How will proposed H1B changes affect your business strategy?

Since President Trump has been in office, many technology companies have been concerned about the proposed changed to the H1B Visa. For those who are not familiar with the H1B Visa program, let’s start with the basics.

What is a H1B Visa?

The H1B visa is a non-immigrant visa that allows companies to employ foreigners for a period of up to six years. This visa is aimed at helping companies employ foreigners in positions for which they have been unable to find American employees. The minimum salary for an employee holding the H1B visa is set at $60,000 per year. H1B visa holders are allowed to apply for permanent residency in the US as well as buy or sell property in the country.

Every year, the US government grants 65,000 H1B visas, while an additional 20,000 are given to foreign students who have completed their master’s course from a US university. In accordance with the Free Trade Agreements that the US has with Singapore and Chile, they get additional 5,400 and 1,400 visas under the H-1B1 category, respectively. (gadgets.ndtv.com)

Who uses H1B Visas?

The most prominent industries that use H1B Visas are specialty occupations pertaining to Department of Defense cooperative research and development, Project Workers, service workers such as Fashion Models and lastly, highly skilled technical workers, many of which we see in the I.T. field. (www.uscsi.gov)

Some companies have used the H1B visa program to successfully hire top talent with unique skills that do not exist in the American workforce. As a result, there businesses have thrived. Others have been accused of abusing the system to hire cheaper labor than the American worker. Here is a list of the Top 10 H1B Visa Sponsors from 2017:

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What are the Proposed Changes to the H1B Visa Program?

• Proposed changes to the H1B Visa program come as a result of the proposed High-Skilled Integrity and Fairness Act of 2017. According to briefings from Congress representatives the proposed changes are:
• Resets the current annual wage exemption level from $60,000 (set in 1998) to $130,000
• Requires dependent employers, those with 15% or more of their workforce, using H1B Visas to adjust compensation and make attestations regarding recruitment and non-displacement of U.S. workers
• Eliminated the Master’s Degree exemption for dependent employers thus would require all H1B Visa applicants to have a Master’s Degree.
• Sets aside 20% of the annual allocation of H-1B visas for small and start-up employers (those with 50 or fewer employees) to ensure small businesses have an opportunity to compete for high-skilled workers, while still protecting against outsourcing.
• Removes H1B visa hurdles for students and other temporary visa holders along with administrative burdens

How will this affect your organization?

Many economists, analysts and businesses have debated the how this will affect our economy and organizations. We’ve heard feedback from our clients, many who have or are participating in the H1B Visa programs. Here’s what industry experts are saying: 

• “Among the biggest recipients of H1B visas each year are Indian IT firms, such as Infosys, TCS, Wipro, HCL, Igate, Cognizant, as well as global giants IBM, Accenture, Microsoft, Google, and Amazon, among others. If this bill passes, they will to bear significantly higher costs for employing highly-skilled foreign citizens. The visa reform may even create a gap in demand and supply for talent for smaller companies that cannot afford incurring high costs to employ skilled workers.” Gadgets 360
• “The H1B program is most definitely harming American workers, harming them badly, and on a large scale,” Ars Technica highlights recent Congressional testimony from Howard University public policy researcher Ronil Hira
• "Curbing abuse of the H1B system will protect American jobs and help ensure that visas are available for innovators who need them to maintain a competitive workforce," Congressman Scott Peters
• "We knew it would begin in some form. This has just been introduced in the house, we have to still see what the new President does. If the bill passes we will have to adapt. The industry has already started hiring onshore so that will increase," an executive with a large IT company said. He declined to be identified.
• "Complying with higher minimum H1B wages would not concern us as most tier-1 Indian IT firms pay their H1B employees well above minimum thresholds specified and have substantially moved to remove the wage differentials between H1B visa holders and US locals/green card holders in their workforce," Vinu George, an analyst with JPMorgan, said in note on the outlook for the sector in 2017. 

How can you get ahead of these changes?

In 2017, many organizations will need to do more with less. The rising wages of the workforce, in addition to a competitive marketing and government regulations are driving businesses to make strategic moves. Together, New Horizons and our clients and partners are committed to helping you remain competitive, attract top talent and be a leader in your market. We believe in training and developing our team to empower them to succeed and we want to do the same for you. With over 50 authorized vendors, and thousands of courses running each month, you can learn what you want, how you want, when you want.

Budgets are shrinking as expenses, innovation and recruiting take the wheel. Together with our partners, we can assist in team development and budgets through:

• Uncovering Enterprise training dollars such as SATVs, Cisco Learning Credits and Coupons
• Customized Training catered to your teams development plans
• Lifetime Version Upgrades and Retakes to reinforce knowledge transfer
• Retention and Retraining Funding for your existing team
• On the Job Training for onboarding new employees
• Layoff Aversion Fund to retrain at risk team members

Contact one of your dedicated Account Executives today to partner with New Horizons on your success!