US President Barack Obama shocked many countries including Indian companies and business investors who have a huge talent pool that travels every year to the US to work for companies that are based in India and abroad. This is a part of the ‘Consolidated Appropriations Act 2016’ which contains within its pages an omnibus fund which will run the US Federal Government up to the 30th of September, 2016. Signed is a colossal spending package of 1.8 trillion US Dollars, which includes within its pages the new fee hike for H1-B and L-1 visas. Changes have raised the fee for H1-B visa application to US$ 4000 and the fee for the L-1 visa application is much more at US$ 4500. This means that Indian IT companies need to shell out between UD$ 8000 to UD$ 1000 per H1-B Visa from April. Earlier the free stood as US$ 325.
Feel the prick of the fee hike
Companies already feel the prick with the currency exchange gap widening, but the raised amount will put a huge dent in the spending budget of many IT companies, which in turn will affect international experience of many skilled individuals. In addition to these heavy charges, there are also attorney fees, Prevention and Defection fee, Employer Sponsorship fee, and Medicare and Social Security. These companies rely, especially on the non-refundable H1-B visa to send their employees to the US. There are a lot of adverse reactions from the industry who say that the text is discriminatory as the fee would have to be born by only major IT companies. The L-1 visa, which is much less popular, will also feel the pinch as it is directed to the Intra company Transferees who are in the top bracket of international immigrants. This visa targets the executives, managers and of ‘specialized knowledge’ employed by foreign business entities. Its targets are direct employers of US workforce, by investing in a new business or branch related to US businesses.
Who will be affected?
This price tag which comes into effect from the 1st of April, 2016, will be levied on companies that have more than 50 employees and having more than 50 percent of its workforce on the H1-B visa in the US.
Reactions from IMF
The bill was approved and signed in by the International Monetary Fund (IMF) in 2010, but was stonewalled till now as it could not get the essential signature to pass through the US Congress. IMF Managing Director, Christina Lagarde said this bill will help it control a lot more of the financials with the IMF playing a secondary role of supporting the stability of the fragile global financial structure.
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Original Source:Financial Express