The Indian CIO’s Checklist for the H-1B Season

Sudha Nagaraj Bharadwaj, Journalist | 4/11/2014 | 15 comments

Sudha Nagaraj Bharadwaj
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.

View Comments: Newest First | Oldest First | Threaded View
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Gigi   The Indian CIO’s Checklist for the H-1B Season   4/21/2014 1:11:13 AM
Gigi
Re: Re : The Indian CIO’s Checklist for the H-1B Season
"Even though the payment given to offshore IT companies outsourced to come and work in the US may be lower than those paid to local workers, it is worth noting that in relative terms the offshore workers will still prefer to work in the US."

SunitaT, any particular reason behind such rush?
Gigi   The Indian CIO’s Checklist for the H-1B Season   4/21/2014 1:09:57 AM
Gigi
Re: No problem!
"I still cant help wondering why we still have an unemployment problem here if we can afford to employ more than 100,000 people from other areas to work here."

Anand, that's right. if there is unemployment, then why they are offering employment opportunities to outsiders?
SunitaT   The Indian CIO’s Checklist for the H-1B Season   4/19/2014 12:17:30 PM
Re : The Indian CIO’s Checklist for the H-1B Season
Even though the payment given to offshore IT companies outsourced to come and work in the US may be lower than those paid to local workers, it is worth noting that in relative terms the offshore workers will still prefer to work in the US. As such, it is obvious that the number of applications will only continue to increase and therefore if you want to stand any chance of beating the competition and lay your hands on a visa then you must start your preparations much, much earlier than the rest.
Anand   The Indian CIO’s Checklist for the H-1B Season   4/16/2014 2:36:54 PM
Re: No problem!
Very interesting piece indeed, I actually had no idea that we receive so many foreign applications every year. Okay, I understand that it is cheaper to hire workers from the less developed countries than to hire locals who have similar qualifications and experience but I still cant help wondering why we still have an unemployment problem here if we can afford to employ more than 100,000 people from other areas to work here. Maybe the companies should just to[p up the balance on the salary differences, consider it as part of their corporate social responsibility, and start hiring locals. No offence to expatriates J
Gigi   The Indian CIO’s Checklist for the H-1B Season   4/16/2014 2:12:00 AM
Gigi
Re: H-1B
"Also, not all H-1B visas are for IT workers alone. It is for specialised occupations --though perhaps the applications from India are mostly from IT sector these days."

Sudha, thanks for the clarification. I think most of the applicants are from Indian IT sector.
Sudha N Bharadwaj   The Indian CIO’s Checklist for the H-1B Season   4/15/2014 12:18:01 PM
Re: H-1B
@ Gigi, for all foreign nationals. But not all H-1B non-immigrant visas are subject to this cap. Under fee trade agreements with Chile and Singapore, nearly 7000 visas are set aside. If they are not allotted, or those which are not allotted are included in the H-1B program the following year. For work in Guam and Commonwealth of Mariana Nations, there is a waiver. 

Also, not all H-1B visas are for IT workers alone. It is for specialised occupations --though perhaps the applications from India are mostly from IT sector these days.
Gigi   The Indian CIO’s Checklist for the H-1B Season   4/15/2014 4:58:28 AM
Gigi
Re: No problem!
"Wages are kept lower in certain H-1B related industries as foreigners will accept a lower wage for the opportunity to work in the United States. So American companies will likely save money by hiring more H-1B visa holders."

HH, there are possibilities for such misuse also. I think labour departments may watching and scrutinizing such issues.
Gigi   The Indian CIO’s Checklist for the H-1B Season   4/15/2014 4:56:27 AM
Gigi
H-1B
"the Congress-mandated cap of 65,000 applications has been reached within five days of starting to accept them from April 1, 2014."

Sudha, this 65000 H1B visas are only for Indians or that's the annual quota for all foreigners, including Indians.
tekedge   The Indian CIO’s Checklist for the H-1B Season   4/14/2014 1:31:42 PM
Re: No problem!
@H_H you hit the nail on the head! Yeah the costs definitely make the H1 applicants more attractive to companies!
tekedge   The Indian CIO’s Checklist for the H-1B Season   4/14/2014 1:29:19 PM
Re: No problem!
 I hope you mean the population who can code and work in the IT industry!
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