H1B changes aimed at curtailing efforts to game the lottery system
Experts expect the changes as early as the 2024 lottery, and it could make a few more visas available to India's tech services sector
Last Updated: Oct 25, 2023, 14:55 IST6 min
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Big changes are coming to H1B visa rules that could have significant impact for India’s $245 billion IT services industry.
Last week, the US Department of Homeland Security (DHS) and the US Citizenship and Immigration Services (USCIS), published a Notice of Proposed Rulemaking (NPRM) related to the “H-1B specialty occupation worker program", according to an October 20 press release.
The proposed rule intends to streamline eligibility requirements, make the programme more efficient, provide more benefits and flexibility for both employers and workers, and “reinforce integrity measures", says the release.
That last part is the biggest change in the offing—aimed at preventing misuse of the lottery system that selects 65,000 people every year for this coveted non-immigrant work visa that has become a critical factor in the success of India’s IT Services companies.
“In the current system, the same person can file multiple applications through various employers or consultants," the head of human resources at the Indian global capability centre at a multinational company told Forbes India. With the change in the H1-B rules, “this is stopped, only one application for one person. This is huge as it will avoid duplicate petitions".
The person didn’t want to be named as the company isn’t making any official comments on the proposed change.
Changes to the H1B lottery are a hot political subject in the US. For example, presidential aspirant from the Republican Party, Vivek Ramaswamy, has called the lottery system “senseless" adding “the H1B regime is a form of indentured servitude that’s a product of corporate lobbying".
If elected, Ramaswamy wants to “gut the lottery" and award the visa based on a meritocratic system. He also wants to tie the awards to “civic commitments" to America by the beneficiaries. Much of Ramaswamy’s wealth comes from a pharma company which itself has taken advantage of the H1B system, US media reports note, including Politico, which is credited for the interview with him where these comments were first published.
As the DHS press release notes, the H1B programme is pivotal for US employers, allowing them to hire foreign workers in specialty occupations, a classification that mandates highly specialised knowledge and a bachelor"s degree or higher in a specific field. Among the biggest sponsors this year are Amazon, Ernst & Young, Google, Amazon Web Services, Intel and Apple.
And, in addition to US-headquartered Cognizant Technology Solutions, India’s top IT companies such as Tata Consultancy Services and Infosys are also among the top 10 sponsors this year, as they’ve been historically.
“DHS continues to develop and implement regulations that increase efficiency and improve processes for employers and workers navigating the immigration system," US Secretary of Homeland Security Alejandro N Mayorkas said in the press release. The aim is to continue to attract global talent, reduce bureaucratic hurdles for employers, and prevent fraud and abuse within the immigration system, Mayorkas added.
One of the central changes proposed in the rules is the alteration of the H1B registration selection process to reduce the potential for misuse and fraud. Currently, the odds of an individual being selected in the lottery system increase with the number of registrations submitted on the person’s behalf.
When implemented, the proposed changes are expected to prevent this by ensuring that each unique individual is entered into the selection process only once, regardless of the number of registrations submitted for them. This modification aims to enhance the chances of a legitimate registration being selected while minimising the advantage of submitting multiple registrations for the same beneficiary, the press release notes.
“This administration is much more open to immigration than the previous one," Peter Bendor-Samuel, CEO of Everest Group, a leading outsourcing advisory in the US, told Forbes India by email. “They are attempting to streamline the process and eliminate some of the practices they see as abuse, so a more efficient process emerges."
“The attempt is to eliminate the loophole which some of the smaller firms have utilized to game the system," Bendor-Samuel adds. “If this works, it should make the process more equitable and allow talent to flow to the most needed areas."
“Our recruitment practices continue to evolve based on forecasts, aligned to focus around data science, cyber security, and machine learning," says the HR head mentioned earlier.
As to the Indian IT services companies, the major ones have been playing by the rules and by the spirit of the rules. Over time, this change should make a few more visas available and make the process more predictable. A more predictable and more fair process will benefit the large Indian companies, he says.
The new rules will also give applicants more freedom to choose among legitimate job offers, as each registrant who submits a registration for a selected beneficiary would have the ability to file an H1B petition on the beneficiary"s behalf, according to the press release.
Important provisions of the proposed rule include the following:
Streamlining processes:
The criteria for specialty occupation positions will be revised to reduce confusion and clarify that a position can encompass a range of degrees as long as there is a direct connection between the required degree/field(s) and the position"s duties.
Improving efficiency:
The new rules will codify that adjudicators should generally defer to a prior determination when no underlying facts have changed in a new filing.
More benefits and flexibilities:
Certain exemptions to the H1B cap would be expanded for non-profit entities, governmental research organisations, and beneficiaries not directly employed by qualifying organisations. Additionally, students on an F1 visa seeking to change their status to H1B would receive extended flexibilities.
The changed rules will also introduce new eligibility requirements for rising entrepreneurs, according to the press release. This is an area where one needs details. For example, currently India doesn’t have a treaty with the US for entrepreneurs from here to qualify for the E2 visa. Therefore, a liberalised H1B that might benefit Indian founders would be welcome.
Discouraging gaming of the system:
The rule would prohibit related entities from submitting multiple registrations for the same beneficiary, thus reducing misuse and fraud in the registration process. And the USCIS’ authority to conduct site visits would be codified. Non-compliance with site visits could result in the denial or revocation of petitions.
The bigger picture is that tech services itself is drastically changing, with the advent of AI and generative AI.
The age of making money by writing large volumes of code to overhaul legacy systems from offshore centres is coming to an end, Bernard Charles, CEO of Dassault Systems, a leading provider of 3D simulation software, told Forbes India recently. Dassault partners India’s largest IT services companies.
As customers look to take a lot of software services back in-house, and with the rise of the low-code no-code paradigm, these companies need to step their consulting capabilities, Charles added. This means going more local than ever in their biggest market, America, but also in Europe, Britain, Australia, Japan and other markets.
Indian tech services continue to hire local talent in the US, offshore work and engage in transformational digital projects, according to the HR head mentioned earlier.“Our sense is that the 2024 H1-B lottery will be based on the revised guidelines," the executive added.
First Published: Oct 25, 2023, 14:55
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