The anti-immigrant measure — Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States — by the previous Donald Trump government would have increased H-1B wages by as much as 30%.
The review by US President Joe Biden’s administration is expected to provide relief to companies that depend on computer science engineers from countries such as India.
The rule was published in the Federal Register on January 14 but was put under what is known as ‘Regulatory Freeze Pending Review’ once Biden took charge on January 20.
This rule, which was supposed to come into force on March 15, will now be effective from May 14.
In the meanwhile, the US Department of Labor will open it up for public comments for 15 days.
Indian nationals account for two-thirds of H-1B visa holders but have been increasingly working for US technology companies that hire them to meet a shortage of local tech talent in the United States. Last year, four out of the five top recipients of H-1B visas were American companies. Amazon received the highest number of H-1B visas, followed by Tata Consultancy Services, Cognizant, Microsoft and Google.
The rule called for increasing wage levels of H-1B workers and employment-related green card applicants in phases over the next few years. On average, this would have increased wage levels by about 30% across different skill levels. The wage escalation would have come into effect from July 1.
The H-1B selection process for financial year 2022, for which companies would have to submit their applications in April, will remain unchanged though.
“The rule was, in any event, scheduled to take effect on July 1, 2021. Therefore, the 60-day pause does not have that much of a practical effect unless the 60-day pause will allow DOL to reconsider putting this rule to effect. The 15-day comment period further allows the public to send in comments, and thus convince the new administration to rescind the rule,” said immigration attorney Cyrus Mehta.
Larger technology firms are expected to absorb the costs, but startups and services companies that have built their business models on current wage structures to bring in workers on the H-1B visa would be hit.
“This rule increases the prevailing wages to artificially high levels,” Mehta said. “It will affect companies who wish to file H-1B visas or sponsor skilled foreign workers for green cards as they will have to pay higher-than-market wages. This may deter companies from growing and could also result in companies terminating workers.”
IT industry lobby group, National Association of Software and Services Companies (Nasscom), has said previously that the US technology sector faces a talent shortage.
There is a lack of required Science, Technology, Engineering and Mathematics talent in the US, highlighted by the high degree of overall unemployment and over 750,000 job vacancy postings for jobs in computer occupations as of January 13, 2021, a 20% increase since May 2020, Nasscom said in a statement on January 21.
While publishing the rule just before Trump left office, US Secretary of Labor Eugene Scalia had said that the changes would help ensure that the foreign worker programmes function as US Congress intended, while securing opportunities for stable, good-paying jobs for American workers.