H-1B fee hike plan rattles IT firms

A framework for comprehensive immigration reform proposed by a group of influential U.S. Senators has sent shockwaves through the Indian business community after it was revealed that it included measures to significantly hike the employer fees payable for H-1B visa applications amidst other steps to “crack down on abusers of the... system.”

The outline of the “Border Security, Economic Opportunity, and Immigration Modernisation Act of 2013,” was released on Tuesday by the so-called “Gang of Eight” Senators tasked with crafting a bill that could win bipartisan support and President Barack Obama’s backing. If it does so, it will go into law and could bring radical reform to what some have described as an outdated immigration system.

Some of the clauses in the proposed bill could be a bitter medicine for Indian firms in the IT space — particularly many of which are classified as “H-1B dependent employers.”

While the bill supplied some positive news for these companies in the form of raising the base cap of the visa from 65,000 to 110,000 annually, it has also imposed new, onerous fees.

For firms that employ 50 or more employees, depending on the percentage of their total workforce that are H-1B or L-1 employees, under the new system they would be liable to pay either $5,000 (30-50 per cent of existing employees with H-1B or L-1) or $10,000 (more than 50 per cent H1-B or L-1) in fees per additional worker in either of these two statuses.

There is little doubt that the reform proposals seek to tighten the screws on “the use of the H-1B and L visas to outsource American jobs by prohibiting companies whose U.S. workforce largely consists of foreign guest workers from obtaining additional H-1B and L visas.”