NASSCOM says that proposed H1-B visa modifications will be a test for firms in India

The proposed amendments to the H1-B visa that seeks to double the minimum salary to $130,000 from the existing $60,000 will be a trial for Indian It sector, according to National Association of Software and Services Companies. The legislation seeks to restrain the rate of overseas immigrants being recruited for the high skills jobs and facilitating the hiring of US nationals to these jobs.

NASSCOM has also said that Lofgren bill has several loopholes that will defeat the very purpose of saving the jobs for the US citizens while also creating issues for the Indian IT sector, as quoted by the Indian Express.

The present of NASSCOM R Chandrasekhar has said that as the basis for legislation is to secure job opportunities for the US citizens, it is more prudent if they wisely analyze the situation keeping in mind the skills shortage faced by the US.

The High skilled integrity and fairness act has considered the scheme of market-base for allocating visas to firms that agree to pay twice the salary as calculated by a survey. The bill, however, does not consider and treat equally all the IT service firms with H1-B visa staff and the provisions are more in favor of firms dependent on H1-B visas. The increase in salary would have a drastic effect on other sectors such as the engineering, life science sand nursing, said NASSCOM.

As the issue is quite sensitive and the fact that legislations in the US have to pass diverse stages prior to enactment the IT firms chose to not to express their views as of now.

Research analyst for institutional equities at brokerage house Prabhudas Lilladher, Madhu Babu has said that legislation takes an average of 260 days to be enacted as a law in the US. But the major concern that will be highlighted in the bill would be the comparatively lower salary paid by the Indian IT companies when evaluated with the firms in the US.

The bill seeks to give preference to firms that are willing to pay higher salaries and this will benefit larger firms such as the Google and Apple that pay very high salaries when compared to their counterparts in India. These companies hire a very top level skilled staff via the H1-B visas and these large companies will be at the advantage as per the proposed amendments. Thus the elimination of draw system and introducing market-based salary measure for allocation of visas will be a serious hazard, explained Babu.

IT firms in India are the ones that highly utilize the H1-B visas allocated by the US. TCS is the top beneficiary with 4,674 fresh visas in 2015. The IT industry experts have expressed their opinion by saying that he It firms in India will be forced to consider the alternatives of recruiting local talents in the US to manage the increase in costs.

Tax partner at Ernest and Young India, Surabhi Marwaha has said that while with the perspective of the firms in India this could imply that the salary limits will have to be almost doubled, with the perspective of the US firms it will imply that the scarcity of talents will continue to exist.

The Indian firms will have to consider several options at cost cutting including hiring more local talents. They will also have to create a mixed pattern of on-site and off-site recruitment with the analysis of costs and benefits for recruitment to the US firms, added Marwaha.