H-1B Salary Hike To $130,000 - Clear And Present Danger To Indian IT Professionals

Last week U.S. Rep. Zoe Lofgren (D-Calif.) introduced a new legislation ‘‘High-Skilled Integrity and Fairness Act of 2017’’ which sent shivers down the spine of Indian IT companies. As a result the stock market value of few Indian IT giants slumped all of a sudden.

“My legislation refocuses the H-1B program to its original intent – to seek out and find the best and brightest from around the world, and to supplement the U.S. workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them,” said Lofgren. “It offers a market-based solution that gives priority to those companies willing to pay the most. This ensures American employers have access to the talent they need, while removing incentives for companies to undercut American wages and outsource jobs.”

Lot of people are speculating the pros and cons of this proposed bill. At the surface it appears that the cons are more than the pros. Here is a quick analysis of the potential impact to Indian IT Industry and Indian employees:

Impact to Indian employees working in the USA on H-1B

Remember, employers need to make their profit margin. If this becomes a law you may lose your job because your employer may hire a local American at a lower cost. Instead of paying 130k to an Indian on H-1B, the employer may pay 90k or 100k to an American employee. As a result the folks who are currently in USA may need to pack their bags and come to India.

Impact to Indian employees working in the Indian IT companies in India

When a lot of skilled H-1B employees will return from USA the demand and supply situation will change here in India hence the low performing IT professionals in India may lose their jobs too.

On top of this, a lot many people with H4 and EAD may return to India as well, resulting in greater supply of talent. Imagine the situation where a lot of good people with Onsite experience become available in Indian market, this may result in bringing the salary bar lower.

Other side effects:

• Night shifts from India may increase or the working hours of Indian may get changed to overlap with the US time zone because there will be fewer people workingat Onsite.

• Near shoring may increase. IT companies may look for options like Canada or South American nations to setup their delivery centers. This will allow overlap with US timezone. But may result in decreased revenue.

• Lot of young professionals may leave the job and choose to opt for higher studies like MBA or Masters degree.

• Indian companies may look for new customers and new business in the non US regions like Europe, Asia, Australia, South Africa etc. They may also focus on Indian markets more than ever.

• Focus will shift on creating platform or solutions where minimal human interaction is required.

• Usage of video technology, live meetings, telepresence, virtual reality etc. may increase.

• Stock market value of some companies may take a temporary hit but few smaller companies may get closed or may get merged with bigger companies.

• Body shopping companies will be severely impacted because they may not be able to make profit margins.

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This legislation has been introduced at the time other executive orders have been issued by the President. Few of those are:

Titled “Protecting the Nation From Foreign Terrorist Entry into the United States,” the EO "suspends" the immigrant and nonimmigrant entry of all nationals from Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen for 90 days from the date of the order.

The same EO also suspends the visa interview waiver program that was in place at U.S. consulates worldwide. The interview waiver program, referred to as “dropbox” processing in some U.S. consulates, exempted some visa renewal applicants from an in-person consular interview. The suspension of the interview waiver applies to all U.S. visa applicants regardless of country of nationality or citizenship, and means that all visa applicants will be required to attend an interview unless it is not required by statute. This will likely cause wait times for visa interviews to increase significantly.

The EO also instructs the State Department and various security agencies to implement significant changes to screening processes that will apply to all immigration programs. Further details on this new program are expected in the days ahead.

Impact of Other Executive Orders

President Trump has also signed two other Executive Orders directly related to immigration programs, with more expected to be issued in the days ahead.  On January 25, 2017, he signed an EO titled “Enhancing Public Safety in the Interior of the United States” and on January 26, 2017, another EO titled, “Border Security and Immigration Enforcement Improvements,” was issued.

While many details set forth in these EOs remain to be fleshed out, it is clear that the Trump Administration intends to place an increased emphasis on immigration enforcement, particularly in regard to the removal of those who have been convicted of crimes and those who have been charged with crimes. While the Administration is expected to provide more information about its enforcement priorities in the days ahead, it is expected that there will also be an increase in efforts to remove persons who have overstayed after a lawful entry.

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Given the current situation, if you are an IT professional, this is the right time for you to get back to the basics and focus on learning new processes, methods and technologies. It is best to lay low as of now. Let the dust settle down in the next few months and wait till the time you have a clear vision.

I hope you find this information helpful. If you are more than 18 years old you would also like to read this post How Much Money Would One Save In USA?