New US Work Visa Regulations To Hit Indian IT Companies Badly

on August 22 2012 6:59 AM

The U.S. Department of Labor (DOL) is set to adapt a tougher visa regime that makes getting H-1B nonimmigrant visas harder for the U.S. companies. Once implemented, the DOL decision will hurt several companies that hire cheap and skilled workers from countries like India and China.

The proposed changes to the visa regulations would adversely affect the working of the IT companies by limiting their flexibility in recruitment, burdening them with additional costs and increasing the processing time. Also, the changes would expose the details of the foreign employees to the public.

According to the existing system, an employer who wishes to recruit foreign employees on work permit visas should file a Labor Condition Application (LCA) with the Labor Department and get a certification before applying for a temporary work visa like H-1B.   The LCA collects information about the occupation along with certain mandatory attestations from the employer regarding the employment.

Seeking to improve the scope of information collected during the LCA process, the DOL published the proposed revisions July 9 that contain significant changes in the Federal Register. The department is accepting public comments on the proposed revisions till Sept. 7.

The proposed changes in the LCA requires the employers to provide detailed personal information about the workers to be benefited by the LCA and details about the end-clients and worksites they will be employed. The new changes will limit the number of employees per LCA to 10.

The proposed guidelines have come at a time when the employers are already struggling to get the work visas due to the tough regulations and cap on the number of such visas issued. Industry experts feel that the new changes would pose significant challenges to the employers.

The new rules will force the employers to apply for the process months before the actual recruitment. Limiting the beneficiaries to 10 per LCA will lead to substantial increase in the effort and cost of applying for big companies that recruit foreign employees in hundreds. This curtails the flexibility the companies now enjoy in quickly hiring and deputing the employees to new worksites.

The employers will have to justify the need to recruit from outside the country and declare that such recruitment will not adversely affect the working conditions of similarly employed in the area of intended employment.

The worst effected will be the IT companies, which depend heavily on foreign skilled workers, since their recruitment and transfer decisions are not made well in advance. It would be practically difficult for an IT company to decide on the employee it is going to recruit months after and furnish the full personal details and worksite details in advance. At present, the companies apply for the visa much before identifying or recruiting the worker to be deputed to the U.S.

 "It would require a lot of planning in terms of identifying the beneficiaries so that they can file the LCA and then petition for the visa," Mumbai-based immigration lawyer Poorvi Chothani was quoted as saying by the Business Standard.

Apart from this, the new regulations are also going to place the details about the foreign employees employed in the U.S. in public domain and the industry feel that such release of personal information can be violation of the rules regarding the disclosure of private employee data.

The new regulations are aimed at protecting the American workers and discouraging the employment of foreign laborers.

"The labor department believes it is helping US workers and penalizing employers who hire H-1B workers," said Sheela Murthy, an immigration law specialist in the U.S., Business Standard reported.

The new regulations will be finalized after considering the feedback received from the concerned stake holders, subjected to the Federal approval, which may take months. However, if the new rules are implemented, IT companies like Infosys Technologies, which are already struggling to cope with the existing restrictions for the H-1B visa, will find it hard to recruit the foreign workers in future. 

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