US IMMIGRATION BILL - DRAFT OF THIS WIND PROMISES A STORM
By Ruma Dubey
Complicated – that in a single word describes the first draft of the 17-page USA Immigration bill which was presented yesterday. It had attempted to tackle all questions – visa allocations, citizenship, border security, especially Mexico and tedious methods of employment verification.
The Bill, landmark in many ways, is aiming to give legal status to over 11 million illegal immigrants in USA. The bill has been drafted by a bipartisan group – notoriously known as the ‘Gang of eight’ it has four Democrats and four Republicans.
The bill has proposed to give a new status to the illegal – calling them ‘Registered Provisional Immigrants’ where they will neither be citizens not be granted a green card but they will merely have a legal status of being illegal. They can roam around and work freely in US, without fearing deportation. This will not free and quick – it’s a 10 year long process wherein one has to pay $500 for applying for a legal status for first 6 years, another $500 to renew and then a $1000 fine. After 10 years, they would be eligible to apply for green cards through the merit system.
This is being done to get the illegal immigrants to get into the legal system serving two purpose – one to get around 11 million immigrants on paper which makes tracking easier and secondly, they will contribute to the economy. This is a highly contentious proposition as it aims to give legal status to illegals and this might encourage more to get into the country illegally. There are many conditions – arbitrary triggers and benchmarks before the legalization process starts. One hopes that the process does not become tedious, where luck, lots of money and superhuman patience will help one get the legal status. The triggers for rejection cannot be minor offences or setting high work standards that are designed for failure.
At the same time, the Bill has proposed spending $6.5 billion by the Department of Homeland Security, over the next 10 years to raise stiffer and taller barriers on the borders. Such a huge amount to be spent on raising fences, somehow sounds too extravagant.
Legalisation, the green card is going to be merit based, like the way it is in Canada. It will begin only five years after the Bill has been passed and one will need to accumulate points, based on skills and education, family ties and time lived in USA which will grant them the green card.
It has touched upon the Dream Act too, allowing children who have entered USA illegally, known as Dreamers, to become citizens after only five years. It has allowed some illegal immigrants, who were deported to be reunited with their families back in USA – only those who were deported on a non criminal ground will be allowed to return, if they have spouse or minor children in USA.
After all this, what about Indian IT companies who corner major chunk of the H1-B visa’s? IT stocks are down today precisely for this reason – there is worry that this draft bill will make it difficult for Indian companies to work in USA or get work from USA.
On one hand, it has proposed to increase the cap on the temporary high-skilled visas, known as H1-B from the current 65,000 to 1,10,000, adding 5000 more of those visas for the foreign graduates. This H1-B cap will be eventually increased to 1,80,000. This is good news but might not benefit the large cap Indian IT companies as it puts a curb on use of H1-B visa for those companies which have a higher ratio of work force in this category.
The draft bill states that if an employer has 50 or more employees, and more than 30% but less than 50% are H-1B or L-1 employees, the employer will need to pay $5000 as fee for each additional worker, be it H1-B or L1. In the same category, it a company has 50 or more employees and more than 50% are on H1-B or L1 visas, the fee is $10,000 per worker. This automatically means that the Tier I IT companies – TCS, Wipro, Infosys will fall into the higher category - $10,000 per additional worker while those based in USA, like Microsoft or Intel or Cisco will have no such restrictions.
IT companies pay around $60,000 to $90,000 per annum to the employee and the return per employee is around the same or most of the time, more. So for many to shell out $10,000 or $5000 per employee, vis-à-vis the returns should not be too difficult. Companies are sure to work around this. Once the economy improves, this is bound to get passed on to the clients.
The draft Bill further stipulates that from fiscal 2014, companies having 75% of their work force already on H1 or L1 will be banned from bringing in additional employees. It has also proposed to levy penalties to prevent, detect, and deter fraud and abuse of the H-1B and L-1 visa systems by fraudulent employers.
All this is being done to protect America and American jobs. On principle grounds there is nothing wrong; if foreigners were taking away jobs in India, would we tolerate this? Within India itself, people from other states taking jobs of Maharashtra is not being tolerated so need we say more? And this bill if it becomes a law, will surely hit Indian IT companies hard. But to try and give this a geopolitical color would be wrong – there is nothing retaliatory or revengeful here; this was very much in the offing and our Indian companies will have to deal with this change if and when it happens. Yes, India is today on the global map, thanks to IT and USA helping give Indian IT the world platform. The Indian Govt probably needs to open up and make the bilateral ties smoother. The world is our oyster and this is probably the time to explore the new world….