Donald Trump suspends H-1B, H-4 visas till end of 2020. Impact of visa ban

US President Donald Trump suspended H-1B, H-4, L and other temporary work permits, which he said is aimed at protecting local workers who are facing unemployment due to the spread of coronavirus. The decision was blasted by the US tech industry, which said it would hurt innovation and delay the recovery of the US economy.

“We have a moral duty to create an immigration system that protects the lives and jobs of our citizens,” Trump in a statement. The suspension will be effective till December 31.

Trump said that between February and April of 2020,more than 20 million United States workers lost their jobs in key industries where employers are currently requesting H-1B and L workers to fill positions. Also, the May unemployment rate for young Americans, who compete with certain J nonimmigrant visa applicants, has been particularly high — 29.9 percent for 16 19 year olds, and 23.2 percent for the 20-24 year old group.

“The entry of additional workers through the H-1B, H-2B, J, and L nonimmigrant visa programs, therefore, presents a significant threat to employment opportunities for Americans affected by the extraordinary economic disruptions caused by the COVID-19 outbreak,” he said in the order.

Indian nationals receive nearly 70% of the 85,000 H1-B visas issued each year. The restrictions will apply only to new work visas and not to existing holders who are in the United States currently. Those visa holders who are outside the US will not be able to return to the US.

Who is impacted?

The order will not impact those who are already in the US with the valid non-immigration visa and those already in the US. However it will impact foreign nationals, including Indians, who are applying for a fresh visa. It will also affect those in India with valid skilled worker visas such as H-1B, L-1/L-2 as they will not be allowed entry into the US till the ban is in place.

In terms of Green Cards, this is unlikely to impact those in the US and will affect those applying for Green Cards from outside the country.

As per the order, this will not affect those who enter the country to provide temporary labour or services essential to the United States food supply chain. The order further states that those whose entry would be in the national interest as determined by the Secretary of State, the Secretary of Homeland Security, or their respective designees.

How will it impact Indian IT companies?

This will have a significant impact on Indians given that we are the biggest beneficiaries of the visa. There are about four lakh H-1B and one lakh L-1 Indian visa holders in the US employed in several tech and IT firms. A Kotak Institutional Securities report said that a ban of H-1B and L-1 visas beyond September will affect the talent supply chain of the IT companies even if the companies have increased their localisation in the US, which is more than 50 percent.

Indian IT companies are amongst the biggest beneficiaries of the US H-1B visa regime, and have since 1990s cornered a lion’s share of the total number of visas issued each year. As of April 1, 2020, the US Citizenship and Immigration Services (USCIS) had received about 2.5 lakh H-1B work visa applications, according to official data. Indians had applied for as many as 1.84 lakh or 67 per cent of the total H-1B work visas for the current financial year ending March 2021.

Apart from the suspension of these work visas, the executive order signed by Trump has also made sweeping changes to the H-1B work visa norms, which will no longer be decided by the currently prevalent lottery system. The new norms will now favour highly-skilled workers who are paid the highest wages by their respective companies.

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