INSUBCONTINENT EXCLUSIVE:
H-1B rules: The impact of change in rules will be company specific, said Icra.Tightening of H-1B work visa rules by the US is likely to put
cost pressures on the Indian IT (information technology) services firms and impact their margins due to increase in compliances and rise in
onsite hiring, according to a report
However, the impact will be company-specific and relative to H-1B visa dependence, according to the report by rating agency Icra
"The changes will disqualify certain positions currently eligible for H-1B visas, thereby impeding the movement of low-cost skilled labour
contemplating on awarding visas to the most skilled or to highest-paid beneficiaries, news agency Press Trust of India (PTI) reported
The move will work against the Indian IT services sector (H-1B dependent) as the average wage is approximately lower by 25 per cent compared
to companies that are not dependent on H-1B visas as per estimates, feels Icra
A firm is defined as H-1B dependent if more than 15 per cent of its US full-time employees are on an H-1B visa
Awarding of H-1B visas based on highest skill or compensation will leave less headroom for Indian companies to get such visas, says Mr Jain
Consequently, increased onsite hiring or raising the compensation for H-1B visa applicants will impact companies' margins and will be credit
"However, the impact will be company specific and relative to H-1B visa dependence," Mr Jain added
Icra feels revoking such visas will have an indirect negative impact on workers currently employed on H-1B visas or seeking such visas whose
spouses are working professionals
"Leading firms are also increasing their proportion of offshore work to reduce dependence on such visas, though the magnitude of such shifts
is expected to be marginal as only certain services are amenable to higher offshoring compared to others," he said.5
Overall, Icra expects a ramp up in onshore hiring, particularly for entry-level programmers to maintain a competitive cost structure, while
reducing dependence on H-1B visas for such low-cost skilled labour
