Recent discussions around potential reforms to the H-1B visa policy could bring advantages to Indian IT services firms, even though their share of total visa sponsorships remains relatively small. A report by Macquarie Research, cited by the Economic Times, highlights the critical role H-1B visas play in addressing the U.S. technical talent shortage, despite challenges such as limited local hiring.
Concerns Over Proposed Flat Wage Policy
One of the most debated proposals is the introduction of a flat wage floor for H-1B visa holders. A flat wage implies a fixed rate of pay, irrespective of factors like job nature, location, or living costs. Macquarie expressed concerns over this approach, pointing out its impracticality due to the varying cost of living across different U.S. regions.
“For example, what might be a fair wage in a smaller town would fall short in a high-cost city like New York,” the report noted. A standardized wage could inadvertently widen economic disparities between urban and rural areas.
To mitigate these issues, Macquarie suggested converting H-1B visas into general work permits, akin to Norway’s skilled work permit model. This shift would grant visa holders greater job mobility, promote healthy competition among employers, and enhance worker protections.
Declining H-1B Visa Approvals for Indian IT Firms
An analysis of fiscal year 2024 data underscores a sharp decline in H-1B visa approvals for Indian IT firms. According to the National Foundation for American Policy (NFAP), a U.S.-based non-partisan think tank, the top seven Indian IT companies collectively received only 7,299 approvals for new H-1B employment—nearly halving from the 14,792 approvals recorded in 2015.
Amazon led in new H-1B approvals among individual companies, with 3,871 approvals in FY24. However, this marked a decline from 4,052 in FY23 and a peak of 6,396 in FY22. Cognizant followed with 2,837 approvals, while Infosys and Tata Consultancy Services (TCS) secured 2,504 and 1,452 approvals, respectively. Other major companies like IBM (1,348), Microsoft (1,264), HCL America (1,248), Google (1,058), Capgemini (1,041), and Meta Platforms (920) also reported varying levels of success.
The Way Forward
The potential reforms to H-1B visa policies and their implications remain closely watched by Indian IT firms. While challenges persist, measures to make the system more flexible and equitable could strengthen the U.S. workforce and benefit both employers and employees.