In a move that was not completely unexpected, the Trump administration has extended the temporary ban on work visas and suspended the entry of immigrants on temporary work visas into America till December 31st, 2020. The H1 visa suspension is aimed at increasing employment opportunities for American citizens.
H1 Visa Suspension – Who Does it Impact?
The visa programs affected include the:
- L visas
- J visas
- Associated visas such as the H4
The suspension of H1 visa means that even if they held valid job offers, foreign nationals without a valid non-immigrant visa as of June 23rd, 2020 will not be allowed to enter the USA until December 31st, 2020.
Suspension Of H1b Visa – Who Doesn’t Get Affected
Individuals currently living outside the USA but with valid H1B visas will be permitted to re-enter the country.
People with existing visas already in the USA will not be affected by this suspension.
Visas for workers in essential services such as those employed in the medical or food supply sector may be exempted. Decisions regarding their visas will be taken by consular officers.
Students pursuing courses in science, technology, engineering and mathematics (STEM) in the USA can still participate in the Optional Practical Training (OPT) program. This program allows STEM students to live and work in the USA for 24 months after graduation.
Why H1 Visa Suspension?
America is undergoing record unemployment levels due to the COVID-19 pandemic. Unemployment has risen higher in the past three months than in the 2 years of the Great Recession (2007-2009). As of May 2020:
- Around 20.5 million Americans were unemployed.
- This marked an increase from 3.8% in February of the same year to 13.0%.
- Unemployment levels for immigrants also rose to 15.7% in.
President Trump sees immigrants as a threat to employment for American nationals. Check his proclamation, he said,
By suspending the worker visas, the USA hopes to give its citizens more job opportunities. This includes opportunities for highly skilled and qualified Americans as well as Americans looking for positions as interns, trainees, camp counselors, etc.
How Does The Suspension Of H1B Visa Affect Indian IT Companies?
The H1B visa is one of the most favored visas for Indian IT firms in the USA. In the last 5 fiscal years, 67-72% of all the H1B visas awarded annually have been received by Indians.
That said, with a change in regulations, the visa rejection rates for Indian IT service companies increased from 6% in 2015 to 24% in 2019.
For the fiscal year ending on March 2021, the US Citizenship and Immigration Services (USCIS) had received around 1.84 lakh applications for the H-1B work visa from Indians.
The new suspension order is thus a cause for concern. Indian IT firms like TCS, Wipro, Infosys, etc. have traditionally followed an 80:20 offsite: onsite employee ration wherein 80% of the employees work remotely from India while the remaining 20% work in the USA.
While some believe that these companies prefer hiring Indians on the H1B visa to Americans already in the country because of lower costs, the companies claim it is because of the lack of specialized talent.
With the suspension, companies may be forced to rethink their offsite-onsite employee ratios and conduct more work remotely. This could affect their efficiency and will affect their profit margins as well.
Reactions From Industry Leaders
Technological companies based in America have reacted strongly against the proclamation.
Tesla CEO Elon Musk criticized the proclamation saying H1B visa holders have specialized skill sets that make them net job creators. Google CEO Sundar Pichai said he is disappointed with the decision.
The proclamation has also drawn reactions saying that it will be damaging to the US economy in the long run. The industry lobby association NASSCOM has reacted to the proclamations saying that barring the entry of certain non-immigrants is harmful to the economy.
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