Will US pause on H1-B visas will impact Indian companies?

On Tuesday, the U.S. government announced it extended the 60-day immigration and non-immigrant worker visa ban until the end of 2020. Popular work visas including the much coveted H-1B and H-2B and some categories of H-4, J and L visas will also remain suspended until 31 December, the White House said in a press release.

The move, said US President Donald Trump, was to protect domestic workers who had been affected in the wake of the Covid-19 pandemic because of a contraction in the economy.

To fill a shortage with highly qualified low-cost workers in IT and other similar fields, the U.S. government issues a variety with permits per year allowing businesses outside the U.S. to send staff to work on customers.

Among all working visas, the H-1B remains the most common among IT companies in India. Per year, the US government has a quota of 85,000 H-1B total visas. Of this, 65,000 H-1B visas are issued to highly skilled foreign workers, while the remaining 20,000 may be allocated additionally to highly skilled foreign workers who have an American university degree in higher education or master’s.

In addition to the H-1B visas, the US government also issues L1 visas allowing companies to transfer highly skilled workers to the US for up to seven years. H-2B visas enable food and farm workers to seek employment in the US.

After its introduction in 1952, the H-1 visa system has undergone several modifications and amendments to authorize or disallow other groups of foreign workers in the US, depending on the country’s economic situation.

Together with the arrival of the internet and low-cost computers in developing countries such as India and China, the technology boom saw a large number of graduates willing to work at relatively low costs in the US, a win-win situation for both the employer and the staff. Since then, though, it has been frequently criticized for sending low-cost workers to the US at the expense of homeworkers.

After taking over as US president in January 2017, Trump had suggested that low-cost workers hampered the economy and undermined citizens’ jobs. The US then suggested that the “broken” H-1B visa system be reformed.

Trump seized the opportunity presented by Covid-19’s economic contraction by first banning the entry of non-immigrant workers until June 23, and then extending it until December 31.

Trump said in his executive order extending the ban that while “properly administered temporary worker programs can bring benefits to the economy” under normal circumstances, the extraordinary economic contraction created as a result of Covid-19 posed a threat to American workers.

As the ban is in place immediately, issuance of the additional types of visas H-1B, H-2B, J, and L will have to be halted. This means that those who do not have a valid non-immigrant visa as of June 23, and who are outside the US, will not be allowed to enter the country until December 31. Some relief has been given to workers in essential services in the food sector and their entry will be decided by the immigration services consular officer.