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Tags Current Affairs

US suspends H1-B visas

Date: 25 June 2020 Tags: Miscellaneous

Issue

The US administration has said it was extending the 60-day ban on immigration and non-immigrant worker visas till the end of 2020.

 

Background

 Popular work visas including the much-coveted H-1B and H-2B, and certain categories of H-4, J, and L visas shall also remain suspended until December 31.

 

Details

The move was to protect domestic workers who had been impacted due to a contraction in the economy in the wake of the Covid-19 pandemic.

 

 What are work visas?

  • In order to fill a vacuum of highly-skilled low-cost employees in IT and other related domains, the US administration issues a certain number of visas each year which allows companies from outside the US to send employees to work on client sites.

  • The H-1B remains the most popular among Indian IT companies. The US government has a cap of 85,000 total H-1B visas for each year.

  • Of this, 65,000 H-1B visas are issued to highly skilled foreign workers, while the rest 20,000 can be additionally allotted to highly skilled foreign workers who have a higher education or master’s degree from an American university.

  • H-1B: Person is Specialty Occupation: To work in a specialty occupation. Requires a higher education degree of its equivalent. Includes fashion models of distinguished merit and ability and government-to-government research and development, or co-production projects administered by the Department of Defence.

  • Apart from the H-1B visas, the US government also issues L1 visas which allow companies to transfer highly skilled workers to the US for a period of up to seven years. H-2B visas allow food and agricultural workers to seek employment in the US.

  • Since it was started in 1952, the H-1 visa scheme has undergone many changes and revisions to allow or disallow certain categories of skilled workers in the US, depending on the economic situation of the country.

  • It has since often been criticized for sending low-cost workers to the US at the expense of domestic workers.

 

Impact of visa suspension

  • The processing of all new H-1B, H-2B, J, and L visa categories stand suspended. This means those who do not have a valid non-immigrant visa as of June 23 and are outside of the US, will not be allowed to enter the country until December 31.

  • H-1B, H-2B, J, and L visa holders, and their spouse or children already present in the US shall not be impacted by the new worker visa ban.

  • Indian IT companies are amongst the biggest beneficiaries of the US H-1B visa regime and have since the 1990s cornered a lion’s share of the total number of visas issued each year.

  • This could result in a significant impact on margins and worker wages of Indian IT companies which send thousands of low-cost employees to work on client sites in the US.

  • Though the large Indian IT companies have cut down their dependency on H-1B and other worker visas by hiring as much as 50 percent of staff locally, they still rely on these visas to keep costs in check.

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