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US Senators float bill to log out ‘ally’ India’s IT industry

A bipartisan group of eight US Senators, known as the gang of eight, has come out with eight killer provisions in its comprehensive immigration reform bill which if passed by US Congress and signed into law by President Obama, may prove detrimental to the interests of major Indian IT companies. India’s Ambassador to the US Nirupama Rao has already flagged the concerns of the Indian companies on the proposed immigration reforms in her meeting with top Senator Senator Robert Menendez. The US India Business Council and Confederation of Indian Industry have said that this is against the spirit of ‘Indo-US strategic relationship’.

The first killer provision in the Comprehensive Immigration Reform Bill is the ban on client site placement for H-1B Workers. Under this, any H-1B dependent employer (a company with more than 15 per cent of its workforce on H-1Bs), would be flatly prohibited from placing H-1B workers at client sites or contracting for the services of those workers.

Secondly, the bill proposes new restrictions on client site placement for L-1 workers. As a result of this, an Indian IT company would not be able to place L-1 workers (whether specialised or managerial) at client sites (the US company) unless the company supervises and controls those workers and the parent US company attests that for 90 days before and after the L-1 petition filing, it had not laid off any employees in the same area performing similar job duties.

Third, the bill places a limit on the total percentage of H-1B and L-1 workers that can make up a company’s workforce in the US. Being enforced in three phases, the limits would be no more than 75 per cent from October 1, 2014 to September 30, 2015; no more than 65 per cent from October 1, 2015, to September 30, 2016, and no more than 50 per cent from October 1, 2016 onwards.

The fourth killer provision is said to be the proposed further increase in certain categories of H-1B visas that is targeting Indian IT companies. A company with more than 50 per cent H-1B or L-1 workers currently pays an additional fee of $2,250 for L-1 petitions and $2,000 for H-1B petitions. Under the comprehensive immigration bill proposals, the additional fee would rise to $5,000 beginning in fiscal 2015 through 2024 for employers with more than 30 per cent and less than 50 per cent H-1B and L-1B workers. For fiscal year 2015 through 2017, there would be a $10,000 fee for employers with more than 50 per cent and less than 75 per cent H-1B and L-1B workers.

‘The Unworkable Intending Immigrants Exception’ is said to be the fifth killer provision of the bill. ‘Intending immigrants’ is defined as those employees for whom the green card process had been started by the company, would count as US workers and would not count toward the H-1B or L-1 population for purposes of determining percentages.

The subsequent required wage increases is considered to be the sixth killer provision of the bill. Under the proposals, H-1B dependent employers would have to pay H-1B workers no less than the mean wage for the occupation, even if the role is entry-level.

The seventh killer provision is the H-1B recruitment and job offer requirements of the bill, under which prior to filing any H-1B petition, an Indian IT company would be required to recruit for US workers using industry standard recruitment as well as posting on a DOL website, and it would be required to offer the job to any equally or better qualified US worker at the same rate it would have to pay the H-1B worker.

Under this the US Department of Labor would have authority to review hiring decisions, and the Indian IT companies would need to be able to justify on an applicant-by-applicant basis why individual US worker applicants were not equally or better qualified than a particular H-1B worker.

Finally the significant expansion of government audits and enforcement authority is considered to be the eighth killer provisions under which the Department of Labor would be required to conduct annual compliance audits of all H-1B dependent employers. Not only this the Department of Homeland Security would be required to conduct annual audits of all companies with a workforce with more than 15 per cent of workers in L-1 status.
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