Banning H-1B visas will hit US economy: Nasscom

Two US legislators have made yet another attempt to restrict the movement of temporary Indian workers to the US by introducing a new Bill in the House of Representatives, which if passed would prevent Indian companies from sending IT professionals to US on H-1B and L-1 work visas.

Although this move is among the several seen in the past to either reduce the number of H-1B and L1B visas or strengthen the rules governing the visa process, the new Bill goes a step further by suggesting to prohibit companies from hiring H-1B employees entirely if they employ more than 50 people and more than 50 per cent of their employees are H-1B and L-1 visa holders.

The Bill, termed ‘H-1B and L-1 Visa Reform Act of 2016’ also aims to close loopholes in the H-1B and L-1 visa programmes, reduce fraud and abuse, provide protections for American workers and visa holders, require more transparency in the recruitment of foreign workers, and increase penalties on those who violate the law. It was introduced by Democratic Congressman Bill Pascrell from New Jersey and Republican Dana Rohrabacher from California.

Trade & services issue “This is not a migration issue. It is an issue related to trade and services. There is shortage of STEM skills in US, which requires short term movement of skilled workers from India. And it seen in many surveys done by US Department of Labor. The introduction of H-1B visas was done to bridge this skills gap in the US,” said Shivendra Singh, Vice-President at Nasscom’s Global Trade Development Council. According to Nasscom, Indian IT services companies have invested billions of dollars in the US in the past few years for skill development and support over 4 lakh jobs in US, making it a net creator of jobs there.

“Banning H-1B visas would also mean that US companies will be forced to offshore their work to other countries, which will nullify the benefits foreseen by the Bill and would make US lose a lot of tax dollars,” Singh said.

Over the years a number of concerns have been raised about how certain companies have been using these visa programmes, including a 2011 report from the Government Accountability Office calling for reform, said a statement issued by Congressman Pascrell pointing out that foreign outsourcing companies are the top users of the H-1B and L-1 visa programmes.

“America is producing many skilled, high-tech professionals with advanced degrees and no jobs. By ‘in-sourcing’ and exploiting foreign workers, some businesses are abusing the visa programs and undercutting our workforce to reap the rewards,” Congressman Pascrell said.

However, just the introduction of the Bill doesn’t assure that it’ll go through since it needs to be passed by the Senate before the US President puts his stamp on it. The Bill has not yet been tabled to the Senate.

Apart from impacting Indian IT services companies, experts believe the Bill would have a larger detrimental effect on the US economy itself.