New H1B Visa Rules Will Harm American Economy: NASSCOM

NASSCOM says that the new H1B visa rules would harm rather than protect American jobs and workers. In a detailed statement, NASSCOM said “changes announced to the H1B visa program will restrict access to talent and will harm the American economy, endanger US jobs, put US interests at risk, slowing down R&D into solutions to the COVID crisis. It is important for the U.S. market to be able to access skilled talent for its businesses, especially during the COVID recovery phase.

The new rules notified by the Department of Homeland Security (DHS), and the Department of Labor (DoL) for the H-1B visa regime, changes the definitions of specialty occupation, employer, and employee-employer relationship, and limits the validity of an H1B visa to one year for a worker placed at a third-party worksite; it also increases enforcement and investigations for these visas. The new rules also changes the current four-tiered prevailing wage system for jobs that US employers seek to fill with foreign workers. Both rules will be issued as Interim Final Rules (IFRs), without any notice period or right to comment, added NASSCOM.

The Trump administration introduced certain reforms in the H1B Visa that “will increase earnings and standards of living for US workers. It also will level the playing field by reducing incentives to replace similarly employed US workers with a low-cost foreign alternative.” This move will subsequently lead to fewer American companies opting for foreign workers as the entry-level wage requirement has been raised to 45 percentile from 17 percentile.

“These regulations seem to be based on misinformation about the program and runs counter-productive to their very objective of saving the American economy and jobs. This is particularly relevant at a time when US businesses continue to face a huge deficit of STEM skills: overall US unemployment rate grew from 4.1% in Jan-2020 to 8.4% in August-2020; while unemployment in computer occupations declined from 3% to 2.5% in this period. In the 30-day period ending 28th September 2020, there were over 652,000 active job vacancy postings advertised online for jobs in computer occupations: up from 625,000 vacancies in the 30-day period ending 13 May 2020. That is, despite high degree of overall unemployment in US, demand for high-tech skills continues to remain robust – clearly endorsing the argument that there are just not enough workers with relevant skills to fill them. The new rules announced will worsen this talent gap by making it more difficult for US employers to hire foreign workers,” said NASSCOM.