New H-1B Visa Rules: Impact On Hiring, USA H1B Regulations

According to the new H-1B visa ruleshiring and employing people on the H-1B non-immigrant visa will be more challenging for US companies. Two new rules were issued in this regard by the United States on the 6^th of October 2020.

The IT professionals from India are likely to be affected by this decision put forward by the US government. The decision comes at a time when the US Presidential election is less than a month away which, according to the legal experts, could undergo scrutiny by the courts.

The Interim Final Rules have been issued by the DHS (Department of Homeland Scrutiny) and DOL (Department of Labour) and would make it difficult to hire skilled workers/professionals from other nations.

The rules have been announced by the US devoid of any right to comment or a particular notice period.

The New H1-B Visa Rules – 2 Key Take Away

According to the first rule, the wages of the employees hired under the H-1B visa, and the applicants for a Green Card will be increased.

This will come to effect once the decision has been published in the US Federal Register and most likely would be enforced beginning from the 8^th of October 2020.

The second rule issued has made the criteria to qualify for the H-1B visa quite challenging for the US employers. This decision will come in to force 60 days after publishing it in the Federal Register.

Limited H1B visa validity

The H1B visa was until now issued for a period of three years or the duration of a contract- whichever was lower. Under the new regulations, H1B visas for immigrants placed at third-party worksites will be issued only for 1 year.

2. A revised definition for employee-employer relationship

The new H-1B visa rules announced by the US Department of Homeland Security and the Department of Labor have changed the definition of specialty occupations for H1B visa applicants.

The new rule allows them to monitor the workplace more closely to ensure compliance and has increased the minimum wage levels for H1B visa applicants. Though the details are yet to be disclosed, this is a fairly substantial increase and could be a serious deterrent to companies wanting to hire immigrants.

The Changes To Be Brought About By The Implementation Of These New Rules

The following are some of the major changes that the new rules will bring about.

Listing unrelated field of study will not be allowed

H-1B employer will no longer be able to list fields of study that are unrelated to qualify for a particular position
This means the applicant cannot site a general field of study to qualify. For eg: To apply for an H-1B Visa for the position of a software engineer he/she must be a graduate in Information Technology/ Computer Science
This would be a major problem as most of the software engineers employed in IT firms do not always have a degree in Computer Science or IT

The rule has restricted the validity of H-1B visas at third-party work sites to 1 year

The validity of H-1B visas are for 3 years at present
The employees are deployed for a particular work at the third-party worksite
The employees are not a direct client of the employers

The new rules broaden the scope of site visits to be done by the USCIS

The H-1B visa application may be denied or revoked in the situation where the USCIS is unable to make site visits at the third-party locations
It is an important requirement that inspections must be carried out at the third-party locations by the USCIS
The USCIS visits are to gather the requested information
The visa may be revoked or rejected in the situation where the clients do not co-operate

The Impact On Employers And H-1B Workers

The new rules will have a major impact on the employers and the H-1B workforce.

Employers will have to pay higher wages to recruit H-1B workers
Employers likely to face more visa denials
The rate of H-1B visa denials will increase
The technology professionals and Indians account for a major portion of the H-1B workforce
The increase in wages and the tightening of requirements to qualify for the visa will harm the Indians
The present wage rules apply to those who filed for this visa earlier

Increase In Wage Levels – The Different Categories

According to this new rule, wages for 3 highly skilled worker categories (Non-immigrant) have been increased.

H-1B
H-1B1 (Residents of Singapore and Chile)
E-3 (Residents of Australia)

The rule also affects the employment-based applicants for a green card.

Increase In Wages – The Percentile

Based on the years of experience and the nature of employment the wages differ for each region.

Level 1 (Entry Level)
Level 2 (Experience Level)
Level 3 (Qualified Level)
Level 4 (Fully Competent)

Levels	Percentile At Present	Percentile (Based on New Rule)

Level 1	17	45

Level 2	34	62

Level 3	50	78

Level 4	67	95

Based on the current wages paid under the H-1B Visa to employees there has been an increase of 28 percentile.

Reasons For Increasing Wages

The main reasons for increasing wages for H-1B workers are the following;

This will bring about restrictions in immigration
The US employers would find it difficult to employ foreign skilled workers
This means US workers will have a higher chance to get employed
The ultimate aim is to preserve jobs for Americans

Which Categories Of Employees Are Likely To Be Affected?

The proposal by the DHS to strengthen this visa program will make it extremely difficult for companies to hire employees under H-1B Visa. This is likely to have a huge effect on the IT sector in India and technology professionals.

Though most of us tend to think that the new rules on H-1B visas are likely to affect only those professionals seeking employment in an IT firm/tech firm, it is not so. The current situation will be quite challenging for smaller companies, medical professionals, and healthcare workers as well.

Restrictions imposed on the H-1B Visa programme will result in companies resorting to outsourcing. Businesses in the US have been facing a huge shortage of STEM skills (Science, Technology, Engineering, and Mathematics).

The rate of unemployment has rose from 4.1% (January 2020) to 8.4% (August 2020). However, there has been a decrease in unemployment in the occupations related to computer science. The percentage has declined to 2.5% from 3%.

The visa restrictions will restrict access to talents which will in turn delay research and other studies to find solutions to handle the COVID 19 outbreak. According to Nasscom, the new rules introduced to restrict the H-1B visa will surely hurt the US economy in the months to come.

New H-1B Visa Rules – Response To The Announcement

The move is likely to face scrutiny from the courts. Interestingly, these Interim Final Rules have been announced without any right to comment or notice period. That said, there are two recent court rulings that should be kept in mind.

A US Court recently overthrew the President’s June Proclamation to bar the entry of people with non-immigrant work permits such as the H1B and L1 visa till the end of the year.
Another court blocked a proposal for a visa fee hike just a few days before it was brought into effect.

Impact Of The New New H-1B Visa Rules On Indians

Over the last few years, Indians have received over 70% of the H1B visas issued. Keeping the new regulations in mind, one-third of the H1B visas issued in the last few years may have been denied.

Indian staffing companies as well as American companies that place Indians at third-party locations may find themselves unable to do so with the new regulations.

Though the rules were announced to improve the hiring potential for American workers it may backfire and instead increase in outsourcing. It may also harm the US economy by restricting talent inflow and slowing research and development towards solutions for Covid-19.

New USA H-1B Visa Rules – Hiring Workers To Be Harder