US President Donald Trump on Monday enacted a pause on non-immigrant visa, including the coveted H1B, till the end of the 2020, as a measure to safeguard jobs as job losses pile up in the economy during the ongoing COVID-19 pandemic. The move is expected to hit India hard, and has drawn criticism from the Indian and American tech fraternity. Further, Trump also extended a pause on the issuance of immigrant visas. In April, Trump announced a 60-day pause on the admittance of aliens into the US as permanent residents.
In a press release by the White House, the Trump stated through a presidential proclamation that it will be putting a stop on all these non-immigrant visas till the end of 2020, as "many workers have been hurt through no fault of their own due to coronavirus and they should not remain on the sidelines while being replaced by new foreign labor." The proclamation states that from Februrary to April, 20 million jobs (2 crore) were lost in industries that seek to fill them through visa like the H1B and L. 17 million (1.7 crore) jobs have been lost in industries seeking to fill jobs through the H2B.
The announcement not only covers the H1B, but also visas falling under:
- The H2B (for seasonal, non-agricultural workers)
- Certain L visas (consists of the L1, enabling intra-company transfers)
- Certain J visa (concerning students, study and exchanges)
The rules will apply to aliens who are outside the US or does not already possess non-immigrant visas or entry documents. It will kick in from June 24, and expire on December 31 this year.
According to US Customs and Border Protection, an immigrant visa lets its holders live permanently in the US.
What is the H1B and why is it under so much scrutiny?
The H1B enables employers in the US to hire workers in specialty occupations. The US Citizenship and Immigration Services can issue a total of 85,000 such visas a year: 65,000 going to highly skilled workers and 20,000 to those who have obtained a Master's degree or a PhD from an American university. Around 70% of those who get the H1B are Indian. This year, 184,000 Indians applied for the H1B, and is allocated based on a lottery.
Data show that Indians made up a major chunk of H1B petitioners. In the US fiscal year 2018 (as of October 5, 2018), 419,637 petitions were made for the H1B visa, out of which 309,986 petitions (73.9%) were from India.
Under the current administration, the H1B has been subject to criticism, accusing the system to enable abuse by allowing companies to undercut salaries to American workers by hiring cheaper foreign labour, thus putting pressure on US labourers.
Instead, the administration is proposing a points-based immigration system which will be the basis of the issuance of the H1B, as part of a long-called immigration reform actions called for by Trump. In the White House's press release that accompanied the proclamation, Trump calls for reforming the H1B process as well. "These reforms will help protect the wages of American workers and ensure that foreign labor entering our country is high skilled and does not undercut the United States labor market", it states.
A plan for a points-based immigration was announced by Trump in a press conference in May 2019, but is yet to pass through the US Congress. A points-based immigration system ranks potential immigrants on the basis of points they receive on attributes such as age, skills, education level and offers of employment rather than on a lottery, or through familial relations. This system is practiced in other popular destinations for immigration such as Canada, New Zealand and Australia, with the UK recently reintroducing the policy.
This move draws flak
The move to pause non-immigrant visas has invited criticism from within and outside the US.
Google's India-born CEO, Sundar Pichai, said he was disappointed by the move.
Twitter's public policy division also said that this would be detrimental to the US as an attractive destination for high-skilled talent.
Elon Musk of Tesla and SpaceX too said he disagreed with the move.
Amazon too tweeted its opposition to the move.
At home in India, NASSCOM, the trade body of Indian IT companies, has called the step misguided and bad for the US economy. "Thousands of US corporations, universities, medical facilities, research institutions, directly and through their associations have asked the President not to take such action because of the harm it would do now and going forward as the country reopens and recovers", it says.
Morgan Stanley does not estimate the move to have consequence on Indian IT. "No real impact due to localization efforts over past few years. To the extent possible, companies will try to move work offshore", it
said on the move.
The NIFTY IT index of 10 Indian IT stocks ended 216.75 points (1.5%) higher on the National Stock Exchange.