Indian ambassador to US warns of retaliation if H-1B reforms go ahead

The new Indian ambassador to the United States, Subrahmanyam Jaishankar, has told journalists that India is concerned at possible immigration reform legislation in the US that would make it more expensive for international outsourcing firms to apply for H-1B visas.

Mr Jaishankar told the AFP news agency that there could be tit-for-tat reprisals against US trade interests in India. He said that if the US Congress made it more difficult for Indian outsourcing firms to work in the US then he would be less likely to help American companies with problems in India.

He said that, if the law on H-1B visas was changed and 'Then tomorrow if an American company comes and says, 'You know, we've got this set of problems,' the temptation for me is to say, 'I'm out for lunch'.

Specialty occupation

H-1B visas are US temporary work (non-immigrant) visa. They allow foreign nationals, educated to bachelor's degree level, to work in the US in 'a specialty occupation'. H-1Bs usually last for three years and can be renewed once.

They are also 'dual intent visas' which means that you can have the intention to apply as a US temporary worker the H-1B and, at the same time, have an intention to apply for lawful permanent resident status.

This means that you can apply for an adjustment of status to lawful permanent residence under an employment based immigration scheme. However, coming under an employment based immigration scheme in the first place is not necessarily that easy.

Outsourcing companies

Many H-1Bs have, in recent years, been used by international outsourcing companies. In 2012, some 20% of H-1Bs went to four outsourcing companies.

Some US Congressmen fear that the H-1B allows outsourcing firms to compete unfairly by employing cheap foreign labour at the expense of more expensive US workers. This is denied by outsourcers who say that H-1B workers must be paid the going rate for the job.

In June 2013, the US Senate passed a comprehensive immigration reform bill; The Border Security, Economic Opportunity and Immigration Modernization Act, (The Border Security Act).

Increase in number of H-1Bs

If it became law, it would increase the number of H-1B visas available from the current level of 85,000 to 115,000 per year immediately. It would also provide that, in times of high demand, the quota could rise as high as 180,000.

However, on the downside, from an Indian perspective, visas for 'H-1B dependent employers' will become much more expensive.

The current base filing fee for an H-1B is $325 though there are many other fees that can increase the cost to $5,000 each. If the Border Security Act becomes law then the base filing fee, exclusive of other fees would rise to

  • $5,000 per visa for firms with over 50 staff where between 30 and 50% of the company's staff are foreign temporary workers (with H-1B or L-1 visas)
  • $10,000 per visa for firms with over 50 staff where over 50% of staff are foreign temporary workers

Firms' H-1B allocation to be reduced

Firms where over 75% of staff are temporary foreign workers would not be allowed to apply for H-1Bs or L-1 visas at all. This maximum level would be reduced to 65% in 2015 and 50% in 2016.

Mr Jaishankar told AFP 'We think this is actually going to be harmful to us. It would be harmful to the American economy and, frankly, it would be harmful to the relationship [between India and the US]'.

Mr Jaishankar says that he has raised the issue of the H-1B visa with 25 Congressmen since he arrived in Washington in December.

Gridlock

It may yet be that a diplomatic crisis is averted not because of Mr Jaishankar's diplomatic skill but because of the 'gridlock' in the US political system.

Since 2009, the two main political parties in the US; President Obama's Democrats and the right—wing Republicans, have agreed about almost nothing. In 2009, a radical, grass-roots, right-wing movement, the Tea Party, has become a major power broker in the Republican Party.

As a result, many more hard-right wing Republican Congressmen and women have been elected.

Tea Party Republicans

These Tea Party Republicans vote against almost any bill that is supported by the Democrats, almost as a point of principle.

To become law in the US, any bill must be passed by both houses of Congress; the Senate and the House of Representatives. The Border Security Act has been passed by the Senate, in which the Democrats hold a narrow majority.

But the House of Representatives (or 'the House' as it is known) is narrowly controlled by the Republicans and many Representatives are supporters of the Tea Party. They have made it known that they will never support the Border Security Bill.

Boehner has denied House a vote on reform

So far, the Republican speaker of the House, John Boehner, has refused even to allow a vote on the bill.

And so, it seems that, for now at least, Indian outsourcing companies will not be hit with an H-1B price hike and Mr Jaishankar can continue to help US companies, even in his lunch break.

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