New US legislation on H1B visa

Why in news?

The Immigration Innovation (I-Squared) Act-2018 was introduced recently in the US Senate.

What is the Act about?

• The H1B is a common work visa granted to high-skilled foreigners to work at companies in the US.
• Its validity is three years and can be renewed for three more years.
• The present Act seeks to increase the annual H1B visa quota.

What are the key provisions?

• The Act advocates increasing the number of base H1B visas from 65,000 to 85,000 a year.
• This is to encourage the migration of talented engineers to the United States.
• It also puts forth the creation of a plan that allows the issuance of these visas based on market demand.
• The new Bill seeks to prevent the H1B visa programme from being used for outsourcing jobs or undercutting American wages.
• It allows the US government to raise as much as $ 1 billion from increased visa fees.
• This is to fund science, technology, engineering, and mathematics (STEM) education as well as train workers in the country.
• The act provides work authorisation for spouses and dependent children of H-1B visa holders.
• It also establishes a grace period during which H-1B visa holders can change jobs without losing legal status.

What would the impact be?

• The top American IT companies would have the world’s best and brightest to fill jobs in highly technical, specialised fields.
• Notably there is a shortage of American labour in this front.
• Logically, the major beneficiaries of this would be companies like Google, Microsoft, Facebook, etc.
• On the other hand, if the Bill was approved, it could be a big setback for Indian IT services companies.
• This is in the context of higher salary norm and the threat of increased brain drain.
• The minimum salary would be increased to $100,000 and so top companies can attract talent.
• However, due to a higher minimum salary, the number of people going to the US from other smaller Indian firms would come down.
• Notably, many IT firms have once been the biggest beneficiaries of the H1B visa regime.
• But with stricter norms, dependency on such visas has consistently been reduced and local hiring in the US increased.
• In all, the measure would mean a trend away from offshoring and outsourcing to India.

How does the future look?

• India's National Association of Software and Services Companies (Nasscom) has advocated a more liberal visa regime.
• The demand is to allow better labour movement from India to overcome the shortage of over one million engineers in the US.
• The fact is that US technology companies need IT talent but the US politics is so divided.
• The so-called I-Squared Act have been introduced in earlier sessions too; but unsuccessfully.
• However, with Trump's protectionist and anti-immigration focus, it is to be seen whether the Bill would be passed.

Source: Business Standard