Senate immigration bill may push back on globalization

Sources say legislation may tighten the ability of large IT services firms to use H-1B visas

The long-awaited U.S. Senate comprehensive immigration bill, which could be released on Tuesday, will likely contain provisions onerous to offshore outsourcing firms that are dependent on H-1B visas.

The bill may be seen by India as an attack on its offshore outsourcing industry, which gets about 50% of its revenue from North American customers.

Indian officials and trade groups are already raising alarms in advance of the bill's release.

A bipartisan Senate group, the so-called "gang of eight," has been developing the bill. A hearing on the bill is expected on Friday.

Details remain murky, but sources close the negotiations are expecting that the bill will make it difficult for IT services firms to use large numbers of H-1B visas to hire workers.

Obstacles to H-1B visa use may include escalating fees that would rise with the percentage of a firm's U.S. workforce on a visa.

The bill could also include a formula that requires large H-1B users to pay higher wages for some workers. They can do this by stipulating a higher prevailing wage tier for some workers.

Access to H-1B visas may also be linked to a willingness of IT services firms to shift workers to permanent residency or green cards.

Som Mittal, president of Nasscom, India's largest industry group, told The Times of India that such restrictions are "discriminatory" and are a trade issue.

Similarly, India's U.S. ambassador, Nirupama Rao, in an op-ed in USA Today, urged lawmakers to "consider the impact of their decisions on the ability of both U.S. and foreign-based companies to expand now and in the future."

The view from India is that the H-1B visa is as much as part of routine cross-border trade as the purchase of, for instance, a Boeing plane. Writes Rao, "a generous visa policy for highly skilled workers would help everyone; both nations would come out winners."

Supporters of liberal H-1B visas policies, as it pertains in offshore outsourcing, argue that restrictions on H-1B use may prompt offshore firms to find ways to reduce their reliance on U.S. based workers and do more work overseas. It may, as well, force them to hire more locally-based workers.

For IT workers, the H-1B visa, however, is often seen as tool for replacing them with lower wage workers.

Whatever Senate bill makes it out of committee still faces fights in the Senate and the House.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is

Copyright © 2013 IDG Communications, Inc.

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