Economy

Explained: New wage-based H-1B Visa rules and how it impacts Indian professionals and students

Updated : January 15, 2021 12:07 AM IST

The new rules will ensure that priority is given to higher wages and skills

It also increases the wages for those working in the US on H-1B visas

Since the beginning of his term, outgoing US President Donald Trump has focused on restricting immigration. And just days before his exit, Trump has once again tweaked the H-1B Visa rules, claiming the new rules will protect Americans from unfair competition posed by the entry of low-cost foreign labour.

The new rules will ensure that priority is given to candidates who have higher wages and skills while issuing H-1B Visas and it increases wages for those working in the US on H-1B Visas or holding employment-based green cards.

In December 2020, the Trump administration extended the freeze on H-1B Visas along with other types of work visas and green cards until March 31, 2021.

The freeze was ordered by Trump through two proclamations on April 22 and June 22 last year in view of the coronavirus pandemic disrupting Americans' livelihoods.

What Changes with New Wage-Based Rules

According to the new rules, it's mandatory for US employers to pay foreign workers a higher amount of the prevailing wage or the actual wage paid to other employees.

Once the rules come into effect, there will be a significant increase in the wages that employers in the US would have to pay foreign employees.

The new rules replace the current lottery system for selection of visa beneficiaries with a merit-based system that gives priority to higher wages and skills. Until now, parameters like experience and wages were not taken into consideration during the selection process.

The rules have been tweaked to ensure that the US Department of Labor effectively protects employment opportunities of American workers by removing the economic incentive to hire foreign workers.

Once the rules are published in the Federal Register on January 14, they will come into effect in 60 days.

Also Read: US move to restrict H-1B, Visas 'misguided', says NASSCOM

Impact on Indian Professionals and Students

More than 70 percent of H-1B Visa holders are Indians.

The technology companies depend on H-1B Visas to hire thousands of employees from countries like India and China.

They will now have to pay much more to Indian professionals in order to hire them.

Furthermore, students, freshers and ones with experience of a few years will suffer the most, because now the priority will be given to those with higher skills and wages.

Joe Biden Expected to Revoke Trump Administration’s Move

Democratic leader Joe Biden has promised to lift the suspension on H-1B visas once his term begins.

Biden will be sworn in as the 46^th President of the United States on January 20.

As part of his comprehensive immigration reform, Biden plans to increase H-1B visa limits and remove country quotas for green cards, or permanent residency.

Both these measures, if implemented, are expected to benefit Indian professionals.

“My immigration policy is built around keeping families together, modernising an immigration system by keeping families, unification and diversity as pillars of our immigration system, which it used to be,” Biden had said in June last year.

(With inputs from PTI)

Explained: New wage-based H-1B Visa rules and how it impacts Indian professionals and students

You May Also Like

Closing Bell: Sensex ends 531 points lower, Nifty down 1%; RIL falls over 5% post Q3

Coronavirus Latest Updates: 9,102 new COVID-19 cases in India, 117 more deaths; active cases at 1,77,266

Mahanadi Coal Railway scouts for CEO to rollout Rs 1,700 crore project

Trending on CNBC-TV18

recommended for you