BENGALURU: The Donald Trump administration has proposed changes to the H-1B registration process, which could lead to more permits being given to those with US master’s degrees, impacting Indian IT firms that rely on the work visa to service clients in that market.
The US General Services Administration said in a note that it was looking at a modified selection process in tune with the ‘Buy American and Hire American’ policies of the US government in a rule that was first proposed in 2011 to improve the intake and selection process of H-1B petitions. The US Citizenship and Immigration Services (USCIS) is the agency mandated to issue visas to immigrants.
“This regulation…would increase the probability of the total number of petitions selected under the cap filed for H-1B beneficiaries who possess a master’s or higher degree from a US institution of higher education each fiscal year,” it said. The US offers 65,000 standard H-1B visas for skilled workers and an additional 20,000 visas for workers with a US master’s degree or higher.
Typically, the agency processes the master’s pool and then sends petitions that are left over to the general pool. “Under the proposed rule, USCIS would first put all applicants in the general 65,000-visa pool. If that cap were reached, any additional US advanced degree holders would be redirected to the 20,000-visa pool,” US political news site Politico reported, citing sources at the Department of Homeland Security. “The administration expects the change could lead to a 15% increase in H-1B visa holders with US advanced degrees.”
For Indian IT companies, which predominantly employ people with bachelor’s degrees, the move could reduce the number of visas that are available for those without the advanced degrees. Some companies are already facing margin challenges as a result of tighter visa rules that require them to hire US citizens and sub-contract work when they cannot hire quickly enough.
“Increase in our sub-contractorcost, on-site localisation and investment impacted the margins by 50 basis points,” Infosys told analysts after its second-quarter results. The company’s margin was flat even as the rupee weakened significantly, which generally results in higher margins.
The company said it expects its sub-contractor costs to remain elevated, until it could staff projects with its own employees. Last year, Infosys said it would hire 10,000 American workers by 2020.