Will Indian IT companies be forced to exit H-1B visa program? Steep fee hike to make significant dent in pockets

The US H-1B visa fee hike has raised concerns among industry representatives and immigration experts, who warn that it could pose significant challenges for Indian IT service providers and strain their finances.

Indian IT companies heavily depend on H-1B visas to bring thousands of highly skilled professionals to the US to fill specialty positions that are in high demand but short supply in the country, according to an ET report by Annapurna Roy.

In April, the USCIS implemented substantial fee increases for various immigration processes. The H-1B visa registration fee saw a staggering 2050% increase, rising from $10 to $215, while the application fee increased by 70%, from $460 to $780. Additionally, a $600 asylum fee was introduced for filing H-1B and other petitions, which experts argue is unrelated to non-immigrant work visas like H-1B.

"The drastic percentage increase and added asylum fee all at once makes things difficult," said Shivendra Singh, vice president - global trade and development at industry association Nasscom.

According to an analysis by the National Foundation for American Policy, the visa fee hikes could result in employers spending over $33,000 in legal and government fees for each H-1B visa petition filed for initial employment or employment extension.

Jonathan Wasden, managing attorney at immigration litigation firm Wasden Law, warned that the new rules might force Indian IT companies to withdraw from the visa process altogether.

Unlike product companies such as Apple and Google, or banking institutions that may only file one H-1B petition every three years, these IT firms are likely to incur significantly higher costs due to the need to file petitions more frequently.

Also Read | Why Indian IT’s reliance on H-1B work visas has plunged 56% in the last 8 years

Wasden believes that this is a deliberate attempt by the United States Citizenship and Immigration Services to eliminate Indian IT companies from the H-1B program, stating, "It is no secret to anyone who practices employment-based business immigration that USCIS has been trying for decades to eliminate Indian IT companies from the H-1B program. This is merely the latest tactic to achieve this goal," Wasden told ET. "They are trying to make the process so expensive for companies doing third-party placement that they will go out of business," he added.

Wasden represents US industry body IT Serve Alliance, one of the plaintiffs challenging the fee rule in court.

Nasscom also expressed concerns about the impact of the fee hikes on their member companies. Shivendra Singh says that the increase in filing fees comes at a time when there is a significant demand-supply gap in skills availability. He warned that any measure that complicates and raises the cost of addressing this gap could have a substantial impact on the ease of doing business and adversely affect the competitiveness of the US economy.

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In addition to the fee hikes, Singh pointed out that the proposed modernisation rule provisions, which aim to narrow the criteria for 'specialty occupation' and H-1B employees staffed at third parties, could have serious consequences if implemented in the future.

While some experts believe that the fee hikes will lead to a decrease in the use of H-1B visas over time, others suggest that companies will continue to bear the costs to secure the skills they desperately need. Cyrus Mehta, managing partner at immigration law firm Cyrus D Mehta & Partners PLLC, noted that Indian heritage companies have started to absorb the fee increase, viewing it as a cost of doing business in the US.

However, he also cautioned that the fee increase could become a burden, particularly for India-born workers caught up in green card backlogs, as H-1B extensions will need to be filed repeatedly on their behalf.



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