Effect of H-1B Visa Reforms

US president Mr.Donald Trump has signed an executive order to reform H-1B visa norms in Wisconsin. This may have a major business impact on Indian IT companies sending skilled workers to the US under the H-1B visa programme.

“Right now, H-1B visas are awarded in a totally random lottery, and that’s wrong. Instead, they should be given to the most skilled and highest-paid applicants, and they should never, ever be used to replace Americans. No one can compete with American workers when they’re given a fair and level playing field, which has not happened for decades,” Mr. Trump said.

Trump administration has started acting on one of the many promises they had given in their election agenda, Mr.Trump also told the audience in Wisconsin that ““Right now, widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries to fill the same job for, sometimes, less pay. This will stop,”

We are trying to make an honest attempt to understand the effects of these reforms on different segments of society in this blog.

Effect on Student Community:

  • From 2014-15 to 2015-16 there was a significant growth of 60% of applications in the US embassy making it 90,000 applications in 2015-16.
  • Reports say that there will be a decline of about 25-27% in the applications this year (from India) fearing new rule of Trump administration. There are speculations that the job rates will go down significantly (around 20%) for international students.
  • About 70% of students who were planning to travel to the US are in re-evaluation process.
  • Destinations like Canada(61%), United Kingdom(55%), Australia(35%), Germany(42%), France(23%) and Italy(22%) are becoming more popular. Majority students are inclined towards Canada as a result of easier immigration processes post completing education.
  • The fear of an increase in crime against immigrants can become a decisive factor for few aspirants.
  • We feel the main reason for the decline is the lesser job opportunities for international students, jobs help them recover education cost and pay for loans. Additionally, uncertainty around OPT is also playing a major role in exploring other destinations.

Effect on Corporate Companies:

  • India accounts for a highest pool of qualified IT professionals working in the US under the H-1B visa programme.
  • USCIS (the United States Citizenship and Immigration Services) issues 65,000 H-1B visas every year and another 20,000 for applicants having masters and higher degrees from US educational institutions.
  • Earlier USCIS used to receive around 240,000 H-1B petitions, which has declined to about 199,000 this year.
  • Corporates will have to hire local talent, to whom they will have to offer higher salary packages as compared to immigrant workers.
  • Companies will start looking to set up centers in nearshore instead of US, this will take time though.
  • Revenues may be impacted for short period since a lot of H-1B workers will move back to their country of origin.
  • Tighter norms will result in higher legal fee expenses and may result in cancellation of license if found as a defaulter.

Our Analysis:

  • Change in norms will remove lottery system, and only qualified candidates based on their caliber will be able to get jobs in the US, this will still allow US economy to grow with highly skilled immigrants working for US companies.
  • More jobs will be created for American citizens, the government would be promoting higher education to fulfill/cover the gap in required skillset by industry.
  • The change in laws may turn out to be legitimate since student visa is mainly to get a quality education that the US offers and not to get the job or settle down there later, these reforms will bring down exploitation of student visa.
  • We also feel that with lesser job opportunities and an increase in competition, these new policies will help the US to retain quality immigrants and skills.
  • The brain drain of India (and similar countries) may redirect towards other countries, and in few decades we may see new economies emerging strongly since we all know that immigrants play a huge role in developing a nation.
  • Students who do not get a job may turn towards India, this will bring talent back home (India has started showing its potential already). This may be a great movement in the interest of a developing nation.
  • US economy would suffer since the student community brings in foreign money to the US, and these new laws may reduce that inflow.
  • The hype of education in the US would decrease, other destinations which provide quality education will be explored.
  • Tighter regulations may streamline processes and remove ad-hoc nature of work in immigration industry.

To summarize, these new reforms can be positive or negative, but it’s too early to speculate accurately, for now, let’s just wait and watch. However, it would be wise to start planning before it’s too late.

Note: The update on the reforms can be found under Trump, Visas, and Green Cards article.

2 thoughts on “Effect of H-1B Visa Reforms”

    1. Thanks a ton Eminence Immigration, those warm words mean a lot to us. We will surely check out your site. Keep sending those positive vibes, and feel free to share this content with your network.

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