A proposed US immigration reform bill, set to be unveiled tomorrow, will likely contain a significant increase in the number of skilled workers allowed into that country.
The move would be a boon to talent-starved American tech companies, but could punish foreign firms - particularly the large Indian service providers with operations in the US that currently employ large numbers of foreign IT specialists.
The bipartisan legislation is said to include a nearly 70 per cent increase in the number of H1-B visas. If approved, the bill would boost the number of skilled foreigners allowed to work in the US for up to six years from 65,000 to 110,000 annually. Many are employed by the IT industry.
That number would gradually climb to 180,000 in coming years, if the bill is approved in its current form.
The immigration reform measure comes with some caveats for employers, however. US-based companies would need to prove that they have advertised open positions in an attempt to attract American workers before applying for H1-B visas.
When they are allowed to bring in foreign help, they must pay the foreign workers salaries commensurate with the typically higher US pay scale, something previous work visa rules did not address.
The proposed legislation is the work of eight senators: Michael Bennet (Democrat, Colorado), Richard Durbin (Democrat, Illinois.), Jeff Flake (Republican, Arizona), Lindsey Graham (Republican, South Carolina), John McCain (Republican, Arizona), Robert Menendez (Democrat, New Jersey), Marco Rubio (Republican, Florida.) and Charles Schumer (Democrat, New York).
Struggling with a growing skills gap and bogged down with unfilled IT jobs, technology companies have lobbied hard for several years for an increase in the H1-B visa quota. The proposed changes come at a critical time for technology-dependent US businesses and the IT services providers that serve them.
A recent study by CompTIA saw 80 per cent say the lack of or shortcomings in IT skills of their staff are hurting operations and their ability to capitalise on new revenue opportunities.
Forty-one per cent say IT skill gaps are impeding staff productivity. One-third of the participants say customer service and engagements are hurt.
And 34 per cent say their time-to-market with new products and services is impaired. The impact is felt in businesses' wallets, with 23 per cent of SMBs and 15 per cent of mid-market and enterprise businesses reporting their profits suffering.
Not everyone is so thrilled with the proposed immigration changes, however. In addition to its requirements for higher wages for what had traditionally been seen as a ready source of skilled tech workers willing to accept low pay, the senate bill also includes dramatic restrictions on H1-B visas for companies that employ too many temporary foreign workers.
Under the new rules, companies with workforces comprised of more than 30 per cent H-1B visa holders would be forced to pay new fees. Moreover, starting next year, any company with a workforce of more than 75 per cent H1-B workers will be banned from applying for new work visas.
That number drops to 65 per cent in 2015 and 50 per cent in 2016, according to sources familiar with the contents of the draft bill.
Such restrictions would hit the large Indian IT outsourcers hardest. Lower wages and a ready pool of skilled workers have traditionally motivated firms like Tata Consultancy Services, Infosys and Wipro to hire large numbers of workers from their home country to work in the US.
In a letter to the eight senators signed on the immigration reform bill, Ron Somers, president of the US India Business Council said his organisation's greatest concern "centres on proposals that would preclude access to visas or impose unworkable visa-related restrictions and fees on a company's ability to sponsor H-1B ... visas based upon their business model or the composition of its local workforce."
As part of our special editorial partnership, CRN is republishing this article from Channelnomics
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