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Trump eyes end to an H-1B system that favors largest outsourcers

Patrick Thibodeau, Sharon Machlis | Feb. 13, 2017
The top 10 H-1B list explains why Trump wants to change the visa lottery

Instead, the Trump administration is hinting at changes that may end the random lottery distribution and replace it with a merit system. It could distribute visas based on wages or whether a visa holder was educated in the U.S. It could favor non-dependent H-1B companies -- a legal definition for firms that have less than 15% of their staff on the visa -- over dependent firms, which includes all the all the large offshore firms.

These changes are worrisome to large offshore outsourcing firms, but to those in India in particular. NASSCOM, India's large IT industry group, is trying to meet this month with Trump administration to make its case.

R. Chandrasekhar, NASSCOM president, says he doesn't have a problem with the administration trying to protect employment opportunities for U.S. workers, provided that whatever changes are made "are applied uniformly."

A split on the visas that favored non-dependent firms over H-1B dependent firms would be, says Chandrasekhar, "highly discriminatory."

"We are fully aware of the skills shortage that exist in the U.S.," said Chandrasekhar, "so we don't think that the employment opportunities for qualified Americans are being affected."

But Trump's new attorney general has repeatedly argued that there is no skills shortage.

"The sad reality is that not only is there not a shortage of exceptionally qualified U.S. workers, but across the country thousands of U.S. workers are being replaced by foreign labor," said Sessions, one year ago this month.

The offshore firms are trying to adjust. Cognizant Technology Solutions told financial analysts on a recent earnings call that is boosting its U.S. hiring, and said it hired 4,000 citizens and permanent residents last year. But it was not clear how many the company now employs in the U.S.

Some of the people hired by Cognizant are "rebadged," or transferred from their original employer. IT workers at Cengage Learning in Mason, Ohio were shifted to Cognizant in 2015 and have been training workers in India. Some are now worried they are getting laid off, said one worker who spoke on the condition of anonymity.

"People are upset" about "what's happening to our country and our jobs," said this IT worker. "I hope he [Trump] can do something about these visas because this is where the middle class is losing their jobs."

It remains to be seen whether changes to the H-1B program will fundamentally impact offshore outsourcing.

David Rutchik, executive managing director of business transformation and outsourcing at advisory firm Pace Harmon, believes that additional restrictions on H-1B visa use will have a "measured" impact on the industry.

Restrictions may prompt more U.S. hiring by outsourcing firms, but that "is something we think makes sense for their businesses anyway and should make them more competitive," he said. It "would be a direct, positive impact of the revised visa provisions," said Rutchik.


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