President Donald Trump may join members of Congress from both parties in trying to overhaul the visa programs used by corporations to bring overseas workers to the U.S. The implications are complicated and far-reaching, particularly for technology companies.
1. Which programs are under scrutiny?
Companies use a variety of visas to bring in workers from abroad, including the B-1, the L-1 and the best-known one, the H-1B.
2. What does the H-1B program do?
It allows companies to recruit 85,000 employees from abroad each year for specialty positions in fields including technology, science, medicine, architecture — even fashion modeling. It took less than a week for applicants to exhaust that allotment in 2016, and technology companies including Facebook Inc., Google Inc., Intel Corp. and Cisco Systems Inc. have sought to increase the number available. People from India receive more H-1Bs than any other nationality.
3. Why does the U.S. have these programs?
They were designed to allow U.S. companies to hire temporary workers from other countries when they couldn’t find qualified people domestically. These temporary visas were established under the Immigration and Nationality Act of 1952. The programs have morphed over the years, and many of the visas now go to companies that pay foreign workers less than their American counterparts would receive. The total number of visas issued for temporary employment-based admission to the U.S. grew to more than 1 million in 2014 from just over 400,000 in 1994, according to the Congressional Research Service. Those numbers included some unskilled and low-skilled workers, plus accompanying family members.
4. Do the programs need reform?
It’s pretty clear the H-1B program and others have been used in ways that contradict their original intent. There have been allegations of abuse and at least one big settlement: In 2013, a Bangalore-based outsourcing company, Infosys Ltd., agreed to pay a record fine of $34 million to settle U.S. allegations that it sent employees to the U.S. with B-1 visitor visas to sidestep the caps on H-1Bs.
5. What does Trump propose?
During his presidential campaign, he said the H-1B program is a “cheap labor program” that takes jobs from Americans. He hasn’t yet detailed his ideas as president, but based on a draft executive order, his administration may push companies to try hiring American workers before turning to foreign ones — a step that isn’t necessary now — and make it more difficult for lower-paid roles to qualify for H-1B skilled-worker visas. He’s also asked that the programs prioritize giving visas to the most highly paid workers from abroad.
6. Who gets priority now?
Currently, H-1B visas are allocated by random lottery, with no priority given to companies that pay workers more. The biggest recipients of the visas are outsourcing companies, including India’s Tata Consultancy Services Ltd., Wipro Ltd. and Infosys. They pay workers in the program an average of about $65,000 a year, while Apple Inc., Google and Microsoft Corp. pay their H-1B employees more than $100,000.
7. Can Trump act on his own?
An executive order can begin the reform process, but Trump lacks the broad powers of Congress. For example, he can’t change the number of H-1B visas that are given out each year, but he probably can change the way they’re allocated. So he could order that priority be given to higher-paid workers.
8. What might Congress do?
Congress has tried many times in the past decade to change the work visa programs, with limited effect. Bills offered in the House by two California lawmakers, Republican Darrell Issa and Democrat Zoe Lofgren, aim to do so by dramatically raising the minimum wage for H-1B workers — as high as $130,000, in Lofgren’s proposal, up from the current $60,000. The legislative push has spooked India’s tech companies, weighing on their stocks. There’s also a bipartisan proposal in the Senate, long pushed by Republican Chuck Grassley and Democrat Richard Durbin, that would forbid replacing U.S. workers with H-1B hires and prioritize visa applications from people who earned degrees at American colleges.
9. Will Silicon Valley be hurt by the changes?
It depends on the details, of course, but the U.S tech industry may well come out on top. Because so many H-1B visas go to outsourcing firms, American employers like Apple, Google, Microsoft Corp. and Facebook haven’t been able to get as many as they would like. They could be benefit if outsourcers face more restrictions.
Bloomberg
by Saritha Rai and Peter Elstrom
by Saritha Rai and Peter Elstrom
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