“My legislation refocuses the H-1B programme to its original intent—to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them.”
– California Congressman Zoe Lofgren
A legislation has been introduced in the US House today, that reforms the existing H1B program, that allows US companies to hire foreign workers. Like I mentioned in my earlier post, the H1B visa is a crucial tool to India, because 60 – 70% of the currently allowed 85,000 visas per year is used by India. So reforms on this visa is definitely going to affect the Indian economy. Here’s what has changed with the new H1B rules.
New H1B Visa Rules and Changes
Here’s what I already know. Some of this is unfolding and will be updated as we get to know more details. Do subscribe for updates.
Minimum salary for H1B visa increased from $60,000 to $130,000
What this means: For Indian companies who send employees to US on the H1B visa, things are going to be tough. Earlier they could send someone on an H1B visa for $60,000 salary (which is low end salary considered cost of living in US, especially for skilled labour/Engineering positions), but now they would need to offer higher salaries. This will cut off the cost savings angle for companies. As for American companies, this means that their cost of hiring an H1B employee is as much as hiring an American employee. Plus, their overhead charges (processing etc) may be higher. Overall, companies will be forced to move forward with H1B visas, unless there is a strong candidate.
However, for strong candidates with good experience and skills, this means good news. Their chances of getting an H1B visa may be lower, but they will get better opportunities. The sad part is that if 70% of 85,000 visas offered earlier were from India, that number will go down for sure.
No increase in number of H1B visas (85,000 per year)
As of writing this, there is no hint of increasing the number of H1 visas allowed from 85,000 to any bigger number.
No “per country” cap
Lofgren also said that the new H1B visa rules removes the ‘per country’ cap so that all workers are treated more fairly and to move to a system where employers hire the most skilled workers without regard to national origin. What this means is that there won’t be any preferences given for candidates based on where they are from. For candidates, this will make things more competitive, as now their skills will be compared to everyone in the 85,000 lot as opposed to getting preference based on their country of origin.
H1B Processing charges may get expensive
Another reform that’s proposed is one that makes the processing of H1B visas expensive. Currently, as per the law, the company who offers the job is supposed to do all the paper work. Typically, companies do it via an immigration attorney and this is a costly affair (anywhere from $2500 and up based on case). There has been many complaints with the USCIS that some sketchy companies make the candidates pay these charges or deduct it from their salary once they are in the states). All this is going to get tightened up as the process is going to be expensive, strict and tough.
What does the new rules mean?
In my personal opinion, this is a welcome change. Especially, the salary increase is a good thing for Indian candidates. The $60,000 minimum salary was abused much by companies. In places like the valley, $60,000 is a low scale salary. Someone coming in from India with American dreams, will struggle with a $60K salary in US (although it might sound like a big deal when you convert 60K to INR). Many people agree to it, to pursue their American dreams and are willing to struggle few years to get a “ticket of their dreams”.
The new visa rules will mean better salary and less abuse by companies. However, it will also mean lesser opportunities for more skilled people.
More updates soon….