US Senators and Congressmen have also introduced three bills, which seek to make changes to the H-1B program so that IT firms find it more hard to hire foreign workers. It proposes, among other things, that technology companies make "a good-faith attempt to recruit a qualified American worker" before employing H-1B workers.
Separately, lawmakers have introduced three different Bills in the US Congress that would appear to specifically target Indian IT companies, which, along with Indian techies, have been the main beneficiaries of the H-1B programme for well over a decade. Indian companies use H1B visa along L1 visa extensively, to immigrate and work in U.S. from other countries. The minimum salary for an employee holding the H-1B visa is set at $60,000 per year. The new visa reform bill also eliminates the category of lowest pay, and raises the salary level at which H-1B dependent employer are exempt from non-displacement and recruitment attestation requirements to greater than $130,000.
The S&P BSE IT index plunged by 292.54 points or 2.96 per cent during the intra-day trade. But employing more United States citizens will significantly raise the cost for Indian outsourcers, thus impacting their margins and overall profit.
"Hike in H-1B visa cost will have significant impact on the financials.as Indian companies are major users of H-1B visa though they form very less part of the overall workforce (around 11-15 percent)", Angel Broking said in a report. Wipro and Tech Mahindra also registered falls of 1.62 and 4.23 percents respectively, closing at values of Rs. 457.10 and 451.75. This includes employees of Indian tech companies such as Infosys, Tata Consultancy Services and Wipro, as well as those employed by American multinationals like Accenture and IBM.
US President Donald Trump is also considering an executive order to make it tougher for foreign workers to get H-1B visas. "However, now the bill is yet to be passed and most of the companies are looking at mitigating the risk through increasing local recruitment, more offshoring and moving offices to low-priced states". Trump is unlikely to hesitate in signing the executive order, which would buttress his slogan of "Buy American, Hire American".
This comes in after Trump issued a sweeping executive order banning foreign nationals from seven Muslim-majority countries from entering the US.
If implemented, the executive order could seriously hit the movement of students and skilled employees from India to the US.
"Assuming no executive orders are passed regarding the H-1B visas by April 1, when the visa lottery opens, everybody would latch on to what is now available".
The move will also increase what some Indians informally call "inspector raj", where Homeland Security will have to carry out "site visits" where workers with L-1 visas are employed.