The effect of increased US visa fee for IT companies

December 22, 2015
Last week the US President had signed a spending package worth $1.8 trillion and also reauthorized the fee charged on the non immigrant visas for firms that recruit over 50% overseas workers. The fee had expired on 1st October. The fee for the visa has been doubled to around $4000 for H-1B and $4500 for L-1 visas.

Impact on IT companies 

The big IT firms of India have got 50 to 70% of their employees in the onsite locations largely filled up by the H-1B holders. Nasscom has predicted that the latest fee would be costing around $400 million every year for Indian IT industry. For the $100 billion income generating IT industry of India, the effect on the margins might be around 30-40 basis points.

The effect of increased US visa fee for IT companies

Another matter of concern is the less number of visas are available, preference to the candidates from the US universities and needing firms applying for the H-1B visas to get a minimum of 50% of their employees as US citizens.

If the above limitations came into force, then it might have the far reaching effect on the IT companies from India. The firms had been complaining about the lack of needed skill set among the IT professionals working in the US.  According to a research it reveals that around 46% of the job openings are in STEM fields go without filling for over a month in the US. And if the firms from India have been forced to make use of the US manpower, they are going to face talent crisis for many of skilled and senior locations.

Inspite of the skilled labor shortage, the information from the Nasscom reveals that the job of the US citizens and green card holders by IT firms of India has increased by 10% each year between 2010-2011 and the year 2014-2015. Indian firms had paid around $81.447 to the US citizen, that is not much high than the amount spend in hiring an H-1B visa holder from India. Firms also had to take out more $15,000 for the tickets, visa and some other expenses.

The procedure of getting the H-1B is tough as the USCIS has made it so to protect the US employee. Along with the educational requirements, the employers also need to show that they had obey with the rules on wages. They also need to unveil the international employee’s charge of pay.

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