Everything you need to know about the H-1B visa and the proposed reforms

If passed, the reform bill for the High-Skilled Integrity and Fairness Act of 2017 – which overhauls the H-1B visa and L1 visas – will significantly modify the way companies, and consequently employees, are granted the visas. Companies, including Indian ones, use the H-1B visa to fill jobs with foreigners when an American cannot.  In case you were wondering, here’s the download on the scenario and the new reform bill:

What is the ‘H-1B visa’?

When companies are unable to find an American employee for a specific job, the H-1B visa – a non-immigrant visa – allows that company to employ foreigners for a period of up to 6 years. Employees holding an H-1B visa must earn a minimum salary of $60,000 per year, and these visa holders can also apply for permanent residency and buy or sell property in the US.

The US government grants 65,000 H-1B visas every year, plus 20,000 H-1B visas for foreign students who may have completed their master’s at a university in the country. However, under the Free Trade Agreement the US has with Singapore and Chile, an extra 5,400 and 1,400 H-1 B visas are granted, respectively.

How does one get an H-1B visa?

In the technology industry, the H-1B visa is highly coveted; hence, the US receives much more than its maximum – 85,000. In 2016, H-1B visa applications reached 236,000, and grants were made through a lottery.

What does the reform bill propose and what is Donald Trump’s take on it?

The reform bill proposes increasing the minimum salary to more than double, i.e., from $60,000 to $130,000. This leaves companies with two choices: favor American citizens over foreign employees or pay a premium for suitable foreign workers. Also, the lowest-pay category is removed, raising the salary level at which H-1B-dependent employers are exempt from non-displacement and recruitment attestation requirements to more than $130,000.

The ‘per country’ cap for employment-based immigrant visas is removed from the H-1B visa. To ensure that small businesses have an opportunity to compete for high-skilled workers, a 20% of the annually allocated H-1B visas for small companies and startups (50 or fewer employees) has been set aside.

While a Democrat, California Congressman Zoe Lofgren, has tabled the H-1B visa reform bill and Donald Trump has not publicly spoken about the law yet, the H-1B visas and L1 visas were greatly discussed among his campaign promises. He has, however, time and again gone back and forth on the program. The US first lady, Melania Trump also entered the US using a H-1B visa from Slovenia under a quota for fashion models ‘of distinguished merit and ability.’

If it passes, who will be impacted by the H-1B visa reform?

Indian IT firms such as Infosys, TCS, Wipro, HCL, Igate, and other global players like IBM, Accenture, Microsoft, Google, Amazon, and the like are among the largest recipients of the H-1B visa each year. Therefore, if the bill passes, companies like these might have to bear significantly higher costs to employ highly skilled foreign citizens. A supply-and-demand gap could also emerge for talent in smaller companies that may not be able to afford the high costs of hiring skilled workers.