Two US Senators have introduced a bipartisan legislation in the senate which if passed will have serious implications for the Indian IT Industry. Revenue model of most Indian IT Companies is heavily dependent on H-1B and L1 visas in the US. The visas, originally designed to help companies fill critical skills gaps, have been used by Indian information technology firms to send thousands of engineers and coders to the U.S. to work.
The bill was introduced by senators Chuck Grassley, Chairman of Senate Judiciary Committee and Dick Durbin, Assistant Democratic Leader. It was also co-sponsored by Senators Bill Nelson, Richard Blumenthal and Sherrod Brown.
“There’s a sense of urgency here for Americans who are losing their jobs to lesser skilled workers who are coming in at lower wages on a visa program that has gotten away from its original intent” said Senator Grassley in a statement.
The most problematic issue could be the 50/50 provision which would prohibit companies from obtaining any additional work visas if they have more than 50 US employees and more than 50 percent of their entire US workforce are H-1B or L-1 visa holders. This provision could be a big blow for outsourcing companies like Wipro and Infosys as it could restrict them from hiring more Indian workers to work in the US.
“The abuse of the system is real, and media reports are validating what we have argued against for years, including the fact that Americans are training their replacements. Reform of the H-1B visa program must be a priority” Grassley added.
Rising unemployment in the US is being cited as the reason for the introduction of this bill. The bill explicitly prohibits replacement of American workers by H-1B or L-1 visa holders. It also gives the Department of Labor the authority to review, investigate and audit employer compliance.
There have been outspread protests against the bill on social media. Opponents of this legislation in the US called the bill a piece of socialist legislature and a sign of growing U.S. protectionism. Though the bill is yet to be passed, it has definitely raised a few questions on the future operations of many Indian IT companies.
