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Trump plan to nix H-1B visa lottery may hit small vendors

Venkatesh Ganesh Mumbai | Updated on October 30, 2020 Published on October 30, 2020

New wage-based system will make it hard for entry-level techies to get visa

US President Donald Trump’s proposal to do away with the computerised lottery system for skilled work visas could make it difficult for entry-level techies to get an H-1B visa. This, in turn, will make it costlier for small-size Indian software exporters to send workers to the US.

The new system aims to introduce a wage-level-based selection process instead of the current system of selection of visas from a common pool, regardless of wage specifications.

Priority for higher paid

At present, every year 85,000 visas are up for grabs and divided into four categories — L1, L2, L3 and L4.

Typically, an L1/L2 level worker has work experience of 2-5 years and an L3/L4 level worker 5-10 years. For FY20, 26,140 H-1B visas were in level-1 and 44,530 in level 2. Level 3 and 4 accounted only for 8,622 and 3,608, respectively. The new wage-based system will change this around in a way that those who get paid higher would get priority.

“The US government has not yet published the modalities of how this will be implemented, but there is a possibility that this could be done using algorithms that select registrants with high salaries,” said Poorvi Chothani, Founder and Managing Partner of LawQuest, a global immigration law firm.

To hit small players

This, combined with the earlier policy increasing wages of skilled visa workers, will hit smaller players. “Technology jobs are available but I cannot afford to pay $170,000 annually now, instead of $100,000 earlier. It is not possible to fill those positions at this kind of wage structure,” said a CEO of a small software exporting company.

IT companies did not want to officially comment on the issue, as they are waiting for clarity from the Trump administration. However, industry watchers say this could eventually result in Darwin’s “natural selection” theory.

Larger IT firms may not get impacted as they are already increasing their local hiring in the US. TCS, Infosys, HCL Tech and Wipro have, on average, locals as 50-65 per cent of their international workforce.

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Published on October 30, 2020
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