Front side of typical american porch colonial house with American flag out front. H-1B Visa Concerns
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What just happened with the H-1B visa?

9 May 2018

Since Donald Trump first took office, the US tech industry has watched White House developments concerning the controversial H-1B visa with bated breath. We took a look at the latest events to transpire in recent weeks and what they mean.

Since we first asked the question of what will become of the H-1B visa under Trump’s administration, there has been much fervent discussion among legal and tech professionals alike about the effects that changes to the system could have.

Richard Burke, CEO of Envoy, chatted to us about the significant delays companies are coming up against due to the vast amounts of paperwork needed to bring in highly skilled tech workers primarily from India.

So, what has transpired since we last cast our eye on the state of the H-1B visa?

H-1B visas for some, rejection for others

A report released by the National Foundation for American Policy has found that prominent US companies such as Amazon, Intel, Apple, Facebook and Google obtained more H-1B visas in 2017 than they did in 2016. For the likes of Amazon, the change year-on-year was as drastic as 78pc, while for Facebook it was 53pc.

Many large India-based firms, on the other hand, have had to deal with a swathe of rejected applications. Infosys and Mindtree received 49pc and 54pc fewer H-1B visas this year, respectively.

TCS and Tech Mahindra were notable exceptions – they each had an increase of accepted H-1B visa applications, though it’s worth noting that TCS only saw a 13pc increase while Tech Mahindra saw an 82pc rise.

New Jersey-based outsourcing IT firm Cognizant still topped the list with the greatest number of granted H-1B visas.

Overall, the number of visa applications is down by 9,000 for the 2019 fiscal year.

It’s difficult to pinpoint exactly why these policy changes are seeming to primarily affect Indian-based companies. A cynic could argue that this was a form of institutional racism in line with many of the controversial policies Trump has attempted to implement. Yet the argument could also be made that this increase in rejections is a sign that policy changes are effectively weeding out fraudulent applications.

A California IT firm underpaid its H-1B visa workers

Quartz reported last week that the US Department of Labor found that Cloudwick, an IT services company based in Newark, California, was guilty of “severely underpaying” its workers brought to the US on H-1B visas.

The company brought workers over from India with the promise that they would be paid $8,000 a month when they were actually given $800. This salary is below the wage levels required under the H-1B visa, the Wage and Hour Division of the US Department of Labor explained in a press release. The visa programme is meant to be based on the workers availing of it being highly skilled in a way that local workers are not, and being compensated to reflect that skill.

For its sins, Cloudwick will recompense 12 employees a total of $173,044 and will have to hire a third party to ensure compliance going forward.

Infosys, which has seen a decrease in accepted visa applications, last year shelled out $1m to settle cases of visa violations in New York.

The consensus seems to be that while these kinds of abuses of the H-1B programme do happen, they are not the norm by any means.

While we have reported that the Trump administration’s increased scrutiny has led to project delays for companies and a headache-inducing paperwork pile for prospective workers, having companies be forced to rectify instances where immigrant workers are underpaid is a good thing.

Firms are suing USCIS over policy changes

A lawsuit filed in a New Jersey federal court by a group of small-to-medium US outsourcing companies alleges that a policy memo from February 2018 issued by USCIS has caused “irreparable harm” and poses an “existential threat to their business model”, the Hindustan Times reported.

The memo, which took immediate effect, placed restrictions on the deployment of H-1B workers on third-party work sites.

“Congress has consistently shown the public policy is to increase access to IT professionals, and not increase burdens on US companies to retain this resource,” alleges the lawsuit, as reported by The Mercury News.

The USCIS has declined to comment on pending litigation as of yet.

Help or harm?

Amid all these developments, it is easy to forget that at the heart of this story are individuals trying to make a living, none of whom could be reasonably expected to shoulder the blame for the vicissitudes of the US domestic market or the abuses perpetrated by companies that could contribute to this. Yet that is what is happening – virtually blameless individuals are being punished for the sins of others.

It’s heartening to see that larger firms are being increasingly forced to rectify situations where workers are being undercompensated, but this will inspire little hope in H-1B workers if this scrutiny is coupled with high-skilled foreign workers being sacked in their droves.

In advance of the 2016 US election, Trump made the (incredulity-inspiring) claim that America was going through the “greatest jobs theft in the history of the world”.

Neeta Lal, a New Delhi-based journalist, wrote in an article for Asia Sentinel that Trump was willing to have qualified immigrant workers fired and sent home in order to return jobs to Americans.

Time has shown that many of Trump’s claims are not as easy to implement as he maintained during the election, such as his infamous wall. So far, these firing frenzies he alluded to have yet to come to pass but even if they did, would that actually help the US economy?

Is it reasonable to expect that massive lay-offs, if they do come to pass, wouldn’t leave organisations in total disarray? Surely that, arguably, could put domestic jobs at risk if businesses are so adversely impacted that they have to shutter entirely?

Economies are ecosystems. It takes time for the full effect of policies to be seen so, as bootless a concluding sentiment as this may seem, it really is true that only time will tell what happens to the H-1B visa and how it impacts workers, both in the US and abroad.

Eva Short
By Eva Short

Eva Short was a journalist at Silicon Republic, specialising in the areas of tech, data privacy, business, cybersecurity, AI, automation and future of work, among others.

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