Visa Crunch

Indian, US business group criticize new H1-B rules, say will harm the US economy

The Trump administration’s move to impose new rules targeting H-1B visas making it more difficult to hire skilled foreign workers has been criticized by US and Indian business groups saying they would only hurt American companies.

Announced by the DHS (US Department of Homeland Security) on 6th October, the new rules would narrow the definition of “speciality occupation” and shorten the length of H-1B visas for workers placed in third party sites from three years to one year. DHS claimed that the rules “will combat the use of H-1B workers to serve as a low-cost replacement for otherwise qualified American workers,”. The rules are set to go into effect within 60 days.

As of now, there are around 600,000 international workers on H-1B visa in the US with Indian techies acquiring about two-thirds of such visas in the previous five years. The US Chamber of Commerce, which had in July disputed President Trump’s June executive order suspending H-1B, H-2B, H-4, L-1 and J-visas through the end of 2020, claiming that the new rules could be harmful.

Jon Baselice the Chamber executive director of immigration policy, stated on Tuesday that “We’re still evaluating these proposals, but both of these rules have the potential to inflict serious harm upon many American companies,”. TechNet which is a trade group consisting of tech executives said that the new rule will harm America’s ability to recover from the pandemic and “has zero impact on increasing domestic American jobs.”

TechNet CEO Linda Moore said, “Changing the requirements around H-1B and other work visas will only hurt American companies that depend on high-skilled workers who fill critical positions while we work to grow our domestic STEM pipeline,”.

The National Association of Software and Service Companies (NASSCOM)  which is a trade association of Indian Information Technology and Business Process Outsourcing companies also feared new rules would be harmful. The “changes to the H-1B visa program will restrict access to talent, harm the American economy, endanger US jobs, put US interests at risk, slowing down R&D into solutions to the COVID crisis,” NASSCOM stated. NASSCOM said, “It is important for the US market to be able to access skilled talent for its businesses, especially during the COVID recovery phase,”. “These regulations seem to be based on misinformation about the program and run counter-productive to their very objective of saving the American economy and jobs.”

Overall US unemployment rate grew from 4.1% in January 2020 to 8.4% in August 2020, while unemployment in computer occupations declined from 3% to 2.5% in this period, NASSCOM noted. “In the 30 days ending  28th September 2020, there were over 652,000 active job vacancy postings advertised online for jobs in computer occupations, up from 625,000 vacancies in the 30 days ending 13th May 2020.” “That is, despite the high degree of overall unemployment in the US, demand for high-tech skills continues to remain robust — endorsing the argument that there are just not enough workers with relevant skills to fill them,” it said. 

“The new rules will worsen this talent gap by making it more difficult for US employers to hire foreign workers,” Nasscom said.

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