As rejection rates increase, IT firms may go for fewer H1-B applications in FY19

  With the US suspending premium visa processing, and considering the 50 per cent H1-B visa rejection rates, Indian companies are looking at applying for a lesser number of visas in FY19.

As April 1 comes closer, Indian IT firms applying for H1-B visas in the US (which are determined by a lottery system) are becoming cautious.

To add to their woes, Australia has abolished its popular employer-sponsored 457 visa programme.

“The suspension of (US premium processing) visas, along with a probability of high rejection rates, is making us rethink our strategy,” said the CFO of a Top Five IT company.

Many software exporters that BusinessLine spoke to declined to comment but senior officials within companies and in the industry said they are considering a pullback in applications.

“With high rejection rates and the application money not getting refunded, we are sceptical of applying now,” said a Senior VP who has to get a team together to service an energy and utilities client.

Every year, 85,000 H1-B visas are up for grabs with the US Citizenship and Immigration Services (USCIS). According to reports, 70 Indian companies get 15 per cent of these visas.

With reports surfacing about alleged ‘abuse’ of the H1-B programme, the US government has been taking a tough stand. Increased threshold for an H1-B applicant, higher wages, compliance and ‘Hire American’ have become the new mantra.

The number of Request for Evidence (RFEs) has dramatically increased, by nearly 45 per cent. More RFEs result in higher rejections, according to Rajkamal Rao, Managing Director, Rao Advisors.

Others agree. “Indian companies need to comply better,” said Rohit Turkhud, Partner at Fakhoury Global Immigration.

The fight is against companies and executives who use foreign employment to pay less, provide fewer benefits, and not based on merit or qualifications, said Sara Blackwell, President and attorney at The Blackwell Firm.

In the past, there were options to fall back on, such as fast-tracking of visas for a higher fee. Now that such options are closed, companies are required to put more thought into the application process.

Ishaan Khanna, Director of Investor Relations, India, EB5 United, believes that henceforth, H1-B applicants will have to wait longer to find out if their applications have been approved. “The number of H1-B applicants may reduce slightly,” he added.

Other industry watchers point out that this time, the intent is perhaps more righteous — to promote greater equality between the time required to process “normal” and “premium” applications. Sanjoy Sen, Doctoral Research Scholar, Aston Business School, feels it does rather suit Indian IT and consulting companies who thrive in chaos, specifically characterised by a last-minute approach to managing projects and resources to maximise profitability and utilisation.

Nasscom confident

Software industry body Nasscom, however, is confident that these issues will be tided over. Shivendra Singh, VP & Head, Global Trade Development, said the shortage of STEM (science, technology, engineering and mathematics) graduates is well-known and, at the end of the day, US businesses need to get their job done.

Others, however, say companies may use a mix of H1-B and more US hiring to service clients. Vivek Tandon, founder and CEO, EB5 BRICS, said companies will continue to file for H-1B visas at the same or higher levels but, as a back-up, will plan to hire locally in the US — something which Indian companies have been doing.

Regardless of the clampdown, the demand for H1-B shows no sign of abating.