New H-1B and L-1 Visa Reforms Proposed in US Senate, Sparking Concern in India and China

Donald Trump administration in America is continuously tightening its stance on H-1B visas. In this regard, top Republican and Democratic members of the US Senate have now introduced a new bill titled the 'H-1B and L-1 Visa Reform Act of 2023'.

Chuck Grassley, Republican Chairman of the Senate Judiciary Committee and Senator from Iowa, and Dick Durbin, Democrat from Illinois, have stated that this bill will increase wage and recruitment standards for H-1B and L-1 visas, mandate public posting of job availability, and limit visa eligibility.

Increased Scrutiny on L-1 Visas Along with H-1B

It is noteworthy that the H-1B visa is most frequently used to recruit skilled workers in the American tech sector, and professionals from India and China have benefited the most from it.

The L-1 visa, on the other hand, allows multinational companies to transfer employees from their foreign offices to the US. The bill has increased restrictions on both these visas.

Time to Make Programs Honest and Restore Dignity to Workers

Grassley and Durbin stated that the current system has been misused by many employers. Grassley said, "Congress created the H-1B and L-1 visa programs for situations where domestic talent is unavailable. But over the years, many employers have used cheap foreign labour, marginalising American workers."

"Now, Congress needs to restore honesty to these programs and uphold the dignity of American and foreign workers." Durbin said that large-scale job cuts domestically and visa misuse against foreign workers are linked.

He added, "Many large companies are laying off thousands of American employees while submitting H-1B visa applications for foreign workers."

Bill Includes Several Strict Provisions, Enforcement Personnel Recruitment to Increase

• Increasing H-1B and L-1 wage and recruitment standards.
• Mandating the posting of job availability on a searchable platform in the public domain for American workers and laid-off H-1B holders.
• The Department of Labor will charge employers a fee for H-1B visas, which will be used to recruit 200 new enforcement personnel.
• Prioritising visa applications for STEM (Science, Technology, Engineering, and Mathematics) employees with higher education.
• Tightening the definition of 'Specialty Occupation' to mandate a minimum bachelor's degree.
• Restricting L-1 applications for new companies.
• Penalties or barring future applications for employers who violate regulations.

Companies Preparing for Outsourcing, Trump Administration Also Ready with New Hire Bill

Following a significant increase in H-1B visa fees, American companies are now rapidly turning towards India for their offshoring operations, leveraging Global Capability Centers (GCCs) located in India.

Rohan Lobo, Partner and GCC Industry Leader at Deloitte India, stated that many American companies are already reassessing their workforce needs and planning to shift them to India.

It is noteworthy that India, the world's fifth-largest economy, has 1,700 GCCs, which constitute more than half of the global number.

On the other hand, the Trump administration has also brought a new hire bill to Parliament to curb this, proposing a 25% excise duty on payments made by American entities to foreign service providers.