2 US Rules On H-1B Visa That Can Hit Indian IT Companies Hard

The immigration authorities in the US finalized 2 rules that can damage Indian IT firms. The department of labor’s wage hike rule and stringent regulations will make it tough to qualify for an H-1B visa were finalized as the Trump administration winds down.

The final wage hike rule kicks in 60 days and the H-1B visa regulations 180 days after the date of publication.

What are these final rules?

Wage hikes for H-1B workers

The DOL reissued its interim final rule on wage hikes it first implemented on October 8, 2020. 3 federal courts struck it down on the grounds that the agency couldn't have implemented the rule without inviting comments and a notice period. The rule has increased the wages for H-1B workers by as high as 50% in certain regions.

The revised final rule announced on January 12, 2021, make some changes. Not only will it come into effect after 60 days, but it also says that the hike will be implemented in a phased manner spread over several months.

For example, the wage hikes range between 35% and 90% compared to 45 % and 90% for the four H-1B wage levels.

If a computer programmer is paid $70,000 per year, the new rule will push the package up by $19,600.

What does it mean for H-1B aspirants and employers?

The rule would not come into effect till July 1, 2021 since the implementation was phased.

These could be subjected to lawsuits, considering that the courts earlier blocked the wage hike rule. Moreover, the Biden administration could place the wage rule finalized during the last days of the Trump Administration – on hold in order to review its contents and determine whether it should take effect.

Strengthening the H-1B visa program

After the wage hike rule, the department of homeland security implemented a final rule on the employer-employee relationship. The rule announced on January 14, 2021, will be effective 180 days after the date of publication.

Under the rule, the employers of the third-party H-1B workers will now have to initiate H-1B for the workers.

Most IT firms initiate H-1B visas for their employees to work for their clients in the US. So far, clients did not have to take part in the H-1B application process. The new rule changes that.

The impact

The visa rule has the potential to hit the Indian IT industry that services top US companies. The rule was aimed at destroying the Indian IT industry by forcing its clients to file H-1Bs as secondary employers.

But there is hope. The Joe Biden administration takes charge on January 20, 2021 and could stall the implementation of the rule.