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Tags Current Affairs

US job curbs on H1B holders

Date: 07 August 2020 Tags: Miscellaneous


US President Donald Trump has signed an executive order barring federal agencies from hiring H-1B visa holders and other foreign workers in place of US citizens or green cardholders.



According to data from the US Department of Labour, of 65,000 new visa applications approved every year, an average of 1,800 to 2,000, or roughly 3%, are H-1B visas granted to workers employed by federal agencies.



  • To keep costs in check, federal agencies in the US — and various other countries — either hire a large number of foreign workers or outsource their back-end database updation and other jobs to business process outsourcing firms from around the world.

  • Such jobs in developed countries pay minimum wages, which are not lucrative enough for employable individuals in these countries.

  • Apart from workers hired by federal agencies, the executive order will also impact workers of Indian companies that are on contract with federal agencies.

  • Bigger federal agencies such as state-run banks give the contract for supply and maintenance of their databases and other services to bigger Indian companies such as Infosys, TCS, or Wipro.

  • The order is particularly coming at a time when there is a huge shortage of STEM skills in the US that workers on short-term non-immigrant visas like H-1B and L-1 will help bridge.

  • The heads of departments will undertake an audit of these contracts and subcontracts, and check whether the jobs could have been performed by US workers, and whether opportunities for domestic workers were impacted by such hiring.

  • Ever since Trump became President in 2016, the US government had started moving towards a more conservative work visa regime, alleging that Indian and Chinese IT companies had been sending workers at very low cost, which hurt the prospects of skilled workers in the US.

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