New bill proposes to bar companies that have over 50 employees and fifty percent of them on H1-B, L1 visas, from hiring more and encourage recruitment of American workers.

In yet another move to recast the H-1B and L1 visa programmes that allow thousands of Indian skilled workers to move to the U.S, two U.S lawmakers have introduced a new piece of legislation in the House of Representatives.

The new bill proposes to bar companies that have more than 50 employees and fifty percent of them on H1-B, L1 visas, from hiring more. The bill will encourage companies to recruit American workers. The bill proposes new wage requirements for H-1B visa-holders and establishment of wage requirements for L1 workers. The bill, if passed into law, will also provide more authority to the Departments of Homeland Security and Labour to investigate fraud and abuse in the H-1B and L-1 programs.

List of rights for visa-holders

The visa-holders will be given a list of rights to protect them from exploitation, according to the proposed bill, Representatives Bill Pascrell and Dana Rohrabacher said in a statement.

The bill echoes concerns that critics of the H-1B, L1 visas have been raising for years -- that companies are using the programmes to undercut American workers; that they are replacing American workers, a practice the existing guidelines prohibit. Companies are also accused of exploiting workers on visas. The same members had moved a similar bill in 2010 also, but such proposals have not gained enough momentum until now, to be passed into law.

‘50-50’ formulation

The ‘50-50’ formulation – companies with more than 50 employees that have 50 per cent of them on visas – specifically target Indian companies in effect, and less Indian workers. For instance, Facebook, Google or Microsoft will continue to be able to hire workers on visas until 50 per cent of their employees are visa holders.

But Indian companies such as Infosys, Wipro or TCS that already have more than 50 per cent of their employees on visas could be prevented from hiring more. Last year, when additional visa fees were introduced for H-1B and L1 categories, the ‘50-50’ provision -- as it has come to be called -- made it applicable primarily to Indian companies.

Therefore, this year, on each H-1B visa, an Indian company paid nearly $5,000 more than an American company. Also, an American start-up, which usually has less than 50 employees, can run its entire operation by hiring people on visas.

Foreign outsourcing firms top users

“Foreign outsourcing companies are the top users of the H-1B and L-1 visa programs. Over the years a number of concerns have been raised about how certain companies have been using these visa programs,” Mr. Pascrell said.

Outsourcing of American jobs becomes a live topic during elections, and in the past, John Kerry and Barack Obama have spoken against it. But there has never been a move that actually restricted the visa regime, though the visa processing fees has been going up. But the cap of 85,000 has remained constant for several years now. Of this, 20,000 are reserved for U.S-educated applicants.

Cap may not go up in future

Given the political sentiment, what is clear is that the cap is unlikely to go up in future, and Indian companies are on a drive to ‘localise’ their workforce, representatives of several firms told The Hindu. No company offered specific figures, but a TCS spokesperson said the company is among the “top three recruiters of local IT talent in the USA for the last five years.”