Donald Trump govt to ban work permits for spouses of H-1B holders: Move will impact not just Indian techies but also US economy

India-based global IT Services companies do not take the majority of new H-1B visas, contrary to prevalent rhetoric

Sulekha Nair May 29, 2019 17:10:43 IST
Donald Trump govt to ban work permits for spouses of H-1B holders: Move will impact not just Indian techies but also US economy
  • It is too early to say how the proposed latest move by the Trump government will impact Indian IT professionals in the US though

  • H-4 visas, are work visas, issued only to very close or immediate family members of H-1B visa holders

  • India-based global IT Services companies do not take the majority of new H-1B visas, contrary to prevalent rhetoric

The Donald Trump government has taken the first step towards banning work permits of spouses of H-1B visa holders. The move was first proposed in 2017. According to The Economic Times, the US government issued a notice on 22 May for the proposed rule that will kick in public consultations to ban the H-4 EAD (Employment Authorisation Document).

H-4 visas are work visas issued only to very close or immediate family members of H-1B visa holders. It was issued in 2015 by the Obama administration through an executive order so as to mitigate the large skills gap in the US IT sector to be filled by hiring highly skilled professionals who are spouses of H-1B visa holders awaiting green cards.

The revocation has been under review at the White House’s Office of Management and Budget (OMB) since February.  It’s now for the White House to take a final call on it before a formal regulation in this regard is issued and the Department of Homeland Security can inform a federal court where a lawsuit on this issue is pending, according to a PTI report.

What does this latest move from the Trump administration mean? If this proposal goes through, spouses of H-1B skilled professionals who are given H-4 visas will have to leave the country at the end of their work permits. The H-4 visas are given to spouses of H-1B visa holders and their children below 21 years of age.

Since Trump’s election, the H-1B visa has been a focal point of discussion and has come in for a three-pronged attack from the Justice Department, Department of Homeland Security and the United States Citizenship and Immigration Services.

Donald Trump govt to ban work permits for spouses of H1B holders Move will impact not just Indian techies but also US economy

Representational image. CNN News18

Trump who campaigned on an "America First" platform of favouring Americans for hiring has remained true to his promise by putting in jeopardy jobs and lives of IT professionals from across the world who work in the US.

Some analysts were pragmatic in India about the move and said that it would not impact many Indians. Simply because, says industry veteran TV Mohandas Pai, Indians who are in the US are highly qualified and so are their spouses. It won’t be easy to find replacements for them, said Pai.

The fate of 90,000 spouses is in a delicate balance—of which a majority are Indian professionals. The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields. Under the H-1B visa programme, US-based companies hire highly skilled foreign workers, up to a maximum of 85,000 a year. Of these 65,000 are hired from abroad and 20,000 from among foreign nationals studying in the US.

In February the White House formally received the proposed changes in the existing regulations to end the work authorisation for certain categories of H-1B foreign work visas, according to a PTI report.

Is there cause for alarm. Not yet, says Zeenat Phophalia, associate partner, LawQuest that specialises in immigration services. "It is too early to say whether this will go through and one must wait and watch", she said. However, Phophalia concedes there will be challenges if this proposal goes through. The idea for H-4 visas was to bring in talent from outside to fill in the skills gap in the US economy. If the present administration makes that difficult, it will not only impact Indian highly skilled IT professionals inclination to work in the US but more importantly, also impact US economic growth.

Indian nationals are in demand in the US because of the high technical skills they possess, said an IT analyst. The Indian IT industry is a net creator of jobs in the US and supports nearly half a million jobs there.

According to Forbes, Trump’s administration’s crackdown on high-skilled H-1B immigrants will impact American companies and the US policy. The services provided by high-skilled Indian IT service professionals have been important in making the US companies more competitive and increasing the country’s economic growth, Forbes said.

Contrary to prevalent rhetoric, India-based global IT services companies do not take the majority of new H-1B visas. The Indian IT sector received around 16 percent of the 65,000 visas issued last year. The sector gets over 80 percent of its revenues from the US and Europe while the remaining 20 percent comes from Asia and the domestic market.

The top 7 India-based companies received only 2,200 new H-1B petitions for initial employment in FY 2018, less than 2.6 percent of the 85,000 annual limits for companies, according to an analysis of USCIS data by the National Foundation of American Policy. Further, their use of H-1B visas is declining: New H-1B petitions for these top 7 India-based companies had fallen 43 percent between FY 2015 and FY 2017.

Monster, a global online employment solution, quoted a survey on its site on talent shortage in the US. According to IT outsourcer Harvey Nash and auditing firm KPMG's CIO survey 2018 conducted with over 3,000 technology leaders, 65 percent said that US hiring challenges are hurting the industry, against 59 percent the previous year.

There is a skill set gap that exists in the US. There are two ways of bridging this gap—one way is to upskill locally. Another is to grant a short-term visa for which the H-1B visa is a critical exponent.

Nasscom, a trade association of Indian Information Technology (IT) and Business Process Outsourcing (BPO), said it will continue to highlight the positives of hiring Indian spouses of H-1B visa holders. "There is a broad admission of the contribution of Indians in the IT industry, of which 75 percent work with the Fortune 500 companies and a majority of these are American firms. They contribute $58 billion to the country's gross domestic product which is much more than the GDP created by six individual states in the US," said Shivendra Singh, Vice President and Head—Global Trade Development, Nasscom, adding that each of these companies that Indians contribute to will be impacted. "Everyone will weigh their issues and we [Nasscom] will make a submission. For us, this is a trade issue. This isn't an immigration issue," he said.

However, Mohandas Pai was sceptical if any lobbying would work in India's favour in Trump's administration. He said that Trump was trying to curry favour with his electorate for the re-election and would do all that he can to show that he is protecting American jobs for Americans.

It is too early to say how the latest proposed move by the Trump government will impact Indian IT professionals in the US though.  An expiry date is yet to be determined.

Updated Date:

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