H-1B Visa Fees Could Rise by $2,000 for Each Application

Foreign outsourcing companies are facing fee hikes for work visas in a measure attached to a border security bill that passed the Senate. If signed into law, work visas will be more expensive and politicians can tout protecting American workers and securing the border, but will any of it help grow technology jobs in the U.S.?

The cliche "everything is politics" couldn't be more true when it comes to work visas in the United States.

If a border security bill makes it to the desk of President Obama, fees for H-1B and L-1B visas will increase by $2,000 each for a large segment of the visa-using companies. The measure is attached to a much larger $600 million bill on border security that passed the Senate Aug. 5. The bill employs the visa hike to help pay a fraction of the cost for an increase in border security personnel and technologies.

The fees will be for those large outsourcing companies that have more than 50 percent of their U.S.-based employees using H-1B and L-1B visas-companies like Wipro, Infosys Technologies, Tata Consultancy and others-and could affect smaller companies in the United States that use a large percentage of visa workers.

The bill in the Senate was sponsored by Democratic leaders Sen. Chuck Schumer of New York and Sen. Claire McCaskill of Missouri, but it's not the only bill in Congress. The House has its own $700 million border security bill, but it does not include the provisions on visa fee hikes. Democrats are seeking to help thwart what they characterize as outsourcing loopholes in current H-1B and L-1B visa practices-those foreign companies using large groups of less costly workers from abroad rather than U.S. workers in U.S. positions.

The Indian trade group Nasscom expects this measure to cost Indian companies between $200 million and $250 million if signed into law. Nasscom put out a statement Aug. 6 on its reaction to the bill:

"We would like to reiterate that Indian companies only take a fraction (under 12%) of the total H-1B visas and US companies, who also use these visas in large numbers, will remain unaffected by this bill, thus unfairly reducing the competitiveness of Indian firms. We believe this will have negative impact on Indian companies which are investing in the US, employing US talent, driving US technological talent and are overall aiding the US economic recovery. In addition to this, in absence of a totalization agreement, Indian firms and Indian citizens pay in excess of $1 billion to the US in form of Social Security, with no benefit or refund.

"This bill is indirect protectionism and contrary to the Obama administration's repeated pleas to the international community to avoid taking such actions. The adoption of these provisions by the US hinders the free movement of people essential for promotion of free trade. This move will also lead to diminished inflows of Indian talent, which is helping to drive US tech innovation and spur US recovery."

Sen. Schumer has a different viewpoint.

"We're talking about foreign companies that more than half of their employees," Schumer was quoted in an AFP article. "All we're saying is, you're going to have to pay more for those visas. ... What it's going to do is hopefully create some vacancies for Americans at some of these higher skilled jobs that these companies-foreign companies-are using the visas."