By BusinessLine

The proposal might impose an additional financial burden on Indian IT companies.(Representative image)

U.S. Labor Secretary seeks an increase to train Americans in ‘tech activities’

 

Engineers hoping for an onsite in the US are set to receive another jolt as the Trump administration could soon increase the H-1B visa fee further, pushing information technologies companies to hire locally in the U.S.

 

May 07, 2019 –  U.S. Labour Secretary Alexander Acosta told US lawmakers today that an increase in the H-1B visa application fee will raise funding for the expansion of an apprentice program, which trains American youths in technology-related activities.

While exact details of the visa-fee hike were not disclosed, Acosta, who was testifying before a Congressional committee on an annual budget for the U.S. Department of Labor for fiscal 2020, argued that foreigners hurt American workers by competing for jobs and driving down wages.

Indian IT companies so far have been the biggest beneficiaries of the H-1B visa, but the increased visa fee in the last few years along with higher scrutiny under the Trump administration have already resulted in a rapid decline in applications from India.

According to estimates, nearly 25 per cent of H-1B visa applications were rejected last year, forcing companies to cut down on the applications.

While the Trump administration is pushing for local hiring by restricting migration, IT companies feel that there just isn’t enough IT talent available in the US. Most Indian IT services companies are heavily investing in hiring local talent in the US but the lack of availability of talent is forcing them to look at hiring in locations such as Canada and Mexico.

Large Indian IT services such as TCS, Infosys and Wipro are also heavily investing in STEM programmes in the US to develop IT talent in the country. All the large companies have also nearly doubled their US hiring in the last couple of years.

Expanding apprenticeships

According to Acosta, last year, the Department of Labor launched a sector-based grant fund to invest $150 million to expand apprenticeships in those in-demand industry sectors such as information technology, healthcare, and advanced manufacturing.

This grant-funding opportunity introduced a new approach — a 35 per cent private-sector match requirement — which brought in an additional $57.7 million from the private sector, Acosta said.