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US administration orders H-1B visa reforms

Short on time? Here are the highlights:

  • An executive order from the US President has triggered a wholesale review of the H-1B (“working visa”) programme in the US
  • The nature and direction of the planned reforms are not yet clear but it appears that the changes under consideration include raising wage requirements for visa holders and/or prioritising applicants with advanced degrees
  • Any changes to the programme will have particular resonance in India, which has emerged as a key sending market for the US in recent years, and particularly for STEM enrolments

Following months of speculation around the future of the United States’ H-1B visa programme, the US administration formally announced plans yesterday to reform this key visa category. On 18 April, Donald Trump signed an executive order that directs US government officials to “as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid [applicants].”

The H-1B is commonly called a “working visa” as it is the most-frequently used type of visa for temporary employment status in the US. Currently, a limit of 85,000 new H-1B visas are granted annually (including 20,000 set aside for those with advanced degrees), and in recent years the visas have been awarded on a lottery basis. In 2016, the number of applicants was nearly three times greater than that annual quota of 85,000 visas.

As we noted in a recent report: the H-1B programme has particular relevance to technology industries in the US, and to Indian students who pursue advanced STEM degrees in America. For many graduates, it provides a means to stay and gain work experience in the US after graduation. For some, it is also a path to permanent residency.

The programme has been criticised in the past, however, as a mechanism through which foreign outsourcing companies are able to displace American workers, and, in some cases, to bring in foreign workers at below-market wages. This is, in essence, the idea that underpins the just-ordered review of the programme. Speaking at a public appearance yesterday on the heels of signing the order, Mr Trump said that the H-1B programme “should include only the most skilled and highest-paid applicants and should never, ever be used to replace American workers.”

The new executive order is unclear as to what sort of reforms can now be anticipated. However, a transcript from a related press briefing nods at some steps that may be under consideration by US officials: “You could be looking at things like if we could adjust the wage scale – a more honest reflection of what the prevailing wages actually are in these fields…You could see potential – and again, we’ll have to get a full legal analysis and review from all the departments, but right now the lottery system disadvantages master’s degree holders. There’s ways that you could adjust the lottery system to give master’s degree holders a better chance of getting H1Bs relative to bachelor’s degree holders.”

All eyes on India

India is hardly the only country whose students have an interest in the H-1B programme, but, given the proportion of Indian students who pursue advanced STEM degrees in the US, any significant changes to the H-1B are bound to be tracked closely there. Indeed, the Indian press has been following the story closely in recent weeks with regular coverage of possible H-1B reforms leading up to yesterday’s announcement.

Economic Times of India coverage of Mr Trump’s executive order describes the directive as a “body blow for Indian IT and professionals.”

From a recruitment point of view, the outlook for Indian students is also notable because of the country’s importance as a sending market for US higher education. Nearly 16% of all foreign students in the US come from India – placing the market second only to China for US recruiters – and India has certainly been one of the fastest-growing source markets for the US in recent years, with total enrolment increasing by 25% between 2014/15 and 2015/16 alone.

“Higher education ranks third behind technology-related occupations as the largest industry sponsor of recipients of H-1B visas,” notes a related report from The Chronicle of Higher Education.

The Chronicle goes on to note the possible impact of yesterday’s order on foreign recruitment: “The order could have an impact on American colleges’ recruitment of students from abroad. For many international students, the opportunity to stay in the United States, even temporarily, after graduation and gain work experience is almost as valuable as an American degree itself. Any policy that might erect hurdles on the pathway from college to work could depress international enrolments…The new executive order may only reinforce the perception of the United States as unwelcome to people from other countries.”

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