 B visa dependent American Companies

An American company which has 15% or more of its workforce on H1 B visa, is considered H1 B dependent.

H1 B visa is a non immigrant work permit that allows American Companies to hire foreign workforce, in specialty occupations that require theoretical or technical expertise in specialized fields, with minimum bachelors or graduate degree, to work in America for less than average American salary.

It’s a win-win situation for both employer and employee, as those chasing the American dream gain entry in America through this visa, and the American companies save substantial amount of money in salaries.

It has been a popular choice of visa for many American Companies like Disney, SoCal Edison and others, hiring Indian IT professionals, to up to maximum of 85,000 a year.

But, Congress has always expressed its desire to curb this foreign work permit, in an effort to save American jobs for Americans.

In fact, President Trump had listed immigration reforms among his foremost executive action plans to take, on his first day in office.

Therefore, in January 2017, Republican Darrel Issa introduced the “Protect and Grow American Jobs Act”, in this regard.

The act strives to change the eligibility requirements for H1 B visa, and to make it more difficult for H1 B dependent companies to obtain work permit.

“In order for America to lead again, we need to ensure we can retain the world’s best and brightest talent. At the same time, we also need to make sure programs are not abused to allow companies to outsource and hire cheap foreign labor from abroad to replace American workers,” Issa said.

“The legislation we’re introducing today does both. It will ensure that our valuable high-skilled immigration spots are used by companies when the positions cannot be filled by the existing workforce,” he stated.

What exactly does “Protect and Grow American Jobs Act” say?

• The objective of the bill is to prohibit H-1B dependent employers from replacing American workers with H-1B employees.
• This bill amends the Immigration and Nationality Act to eliminate the masters degree exemption for H1 B visa, making the eligibility requirement much tougher.
• It raises the annual salary threshold requirement of a H1 B visa worker from $60,000 to $90,000, making it a less profitable choice for American Companies.
• The bill seeks to change the H1 B dependent company’s threshold from 15% to 20% of the workforce, to attain the dependent status.
• Such companies would also be required to send reports to the Department of Labor about efforts to recruit American workers.
• These companies may be subject to five random investigations annually by the Department of Labor.

The bill has been claimed to be the first substantial effort to change the H1 B visa program through law.

The bill was passed by the House Judiciary Committee this Wednesday, accomplishing the first of many steps to become the law. Next step being, voting by the House, before it will be sent to State Judiciary Committee, and finally to the full upper chamber; to become the law.

As per Congress, the bill will protect American workers while increasing access to talent.

But, the consequence of this bill can be huge, on both the IT service providers and the US economy.

Skilled workforce which comes to USA on H1 B visa, not only supplements the US IT industry, but also contributes to other American industries indirectly.

Many H1 B foreign workers bring their families along to live in the US, bringing additional business for other industries like real estate, Banking, Hospitality, to name a few.

The passing of this bill, will affect the overall business economy, impacting the GDP and the growth of USA.

Most US-based Fortune 500 organizations are deeply invested and dependent on IT services providers using H1-B visas to source skills. It will add immense cost pressures on these companies, who actively outsource for both skill and cost advantages.

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