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H-1B visa rules: What are the new restrictions imposed by Trump administration

New H-1B restrictions: The US government's new order narrows definition of 'specialty occupation' while closing overboard definition that worked well for years for overseas companies doing business in the US

US President Donald Trump US President Donald Trump

In a big blow to Indian companies and thousands of individuals seeking H-1B visas in the US, the Trump administration has announced fresh restrictions to ensure only a limited number of people are given the visas to work in the country. The Department of Homeland Security on Tuesday issued a new order that narrows the definition of "specialty occupation" while closing the overboard definition that worked well for overseas companies doing business in the US.

To stop displacement of American employees and tighten the noose around companies taking advantage of loopholes in the existing h-1B visa system, the US government has made it mandatory for them to furnish additional documentations to prove they actually need the H-1B workers from overseas countries.

Also read: H-1B visa: Blow to Indian IT employees aspiring for the Great American Dream

The US government has also given additional powers to the Department of Homeland Security to enhance onsite inspection and ensure compliance of the new norms by companies once H-1B requests are approved. The new rules could also lead to a change in minimum wage rule for H-1B visa workers in the US.

Key changes to H-1B Visa rules

  • It narrows the definition of "specialty occupation" as Congress intended by closing the overbroad definition that allowed companies to game the system
  • Require companies to make "real" offers to "real employees," by closing loopholes and preventing the displacement of the American worker
  • Enhance DHS's ability to enforce compliance through worksite inspections and monitor compliance before, during, and after an H1-B petition is approved.

Experts suggest rising unemployment and contraction of the US economy in the wake of the pandemic triggered an embargo on the much-coveted non-immigrant visas including H-1B, H-2B, H-4, J, and L until the end of 2020. However, fresh restrictions pronounced by the Trump administration is a huge blow to Indian IT professionals eyeing the US job market.

"While cutting back H-1B visas for foreign skilled workers and tightening wage-based entry barriers appear to be a wise move for the protection of American workers, the restrictions are likely to send shivers across industry verticals and hamper competitiveness from a global perspective. It would be interesting to note how these restrictions would impact the people-to-people linkages and trade and economic cooperation, especially in technology and innovation sectors, that have formed the basis of the US-India partnership in the past few decades," said Sonam Chandwani, Managing Partner at KS Legal & Associates.

Also read: H-1B visa ban: Who said what after blow to Indian IT firms?

The H1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China. According to the Department of Homeland Security, the interim final rule to be published in the Federal Register will be effective in 60 days.

The new rules would shatter the American dreams of hundreds of Indian IT professionals. In June, too, US President Donald Trump had decided to temporarily freeze the entry of H-1B visa holders in the country, thereby affecting the plans of several Indian companies working in the US.

Issuing a presidential proclamation, the Trump administration had restricted those entering the US on H-1B visas, L visas, J visas, and H-2B seasonal worker visas from June 24 to December 31. Popular work visas such as H-1B and L1 are routinely used by Indian IT firms to send their employees to work on client sites in the US. The new changes proposed on Tuesday will make it more difficult for Indians to work in the US.

The move will likely affect Indian IT companies such as Infosys, Wipro, TCS and HCL Technologies, among others as Indian nationals comprise nearly 70% of the 85,000 H1-B visas granted to foreign workers by the US government every year. TCS and Infosys' exposure to H-1B visas is at 40-50 per cent, while Wipro and HCL Tech's at 30-35 percent. As per the Department of Homeland Security, the new rules are aimed at ensuring the companies employing H-1B workers don't worsen the economic damage done to the US economy by coronavirus.

Also read: Donald Trump suspends H1B, H4 visas for rest of 2020