Effect of H1B visa suspend on students and employees

A quick glance

H1B visa is a non-immigrant visa

H1B visa suspended

Impact on Students and Employees

What is H1B VISA

An H1B visa is a non-immigrant work visa which is specified to students and employees in order to allow US companies to temporarily employ the foreign workers in some of the occupations like- information technology (IT), finance, accounting, architecture, engineering, mathematics, science, medicine, etc. bearing

specialized knowledge and a bachelor’s degree or equivalent work experience in the defined area.

Someone who is desperate to work in the US can only opt through an H1B visa, one needs to gain employment from a US employer who is willing to sponsor into the US.

Initially, it is for three years but can be extended for an additional three years. In total valid for six years.

Reason for Suspending H1B Visa

Donald Trump suspended H1B visas, with the outburst of coronavirus pandemic, in view of the massive unemployment in America. He had also declared that visa holders already in the country are unlikely to be affected only the new visas are barred till the suspension is lifted.

India and China are highly populated counties, so the technology companies in the US depend on these countries in hiring tens of thousands of employees each year.

Effect on Students and Employees

H1B visa suspension by the Trump administration is likely to have an unfavorable crash on thousands of Indian IT professionals. Already a large number of Indians on the H1B visas have lost their jobs and are headed back home during the coronavirus pandemic. As many as 500,000 migrant workers are employed in the US on an H1B visa eminence.

White House spokesman Hogan Gidley said, still the White House administration is considering various proposals. They are currently evaluating a wide range of options, with the prior understanding by career experts, to protect American workers and job seekers, especially disadvantaged and underserved citizens.

Donohue, the President, and CEO of the United States Chamber of Commerce wrote in a letter to Trump, the matter is under consideration because once the economy rebounds, American businesses will need assurances that they can meet all their workforce needs with respect to talent both domestically and from around the world.

The president’s immigration advisers are depicting up plans for an upcoming executive order that would ban the issuance of some new temporary, work-based visas.

This order will mainly focus on visa categories including H1B, designed for highly skilled workers, and H2B, for seasonal migrant workers, as well as student visas.

Still, the administration officials have not reached to any collective verdict; it could also happen for the suspensions of entire visa categories for at least the next year 2021 or until unemployment figures return back to normality in the country after the hardest-hit by this coronavirus pandemic.

United States is badly hit by this COVID-19 pandemic where more than 33 million Americans have lost their jobs in the past two months.

The US economy has reached a standstill, not only this it is also assumed by the White House officials that the country’s economy is likely to grow at negative 15 to 20 percent in the second quarter.

According to the US Bureau of Labour Statistics, the latest monthly jobs report released on May 8, 2020, the unemployment rate reported in the month of April was at 14.7 percent which was the highest rate and the largest increase in American history.

How H1B visas suspension will hit Indian companies

The US has blocked H1B visas and certain other non-immigrant worker visas till the end of the year 2020.

The White House said in a press note, popular work visas H-1B and H-2B, and certain categories of H-4, J, and L visas shall also remain suspended until December 31, 2020.

The H1B visa suspension will affect the most popular Indian IT companies. The US government has a ceiling of 85,000 total H1B visas for consecutive years. In which 65,000 H1B visas are issued to highly skilled foreign workers, while the rest 20,000 H1B visas can be additionally allotted to highly skilled foreign workers who have a higher education or master’s degree from an American university.

Impact on Indian IT companies

The Indian IT sector is amongst the biggest beneficiaries of the US H1B visa system, the IT companies since the 1990s captured a lion’s share of the total number of visas issued each year.

The statistics of April 1, 2020, reveals that the US Citizenship and Immigration Services (USCIS) had received about 2.5 lakhs H1B work visa applications as per the official data. The Indians’ applications were 1.84 lakhs or 67 percent of the total H1B work visas for the current financial year ending March 2021.

In addition to the suspension of these work H1B visas, one of the orders signed by Trump has also made extensive changes to the H1B work visa norms, which will no longer be decided by the currently established lottery system. The new standards will only favor highly-skilled workers who are already paid the highest wages by their respective companies.

This will automatically result in a significant impact on margins and worker wages of Indian IT companies which anyhow sends thousands of low-cost employees to work on client sites in the US.

Anyhow, a revolution has brought by the large Indian IT companies by cutting down their dependency on H1B visas and other worker visas by appointing as much as 50 percent of staff locally; but still depends on these visas to keep costs in check.

One of the major impacts would be that Indian IT companies also offer subcontracts to Indian nationals already present in the US with valid H1B visas. Bangalore-based Wipro spends as much as 20 percent of its revenue to subcontract Indian workers with valid H1B visas, which will also be affected largely now.

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