H1B Visa Restrictions in Stimulus Package – What Exactly Does it Mean?
Last week President Barack Obama signed into law the stimulus package that proposed to pump 787 billion dollars into the
The provision (on stimulus bill) imposes higher government scrutiny on banks and other businesses getting federal bailouts if they use the H-1B visa program to hire skilled workers. The program generally grants temporary visas to at least 85,000 workers a year.
Instead of barring H-1B workers, the stimulus law temporarily increases the number of procedural hurdles that banks and other bailout recipients must clear. It also gives the government much greater ability to scrutinize companies' hiring practices when it comes to the foreign workers.
Once the stimulus package was passed media, especially in
The time when young budding IT professionals of
Bangalorewould head to the for either higher studies or to fetch themselves the 'dream' job, seems almost to be over. But with the US Senate imposing restrictions on hiring foreigners on H1-B visa, the feeling has come hitting hard on the highly skilled Indians that the door to the US might actually close for them. United States
Another article in the same paper says
Nearly 100,000 skilled Indian workers' prospects of living the American dream may turn sour with the Congress barring firms that received bailout money from hiring foreigners through HI-B visa programme if they replace US citizens. Estimates suggest that there are 100,000 Indian nationals among the 163,000 from across the world that had applied for the skilled worker visa in FY2009.
It didn’t end with the media. The political parties did their part also. The Vishwa Hindu Parishad (VHP), an organization closely associated with main opposition party BJP in
Terming as "discriminatory" the
move to bar firms receiving government bailout from hiring Indian and other foreign workers through the skilled worker visa (H1-B) programme, the VHP on Wednesday threatened to boycott goods of US-based MNCs in the country. US
"The proposed discriminatory clauses that US companies employing H1-B visa holders will not be eligible to receive any sanctions from the 787 billion USD stimulus package are hurting Indians abroad. We are determined to take up this issue in a similar fashion by disallowing American products in
," Togadia told India
Then there are other news reports like this one that there is going to be minimum impact on Indian companies and H1B visa aspirants. In another article in Economic Times
The US Senate’s move to restrict H-1B visas to banks and companies receiving aid under the stimulus package is unlikely to have a major impact on Indian IT players. According to analysts, there are two reasons for this. First, offshoring, which is on the rise, has not been directly targeted by the amendment, and second, other categories of visas are still available.
Now with all these contradictory reports what is the truth? Do these restrictions have a major impact on the H1B visa holders and their job prospects? My answer to this question is that it is only going to have a very minimum impact. Let me tell you why this restriction is going to be a non starter.
A total of 21,800 foreign US work permits were requested for immigrant workers over the past six years from the 12 banks that received the largest rescue packages, totaling $15 billion.
At the same time there is another side to this story. Everyone knows that number of H1B visa holders working in these banks will definitely be more than 22,000. The practice these banks follow for many years now is that they don’t hire a H1B visa holder directly. They hire a H1B visa holder through a consultant. This works like this. You get your visa sponsored through your consultant and come to US. This consultant places you in one of the companies receiving the bail out money from the stimulus plan. Now since the company is not directly hiring the H1B visa holder, the company doesn’t have to comply with the stricter H1B rules and it gets the right people for the right job. This was and will continue to be the major way the banks recruit H1B visa holders. With the new restrictions this practice will increase along with outsourcing.
So the net effect of restrictions for H1B visas on stimulus package – a stimulus for consultants out there and business as usual for companies getting bail out money.