US tweaks H1B visa rules – higher wage is key factor now

News: The United States(US) administration has amended its H-1B visa regime to give priority to higher wages and skills instead of the prevailing lottery system for selection of candidates looking to work in the country.

Facts:

What is an H1B Visa?

• It is a non-immigrant visa that allows US companies to employ foreign workers in occupations that require theoretical or technical expertise. They are generally approved for three years after which holders often change employers and continue working for other companies based in the US.
• Issuance of H1B visas: Every year, the US administration issues 85,000 H-1B work permits. Of these, 65,000 are for people with specialty occupations while the rest are reserved for foreign workers who have earned a Master’s or a higher university degree in the US.
• Share of Indians in H1B Visa: Since the number of applications from Indian companies as well as individuals is much higher than any other nationality, a lion’s share of these work visas is cornered by Indians.
  • For example, as of April 1, 2020, the US had received about 2.5 lakh H-1B work visa applications and Indians had applied for 1.84 lakh or 67% of these visas.

What are the New Rules?

• According to the amended rules, US Citizenship and Immigration Services(USCIS) will first select registrations where the proffered wage equals or exceeds the prevailing level in that area of employment.
  • Until now, the selection of H-1B work visas was done by a randomised lottery system, which did not take into account factors such as wage, experience or any other requirements and demands.
• Impact of New Rules: It could impact US tech companies looking to hire from the pool of H-1B visa workers as they are skilled and available for lower salaries. Indian companies are also likely to be hit and may have to shell out more salary for on-site workers.

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