H-1B Visa Changes: What is the H-1B Visa Program?
It was announced last month that President Trump signed a new executive order, which has instructed federal agencies to review and make changes to the H-1B visa program to attract skilled foreign workers.
The H-1B visa program has fallen under scrutiny over the recent years as criticism built over companies abusing the ruling by hiring cheap, foreign workers instead of looking for homegrown professionals first. The current supporters state that it offers well-needed assistance to sectors where companies struggle to employ skilled American workers. Following Trump’s new changes, we take a look at what the H-1B visa program is and what the new policy alterations mean.
What is the H-1B Visa Program?
The visa program grants temporary visas to foreign workers who have specialist skills. All of these H-1B holders are then classed as “non-immigrants” who are not expected to permanently live in America. What this mean instead is that they are given access as a guest worker hired for the positions that US businesses are having difficulty hiring for – the equivalent to the Tier 2 Visa in the UK.
Each visa is valid for 3 years at any one time, and it can only be renewed once for another 3 year period before works must leave the US for a minimum of a year. The demand for the visa has overshadowed supply and therefore are awarded based on an annual lottery system.
Current US citizenship and Immigration services grant 85,000 in skilled visas every year – 65,000 are given to foreign workers who hold a bachelor’s degree, and the other 20,000 is given to people who have earned a master’s degree or higher in America. This year, the US received 199,000 H-1B applications within five days, the fifth year in a row the visa cap was exceeded in a week or less.
During Trump talks in April, he criticised the “totally random” lottery system, saying the visa system must ensure that only the most skilled, highly paid workers are allotted such visas — and never at the expense of American labor.
Who Applies for These Visas?
Most of the people that apply for this type of visa typically work in the science, technology, engineering and math sectors, however, H-1B visas are used for a variety of other workers including teachers, journalists, and models.
These applicants also overly hail from India and are typically sponsored by Indian outsourcing firms. Three companies that have spiked interest over the recent years are Tata Consultancy Services, Wipro and Infosys, with comments coming from the US media as well as the White House over the fact that they take a strong share of the restricted availability of the H-1B visa programs.
So Why Does The H-1B Visa Cause a Stir?
As briefly mentioned above, the program was designed to attract skilled labor and talent, which has been deemed as being in a shortage within the country’s workforce. The tech epicentre of the globe, Silicon Valley, have been highly vocal about their support for the system, stating that it is crucial for growing sectors that need innovation and creativity.
The other side of the argument is that critics believe the visa is being abused by companies to employ cheaper foreign labor instead of more expensive American nationals. Under US federal regulations companies must show that the individuals who they hire are not displacing Americans, however, there is a loophole that exempts them from this rule is the foreign workers are given a salary of at least $60,000 per year. As the majority of American tech positions earn higher salaries than $60,000, companies can then hire foreign workers at lower salaries, not triggering a breach in the visa program. The White House last month reported that a full 80% of H-1B workers are paid less than the median wage for workers in their fields.
President Trump has avidly opposed the H-1B visa’s since the early days of his campaign, stated last year that, “The H1B program is neither high-skilled nor immigration: these are temporary foreign workers, imported from abroad, for the explicit purpose of substituting for American workers at lower pay…I will end forever the use of H1B as a cheap labor program, and institute an absolute requirement to hire American workers for every visa and immigration program. No exceptions.”
A research paper, which was conducted recent discovered that companies’ using these visa between 1994 and 2001 kept wages down by up to 5.1% and employment of US down by up almost 11%, even while it created a positive effect on the country’s economy and corporate profit.
So What Are The Implications of The Program Changes?
As you may have gathered from the above, Indian workers will be hit the most by Trump’s new restrictions to the program, with many corporate leaders and politicians have already spoken out about the fact that it would restrict their use. “The H-1B visa system exists specifically because the US has a persistent shortage of high-skilled IT talent,” India’s National Association of Software and Services told the Times in a statement. Indian lawmakers have recently sought to lobby the US government on behalf of their IT firms, in addition, they also met with commerce secretary Wilbur Ross to dispute the fact that Indian workers in the US enhance their firms’ level of competitiveness.