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Highlights

  • The proposed bill will want the minimum wage of H1B visa holders be raised
  • It sector is already paying around 75 - 80K to its employees
  • Stringent policies would mean a greater loss for the American firms.
Wage hike for H1B Visa holders in the Pipeline

Wage hike for H1B Visa holders in the Pipeline

With US Congress imposing stringent regulations on H1B visa holders, the Indian IT sector may have to seriously consider domestic hiring in order to meet the expectations of the regulations. It can turn out to be a difficult task, as not many talented resources can be found natively.

The proposed bill will want the minimum wage of H1B visa holders raised from $60,000 to $100,000. The bill, currently named as the Protect and Grow American Jobs Act, aims to remove the Master’s degree exemption from the existing H1B norms. The exemption cap was generally given to individuals engaging in institutions of higher education or non-profit and a separate 20,000 visas were reserved for them.

Even if the Indian IT firms see a minimal impact on their margins with the existing hike, they are compelled to hire more domestically, say industry experts. The bill which states that the minimum wage be raised from the existing $60,000 to $100,000 might not have a significant impact on the Indian IT sector. It is already paying around 75 – 80K to its employees with an upper limit of 2 years of work experience, and for those at a managerial level, it is going beyond 100,000. On the contrary, hiring domestically would mean a more expensive proposition for these IT firms, varying on the basis of location.Raise the Minimum Wage

IT service firms have conventionally looked at cost-effective strategies by employing Indians abroad. However, this could also hurt the American business’s interests as Indian workers working with foreign IT companies are only adding value to America, so stringent policies would mean a greater loss for the American firms.

There have been industry experts who have analyzed that with the onset of digital technology, it will be a more feasible decision to hire locally and on-site, with the sector seeing more localization and a significant reduction in off-shoring. However, this should not come across as a radical step by the Trump administration and should be implemented in sync with the ongoing and emerging trends in this sector.

America has always been helped to grow by foreign talents and entrepreneurs and tightening the ropes around the US H1B is not a very wise option.

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