US Extends Ban On Employment-Based Visas

  • On 23rd June 2020, the US President signed an executive order extending the ban on immigrant and non-immigrant worker visas.
  • Popular work visas including the much-coveted H-1B and H-2B, and certain categories of H-4, J, and L visas shall also remain suspended until December 31, 202

Background

  • After Trump took over as President in January 2017, the US government had started moving towards a more conservative work visa regime, alleging that Indian and Chinese IT companies had been sending workers on very low costs, which hurt prospects of skilled workers in the US.
  • In November the same year, the US House Judiciary Committee had, in a bid to deter Indian and Chinese companies from misusing H-1B visas, voted to pass a legislation to increase the minimum annual salary of H-1B visa holders to $90,000 from $60,000.
  • Finally, in April 2020, Trump had signed an executive order which had banned the entry of foreign workers in the country for a period of 60 days.

Reason for Ban

  • The move was to protect domestic workers who had been impacted due to a contraction in the economy in the wake of the Covid-19 pandemic.
  • American workers have to compete against foreign nationals for jobs in every sector of economy against millions of foreigners who enter the US to perform temporary work.

Work Visas

  • In order to fill a vacuum of highly-skilled low-cost employees in IT and other related domains, the US administration issues a certain number of visas each year which allows companies from outside the US to send employees to work on client sites.
  • Of these work visas, the H-1B remains the most popular among Indian IT companies.

Visa Categories Affected

H-1B

  • Issued to work in a specialty occupation.
  • Requires a higher education degree of its equivalent.
  • Includes fashion models of distinguished merit and ability and government-to-government research and development, or co-production projects administered by the Department of Defence.
  • They are generally valid for up to six years

H-2B

  • These are for seasonal non-agricultural labor.
  • They are generally valid for up to three years and are popular in industries like food processing, hotel work, and landscaping.

H-4

  • H-4 visas are for the spouses and children of H-1B and H-2B holders.
  • The proclamation does not explicitly address them, but does restrict entry for "any alien accompanying or following to join" restricted categories.
  • They are valid for the duration of the H-1B visa.

J-1

  • J-1 visas are for cultural and educational exchange.
  • The order applies to J-1 holders "participating in an intern, trainee, teacher, camp counselor, au pair, or summer work travel program."
  • They are valid for up to seven years, depending on program type, and there is no annual cap.

J-2

  • These visas are for the spouses and dependents of J-1 holders.
  • It is valid for the duration of the J-1 visa.

L-1

  • L-1 visas are for high-level and specialized company employees.
  • They are generally valid for up to seven years and there is no annual cap.

L-2

  • L-2 visas are for the dependents of L-1 holders.
  • They are valid for the duration of the associated L-1 visa.

Impact

  • Since the ban is effective immediately, the processing of all new H-1B, H-2B, J, and L visa categories stand suspended.
  • This means those who do not have a valid non-immigrant visa as of June 23, 2020 and are outside of the US, will not be allowed to enter the country until December 31, 2020.
  • The order also replaced the current system of awarding H1B visas by lottery with a system that privileges applicants who are paid more than others.
  • Immigration experts view that proposed regulations could impose more stringent norms for such visa and green card categories — by way of higher wages or a restrictive definition of specialty occupation that determines H-1B eligibility.

Exceptions

  • Workers in essential services in the food sector have been given some reprieve, and their entry shall be decided by the consular officer of immigration services.
  • H-1B, H-2B, J and L visa holders, and their spouse or children already present in the US shall not be impacted by the new worker visa ban.

Expected Benefit for US

  • The White House expects that the visa ban will free up 525,000 jobs and as such, make a dent in the high unemployment rate caused by the coronavirus pandemic.

Impact on Indian IT Companies

Negative

  • The ban on the entry of non-immigrant workers with H1B visas is likely to have the biggest impact globally, and especially on Indian information technology (IT) companies and workers.
  • Indian IT companies are amongst the biggest beneficiaries of the US H-1B visa regime, and have since 1990s cornered a lion’s share of the total number of visas issued each year.
  • This could result in a significant impact on margins and worker wages of Indian IT companies that have sent thousands of low-cost employees to work on client sites in the US.

Positive

  • The US government move is expected to benefit the Indian offshoring industry with US clients and technology companies seen moving more work within the country.
  • Analysts foresee a case for more offshoring of work in coming months, given the impact of the coronavirus pandemic, travel restrictions, and, now, suspension of H-1B visas.
  • Further, retaining the skilled workforce to work within the country will provide boost to become more self-reliant (under Atmanirbhar Bharat) , paving the path towards the 5 trillion dollar economy.

Criticism

  • Critics of the measure say the US administration is using the coronavirus pandemic to achieve its goals to lower immigration to the US.
  • Businesses who depend on foreign workers have long opposed curbs to legal immigration, while the US Chamber of Commerce, the nation's largest business association, said that the policy will stifle the economic recovery.
  • The American Immigration Lawyers Association (AILA) has voiced its strong disapproval of this ban. This Presidential Proclamation ignores this reality and will make emerging from this crisis more difficult and expensive. It will harm employers, families, universities, hospitals, communities, and delay America's economic recovery.

Source : Civil Services Chronicle Online, June, 2020