News

US scraps changes to H-1B visa rules

Forum Gandhi Mumbai | Updated on May 20, 2021

Trump curbs would have shaved off I-T firms’ profit margins by up to 5.80%, hit mid-tier firms most

In a huge relief to Indian IT service companies and techies, the Biden administration has scrapped changes to H-1B visa rules introduced by the Donald Trump administration in October 2020.

Though the Trump-era regulation never took effect due to a federal court ruling, the US government has formally rescinded it and reinstated long-standing H-1B eligibility criteria.

The rules would have revised the definition of “specialty occupation,” placed new restrictions on the placement of H-1B workers at third-party work sites and reinstated contract and itinerary requirements.

It also restructured the prevailing wage system for H-1B, resulting in significantly higher costs for Indian IT companies.

Trump rules put to rest

“The Department of Homeland Security has formally vacated a regulation that would have redefined the H-1B specialty occupation, restricted offsite placement of H-1B employees, and otherwise increased employer compliance obligations. By reinstating the prior regulatory language, the DHS is putting to rest the Trump-era regulation. However, the Biden Administration may propose its own regulatory changes to the H-1B program in the future,” stated US immigration law firm Fragomen.

According to an ICRA report, amendments to the H-1B visa rules would have shaved off Indian I-T companies’ profit margins by up to 5.80 per cent and impacted the mid-tier players the most. Changes in wage rules alone would have resulted in a 20-30 per cent increase in wage costs. Poorvi Chothani, founder and managing partner of immigration law firm LawQuest said, “Many IT jobs were being challenged as a non-specialty occupation. For an H-1B visa holder, the job must be a specialty occupation which means the skills for the job require a bachelor’s level of education. IT jobs were often being challenged by stating that one did not require a bachelor’s degree. Those challenges are expected to reduce now.”

Experts said that other sectors like the hospitality industry, arts and design industry along with the IT sector will gain from the scrapping of the rules.

Sonam Chandwani, Managing Partner at KS Legal and Associates said, “The Trump era threatened the American Dream of several Indians. Therefore, this announcement comes as the light at the end of the tunnel. It certainly would please the Indian IT companies.”

Published on May 19, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor