Software

The Indian CIO’s checklist for the H-1B season

As usual, there are more applicants for H-1B visas than there are available slots. What's a CIO to do?

If you are a CIO hiring or planning to hire IT professionals for onsite projects in the US, you will have to wait to see if luck favors you this season. For the second year in a row, the US Citizenship and Immigration Services (USCIS) has announced that the Congress-mandated cap of 65,000 applications has been reached within five days of starting to accept them from April 1, 2014.

The USCIS also said that it has received more than the limit of 20,000 H-1B petitions filed under the US advanced degree exemption. Having anticipated receiving petitions in excess of both caps, the USCIS intends to hold a lottery to select visa applicants. So CIOs have to wait for a computer-generated process to randomly select the number of petitions needed to meet the caps.

But remember, you still have until April 28 to avail yourself of visas that are exempt from the cap -- for instance, petitions filed on behalf of current H-1B workers who have been counted previously against the cap will not be counted towards the H-1B cap for FY 2015, which begins on October 1, 2014.

The entire outsourcing industry flourishing in India owes its success partly to the H-1B visa program, which allows IT companies to undertake onsite projects through the deployment of qualified professionals from India on “temporary employment.”

For Indian IT companies, the uncertainty of a lottery system for H-1B visas also brings with it the prospect of having to hire local talent at higher costs and training them for the job if they are not skilled or qualified enough.

With the immigration reform legislation yet to be passed, there are only 85,000 H-1B visas available for FY 2015. If the law is passed, CIOs will have some more leeway as it proposes to increase the annual H-1B visa cap for highly skilled workers from 65,000 to 110,000 per year and for science, technology, engineering, and math (STEM) visas from 20,000 to 25,000 per year. In total, there would be 135,000 H-1B visas available the first year that the law is enacted.

In fact, the speed with which the cap is reached year after year is reason enough for the IT industry to lobby for speedy reforms, as it is clear that there is a huge demand for qualified skilled technology workers in the US.

There may be some relief in the form of some new rules: For instance, the White House has said in a statement yesterday that spouses of high-skilled workers on H-1B visas would also be authorized to work in the US in order to strengthen American innovative competitiveness.

Another proposed legislation, the Startup Visa Act 3.0 also envisions grant of visas for foreign entrepreneurs to start new companies in the US, with investments from US venture capitalists and providing employment to US citizens.

However, until these reforms do take place, every CIO who is counting on H-1B visas should set the process in motion well in advance. Here is a checklist to comply with in case you missed the bus this year:

  • The applicant should clearly establish an employer-employee relationship with the petitioning US employer. In the case of a startup, entrepreneur, or co-founder, evidence should be provided that there is a separate board of directors that has the ability to hire, fire, pay, supervise, or otherwise control the beneficiary’s employment.
  • The applicant’s job should qualify as a specialty occupation -- with a minimum requirement of Bachelor’s degree to fulfill the duties.
  • The applicant should be paid at least the actual or prevailing wage of the occupation, whichever is higher. A labor condition application, certified by the Secretary of Labor for the said position, should be filed to back this.
  • Make sure an H-1B visa number is provided within the prescribed cap, unless the application is cap exempt.

In addition to the above, CIOs should also ensure compliance under the Patient Protection and Affordable Health Care Act. They should know that they would face a penalty tax if they do not provide "minimum essential cover." The "employer shared responsibility" mandates that even if one employee receives premium tax credit under Obamacare, the employer will attract a penalty, calculated as explained here. So when Indian outsourcing companies sign those contracts with US clients for onshore projects, they have to take into account the additional costs in terms of ensuring health insurance for employees. Judging by the flood of petitions, the H-1B is still proving to be the more viable option.

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