Rising protectionism in the US is leading to an unprecedented number of H-1B denials for IT services firms, with Cognizant getting impacted the most in FY18. According to data from the United States Citizenship and Immigration Services (USCIS), Cognizant saw 4,338 denials in FY18, the highest for any company. Cognizant was followed by Infosys (2,122) and TCS (1,896).
The top five companies cumulatively saw 11,907 H-1B applications getting rejected — 80 per cent of them for extension of visas and 20 per cent for initial visas .
“The increasing protectionist measures imposed by the US administration to safeguard American workers are directly having an adverse impact on Indian IT majors,” Care Ratings said in a report ‘
Local hiring
This has compelled Indian IT majors to increase hiring in the US, leading to an escalation in employee costs and impacting their cost structures, the report added.
Over the past five years, the number of H-1B approvals has declined by 21 per cent. However, the decline has been sharper year-on-year (YoY) in FY18, at 50 per cent.
The US Department of Homeland Security (DHS) has proposed a new visa rule under which firms seeking H-1B visas have to electronically register their petitions in advance with the USCIS.
Reverse selection
There will be a reverse selection process to include US Master’s or advanced degree holders within the 65,000 cap.
This move is expected to significantly reduce the chances of Indian software engineers getting the visa.
In FY18, the total number of approved H-1B petitions for the top five Indian IT companies — TCS, Infosys, Wipro, Tech Mahindra Americas and HCL America — was 22,429. Of these, 72 per cent persons held bachelor’s degrees while the balance 28 per cent held Master’s degrees.
The median salaries were $74,000-$90,000 per annum.