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The modification, proposed by the previous administration under Donald Trump, was introduced last week seeking changes to the terms of employees placed at third-party locations and called for the end client to also be responsible for the employee.
This would have made it more expensive for services companies to place employees at client sites as employees would have had to be paid at the prevailing wage rates at client organisations.
Immigration experts said the rule was unlikely to be revived by the new administration headed by President Joe Biden.
However, recent changes introduced by Trump such as higher wage requirements may not be reversed.
“The Biden administration has expressed support in overhauling the (H-1B) program and making it a wage-tiered system. Thus, even though this version of the regulation could be enjoined or delayed, we should expect the Biden administration to implement something similar,” said Nandini Nair, partner at law firm Greenspoon Marder.
Earlier this month, a final rule calling for higher wage levels was published, which makes it harder for small companies and startups to hire H-1B workers. This is also applicable to employees being sponsored by their employer for a green card. Services companies will either have to absorb the higher wages or pass it on to clients, both of which could have a business impact.
This rule has now been frozen for 60 days till March 21.
The ban on issuing new H-1B visas, which the Trump administration had extended March 31, is, however, still in place.
“During that 60-day pause, the administration can issue a new rule to rescind the old rule or such a pause would give more time to challenge these rules in court if the Biden administration decides to go along with them. I can see the Biden administration being sympathetic towards the Department of Labor wage rule that increases the wage requirement to be paid to H-1B workers,” said immigration attorney Cyrus Mehta.
Meanwhile, demand for jobs in computer occupations continues to rise in the United States.
As of January 13, there were over 750,000 job vacancies posted, a 20% increase compared to May 2020.
“This is testimony to the fact that the current workforce cannot bridge the skills gap in the country,” said Shivendra Singh, vice president, global trade at IT industry lobby group Nasscom.
While Indian services companies have been reducing their dependence on the H-1B visa in the last few years, it is still an important part of their overall strategy. “The changes are detrimental and will harm the US economy,” Singh said.
On his first day in office, US President Joe Biden proposed a Bill which, if passed, will reduce wait times for Indians to get a green card.
“The new Bill, if it results in the infusion of hundreds of thousands of visas each year, will drastically reduce backlogs. It will also provide work authorization for H-4 spouses and prevent children from aging out. All these measures, if passed by Congress, will benefit Indians seeking green cards in the US. This Bill would be a great improvement over the previous Bill in providing relief to Indians who have been trapped in decades-long backlogs,” Mehta said.