As expected and speculated, US president Donald Trump has signed an executive order that tells the technology companies in the US to hire more Americans and avoid foreign IT workers, including those from India. The order marks the formal review of the US H1B visa program that is used by technology companies including Indian firms like Infosys and TCS to hire Indian IT workers for jobs based in the US.
The H1B visa is specifically meant for highly skilled IT workers, however there are allegations that Indian companies use it to hire regular IT staff and in the process save money because they have to pay less to Indian workers compared to how much they will have to pay to the Americans for a similar position.
News agency Reuters noted that Trump signed the executive order on the H1B visa on April 19. The order puts the emphasis on America First, an slogan that was by Donald Trump during his presidential campaign and then again highlighted by him in his speech on the day he became president.
Reuters noted that the executive order was vague on many fronts, and did not change existing rules, but one objective, said Trump aides, is to modify or replace the current lottery for H1B visas with a merit-based system that would restrict the visas to highly skilled workers. Indian nationals are the largest group of H-1B recipients annually.
In addition to addressing the visas issue, Trump also ordered a review of government procurement rules favouring American companies to see if they are actually benefiting, especially the US steel industry.
As he nears the 100-day benchmark of his presidency, Trump still has no major legislative achievements. With his attempts to overhaul healthcare and tax law stalled in Congress, Trump has leaned heavily on executive orders to change policy. It was unclear whether the latest such order would yield immediate results. The H1B visas section included no definite timeline. The government procurement section did.
"We hope the goal of President Trump's executive order on the H1B program is 'mend it, don't end it,'" said Robert Atkinson, president of the Information Technology and Innovation Foundation, a technology industry group.
Going to a more merit-based H1B system could attract more people with advanced science and technology skills, Atkinson said in a statement. But he said some ideas could make the system ineffective, such as requiring advertisement of job openings for long periods to prove the unavailability of US workers.
Democrats said Trump's order was not strong enough, and too late, after thousands of visas were awarded this month in this year's lottery.
"For a president who has prided himself on his swift action when it comes to immigration, an interagency review of the program is a guarded and timid approach. It's too little, too late," said US Senator Dick Durbin, the No 2 Democrat in the Senate.
Critics of the program say most H1B visas are awarded for lower-paid jobs at outsourcing firms, many based in India. That takes work away from Americans, lowers wages and keeps Americans from being trained in tech-related fields, they say.
"Right now, widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries," Trump said.
Critics say the lottery benefits outsourcing firms that flood the system with mass applications for visas for lower-paid information technology workers.
"Right now H1B visas are awarded in a totally random lottery and that's wrong. Instead, they should be given to the most skilled and highest paid applicants and they should never, ever be used to replace Americans," Trump said.
More than 15 per cent of Facebook Inc's US employees in 2016 used a temporary work visa, according to a Reuters analysis of US Labor Department filings. Facebook did not respond to requests for comment.
Infosys, India's No 2 IT services firm, has said previously that it is ramping up work on on-site development centers in the United States to train local talent in an effort to address the visa regulation changes under consideration.
It warned last week that onerous changes to US visa rules could affect its earnings.
NASSCOM, the Indian IT service industry's main lobbying group, said it backs efforts to root out H-1B abuses, but said the idea that H1B visa holders are cheap labour is inaccurate. Indian Prime Minister Narendra Modi urged Washington in February to be open minded on admitting skilled Indian workers.(with Reuters inputs)