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USA Bars Federal Agencies from Hiring H-1B Visa Holders

  • 06 Aug 2020
  • 5 min read

Why in News

Recently, the President of the USA has signed an executive order barring federal agencies from hiring H-1B visa holders and other foreign workers in place of USA citizens or green card holders.

Key Points

  • H-1B Visas:
    • The H-1B visa is a non-immigrant visa that allows USA companies to employ foreign workers in speciality occupations that require theoretical or technical expertise.
    • The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China to keep costs in check.
      • Such jobs in developed countries pay minimum wages, which are not lucrative enough for employable individuals of these countries.
  • Executive Order:
    • The executive order has asked the federal agencies to stop replacing USA workers and green card holders with H-1B visa holders or other foreign workers.
      • A green card holder (permanent resident) is someone who has been granted authorization to live and work in the USA on a permanent basis.
    • The order has also directed all agencies under the federal government to review the contracts they gave out in the two previous financial years and the performance of such contracts or subcontracts.
      • The heads of departments will undertake an audit and check whether the jobs could have been performed by the USA workers and whether opportunities for domestic workers were impacted by such hiring.
    • The Department of Labour will also finalise guidelines to prevent H-1B employers from moving H-1B workers to other employers’ job sites to displace American workers.
    • The order seems to be an extension of an earlier order in which the entry of non-immigrant visa workers had been banned until the end of 2020.
  • Background:
    • The USA government under Trump leadership is moving towards a more conservative work visa regime under the America First policy.
    • It has alleged Indian and Chinese IT companies of sending workers at very low cost, which hurt the prospects of skilled workers in the USA.
    • The immediate trigger was an announcement by the federally-owned Tennessee Valley Authority (TVA) that it would outsource 20% of its technology jobs to foreign countries.
      • This action could result in loss of jobs for up to 200 highly-skilled American tech workers in Tennessee and could also lead to possible leaking of sensitive user data and theft of intellectual property, detrimental to national security.
    • The USA government has held that outsourcing of jobs should be avoided as far as possible because it is especially detrimental in the middle of a pandemic, which has already cost millions of Americans their jobs.
  • Impact on Indian Workers in the USA:
    • The H-1B visa is the most sought-after among Indian IT professionals.
    • Apart from workers hired by federal agencies, the order will also impact workers of Indian companies that are on contract with federal agencies.
      • Bigger federal agencies such as state-run banks give the contract for supply and maintenance of their databases and other services to bigger Indian companies such as Infosys, TCS or Wipro.
  • Impact on the USA:
    • The order comes at a time when there is a huge shortage of STEM (Science, Technology, Engineering and Mathematics) skills in the USA that workers on short-term non-immigrant visas like H-1B and L-1 help bridge.
    • Such a measure could slow down the recovery phase of the USA as countries start unlocking.

Way Forward

  • Suspending the visas and barring federal agencies from hiring H-1B visa holders will only weaken the USA's economy in the long run.
  • Immigrants have played a crucial role in making the USA a global leader in cutting edge technology and there is a need for the USA to recognise it and stop taking such drastic steps.
  • Politics should not be placed above smart policy and inclusivity and there is a need to strengthen both. The ingenuity of migrant workers should be harnessed to revive an economy in dire straits especially in pandemic struck times like this.

Source: IE

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