Will Biden save the H-1B?

All signs point to the visa being salvaged, but the reality is more nuanced than that.

concept showing Indian passport with US currency notes or Dollars with american flag in the background, applying for US / american tourist or H-1B visa or travel visa

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Outgoing US President Donald Trump's political campaign for his second presidential term may have been in full swing late last year, but that didn't stop him from continuing his relentless onslaught against the H1-B visa, which had been comprehensively consumed by Indian IT companies until now.

The recent rules, as part of an overall effort to curb nearly all forms of immigration, have come as a further headache to US companies desperate for global talent at affordable prices -- especially in hot areas like artificial intelligence (AI) and robotics which are now beginning to see applications across a wide spectrum of industries and companies.

In the latest round of rules, companies will have to shell out salaries for entry-level H-1B workers that are in the 45th percentile of wages for that profession versus the prior level of 17th percentile. Higher-skilled workers would receive salaries in the 95th percentile from the 67th. In other words, there are pretty huge pay bumps across the board.

Another potentially more constricting rule accompanying Trump's H-1B changes is that foreign workers are now required to have the exact qualifications for jobs advertised, rather than disparate or related degrees which, as you can imagine, are completely removed from the diverse skillsets required in technology today.

In other words, a candidate with a degree in computer science, applied economics, or statistics would not be able to apply for a job in the data sciences field as they would not have a degree in "data sciences", which is not a widely marketed degree.

Let's say that what this candidate does have, however, is a decade of senior-level experience working in data sciences or a closely related field. They still won't make the grade because work experience is no longer a factor for H-1B approvals.

Consequently, it is almost impossible to get an H-1B today for a job in technology. The final nail in the coffin is that the H-1B validity period has been slashed from three years to only one.

The rules have since been challenged in court by plaintiffs, such as Cal Tech and University of Utah, for more than doubling salary requirements in many job categories which would cripple most companies hiring H-1B employees not from the IT services field.

But let's put that, and the fact that his wife, Melania Trump, came to the US on an H-1B visa that was sponsored by Trump's modelling agency, aside for now.

END OF GAMING

The fact is, whether Trump was genuinely concerned about the tech jobs arena or whether it was just a cynical political gambit and part of his overall xenophobic impulses, his actions have in fact begun to offer much needed correctives to a flawed visa category.

Some Indian IT companies and a number of smaller, nondescript ones have, for some time now, gamed the H-1B lottery system by pumping in more Labor Condition Applications than needed for any given position.

This dubious approach gave those Indian firms far higher odds for getting an approval for each job. Droves of lesser-paid IT workers have since come over to the US to work on the IT systems of US companies, who were equally complicit in participating in this process. In fact, they were probably the original architects of replacing in-house American IT workers with Indians. Labour arbitrage thrived.

Ultimately, smaller, specialised tech companies in the US and top global talent with advanced skills have suffered from this gamification of the system. Dreams have been dashed and careers have suffered. There have just been too few H-1B application slots available, especially if Indian IT firms gobble them up for far lower-skilled positions.

The H-1B visa has not been doing its job, plain and simple. Therefore, when Trump unleashed his wrecking ball by putting in place a hyper-aggressive review system -- one that did not take into account prior visa decisions about applicants and required overly onerous documentation needs -- it led to a dramatic rise in denial rates for new H-1B petitions. At face value, Indian IT seemed to have reaped what it had sown.

Except Trump went too far. While prioritising Masters degree applicants over Bachelor's in the lottery pool was a minor but positive rule tweak, one unnecessary, vindictive policy that Trump implemented now prevents the automatic renewal of visas for spouses of H-1B visa holders, which thereby prevents them from obtaining work and having a life of their own in the United States. 

It is amidst this fractious landscape that Biden has arrived and many are anxiously awaiting his exact moves pertaining to the H-1B. Could he in fact save it from becoming a relic and thereby help America's demand for top talent?

BIDEN'S CHOICE

On the surface, Biden has certainly made all the right noises about moving in the right direction.

"My immigration policy is built around keeping families together, modernising an immigration system by keeping families, unification and diversity as pillars of our immigration system, which it used to be," Biden said in his run-up to the elections.

According to his pre-election policy paper, Biden said that he would exempt any kind of cap for recent graduates of PhD programmes in STEM fields in the United States, going so far as to promise to award them green cards.

Biden's policy paper also stated that he would help family-based immigration by allowing spouses to be treated as "immediate relatives" and children to accompany the applicant, which could not be more contradictory to the Trump era.

This could prove to be a crucial change for US innovation. Apparently, over the past decade, eight companies that have been involved in developing a coronavirus vaccine -- Gilead Sciences, Moderna Therapeutics, GlaxoSmithKline, Inovio, Johnson and Johnson Pharmaceuticals, Regeneron, Vir Therapeutics, and Sanofi -- have brought over 3,310 biochemists, biophysicists, chemists, and other scientists from overseas thanks to the H-1B program.

In fact, Biden could potentially seek to expand the total number of H-1B visas, which tech companies have been begging for, rather than leaving the visa crippled. 

REALITY CHECK

These may appear to be significant shifts but, in totality, it's not much at all. Foreign-born PhDs rarely join IT services companies. Instead, they take their uniquely honed skills and migrate towards all of the specialised fields where cutting-edge work and high salaries exist such as AI, robotics, and big data.

Moreover, Biden's policy paper mentioned that "high skilled temporary visas should not be used to disincentivise recruiting workers already in the US for in-demand occupations", although it's unclear what this means exactly.

For the entry to mid-level H-1Bs, not much assistance appears to be in sight. "With all that's playing out, it doesn't matter who won the election, no one is going to make it easier to get the H-1B," said Mark Davies, global chairman at Davies & Associates, LLC, an immigration law firm based in New York, in Forbes Magazine.

"The speed at which H-1Bs become harder to obtain might be different. But I very much doubt that a Democrat government is going to ease it up -- there's no congressional interest in doing that."

In other words, don't expect to see radical changes anytime soon. All of this is to say that many of Amazon's senior staff, who include data scientists and software engineers, would have to leave the United States to cite the example of just one company's risk exposure. Plus, the 40% increase of H-1B wages could cost employers close to $200 billion over 10 years.

Who knows, maybe all the melodrama around the H-1B will become old news -- or at least when it comes to Indian IT's side of things. Things are changing rapidly after all, especially during the pandemic when there's a new realisation of what is capable of being delivered remotely.

For Indian IT, maybe the H-1B will truly become a thing of a past, relegated to a category it was once designed for.

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