US Immigration Bill 2013 - Cholamandalam Securities

A group of bipartisan senators formally filed the immigration bill 2013 called "The Border Security, Economic Opportunity and immigration modernization Act of 2013". We have highlighted the key excerpts from the immigration bill. Raised the cap on H-1B visa from 65,000 to 110,000. Increased the current 20,000 exemption for US advance degree holders to 25,000 (advance degree graduates in science, technology, engineering and mathematics from US schools) Job openings must be posted on the Department of labor's website for at least 30 days before hiring an H-1B visa holders to fill the position Higher wages for H-1B visa workers. Offer 60 days transition period for job change for H-1B visa workers. Substantial increase in the visa fee. Currently, fee is roughly at US$2,000 per application.

- If the employer has 50 or more employees and more than 30% but less than 50% are H-1B or L-1 employees (who do not have a green card petition pending), the employer must pay a US$5,000 fee per additional worker in either of these two statuses.

- If the employer has 50 or more employees and more than 50% are H-1B or L-1 employees (who do not have a green card petition pending), the employer must pay a US$10,000 fee per additional worker in either of these two statuses. In 2014, companies will be banned from bringing in any additional workers if more than 75% of their workers are H-1B or L-1 employees. In 2015, the ban applies to companies if more than 65% of their workforces are H-1B or L-1 employee. In 2016, the ban moves to 50% of workforce.

Comments:

Typically Indian IT companies have 60-80% of US workforce on these visas. We reckon that these amendments to the immigration bill will cost Indian IT companies more time and money. Higher visa fee and higher wages for H-1B workers and / or local hiring, higher sub-contracting will result in margin erosion.

Source : Equity Bulls

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