The US Congress has decided to double a special fee on the popular H-1B and L-1 visas despite India’s objection to it. This is sure to hit the Indian IT companies hard.
On Wednesday, PM Modi conveyed to US President Barack Obama the concerns of the Indian IT industry and professionals on the legislation in the US Congress relating to these two visas. This was done when Obama telephoned Modi to thank him for his leadership role in achieving the historic agreement on climate change in Paris.
“The Prime Minister shared with President Obama the concerns of the Indian IT industry and professionals on the proposed legislation in the US Congress relating to H-1B and L-1 visas,” said the Prime Minister’s Office.
Congressional leaders have proposed to impose a special fee of USD 4,000 on certain categories of H-1B visas and USD 4,500 on L-1 visas. This hike is expected to fund a 9/11 Healthcare Act and a biometric tracking system. The US House of Representative is slated to vote on the USD 1.1 trillion spending bill deal which incorporates the doubling of fees for H-1B and L-1.
Congress members believe that the money generated from the special fee will be more than 1 billion USD per annum. This, as decided, will be used to fund a biometric entry and exit tracking system, in addition to funding health screenings and treatments for 9/11 first responders.
According to the agreed bill, the new measure will apply to companies having at least 50 employees with 50 per cent of their employees on H-1B or L-1 visa. These companies will have to pay a new fee of USD 4,000 for H-1B visas and USD 4,500 for L-1 visas.
Experts say that the 50 per cent clause will mostly hit the large Indian IT service firms, the leading users of the H-1B visa.
Though the lawmakers described the bill as a temporary provision, the new H-1B and L-1 visa fee increase is for a period of 10 years as against a previous provision of five years. The previous such provision from 2010 to 2015 of USD 2,000 for H-1B visas lapsed on September 30.
In a study released in September this year, NASSCOM, a trade association of Indian IT industry, said Indian IT companies have paid between USD 70 to USD 80 million annually to the US Treasury.
The new measure, NASSCOM said, is expected to raise between USD 1.4 billion and USD 1.6 billion every year for the next 10 years.
Thus, the proposed bill also says that after USD 1 billion is deposited for 9/11 first responders and the Biometrics account every year, the rest of the money will be deposited in the general fund of the Treasury.
The H1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields.
Last week, two American Senators introduced a legislation in the Senate proposing to cut the number of popular H-1B visas by 15,000 and that such a visa be given to highest wage earner first.
(With inputs from PTI)