Explained: What US job curbs mean for Indian H1-B holders
On Monday, US President Donald Trump signed an executive order barring federal agencies from hiring H-1B visa holders and other foreign workers in place of US citizens or green card holders.
Who are given such visas?
According to data from the US Department of Labor, of 65,000 new visa applications approved every year, an average 1,800 to 2,000, or roughly 3%, are H-1B visas granted to workers employed by federal agencies.
To keep costs in check, federal agencies in the US — and various other countries — either hire a large number of foreign workers or outsource their back-end database updation and other jobs to business process outsourcing firms from around the world. Such jobs in developed countries pay minimal wages, which are not lucrative enough for employable individuals in these countries.
Apart from workers hired by federal agencies, the executive order will also impact workers of Indian companies that are on contract with federal agencies. Bigger federal agencies such as state-run banks give the contract for supply and maintenance of their databases and other services to bigger Indian companies such as Infosys, TCS, or Wipro.
In 2019, Infosys set up a US subsidiary to focus on winning servicing contracts from healthcare and other related projects in the US and Canada. Beyond the US, the Australian federal government’s Services Australia chose Infosys last November to “transform the entitlement calculation engine for the nation’s welfare system”.
Calling the new executive order “ based on misperceptions, and misinformation”, industry body Nasscom said that such a measure could slow down the recovery phase of the US as countries start unlocking. “The order is particularly coming at a time when there is a huge shortage of STEM skills in the US that workers on short-term non-immigrant visas like H-1B and L-1 help bridge,” Nasscom said in a statement.
The executive order has called upon federal agencies to stop replacing US workers and green card holders with H-1B visa holders or other foreign workers. President Trump has also asked the heads of departments of all such agencies under the federal government to review the contracts they gave out in the two previous financial years, and the performance of such contracts or subcontracts.
The heads of departments will undertake an audit of these contracts and subcontracts, and check whether the jobs could have been performed by US workers, and whether opportunities for domestic workers were impacted by such hiring.
What led to the order?
Ever since Trump became President in 2016, the US government had started moving towards a more conservative work visa regime, alleging that Indian and Chinese IT companies had been sending workers at very low cost, which hurt the prospects of skilled workers in the US.
The immediate trigger for the executive order was an announcement by federally-owned Tennessee Valley Authority that it would outsource 20% of its technology jobs to foreign countries.
This action, the White House said, could result in loss of jobs for up to 200 “highly-skilled American tech workers in Tennessee”. It said this could also lead to possible leaking of sensitive user data and theft of intellectual property, which in turn would be detrimental to national security.
In his new order, seen as an extension of an earlier order in which the entry of non-immigrant visa workers had been banned until the end of 2020, Trump too has said outsourcing of jobs should be avoided as far as possible.
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