Lobbying fails, H-1B visa limit falls to 65,000

by CXOtoday Correspondent    Oct 01, 2003

The annual limit for H-1B visas has been officially locked at 65,000, declining sharply from the earlier figure of 195,000.

The US government plans to bring the rule into enforcement from today.

The decision has come as a major setback to the Indian IT industry, which has been lobbying hard to freeze H-1B visa limits at its current levels. The cumulative efforts of many IT organizations, some which had the support of US corporations, have failed.

Indian IT professionals are among the largest users of H-1B visas, with US buying maximum talent from its technical pool. The H1-B visa cap was raised to 195,000 in ¨02. This particular legislation had a ’sunset¨ clause. According to it, the limit would have automatically been nullified on October 1, 2003, forcing the H1-B visa annual cap to drop back to 65,000 visas.

The H1-B visa issue has generated a lot of controversy in the US. Several trade unions representing local technology workers have been lobbying against these work permits. The slowdown in the IT industry, combined with an overall drop in US economic growth, has resulted in a number of job cuts.

H1-B visa users have been at the receiving end of mounting criticism from unemployed American professionals for taking their jobs. These visa users are also seen as supporters of the outsourcing trend, further aggravating local labor unions.

The ‘H-1¨ visa was created in the early 1950s to give skilled foreign workers a permit to reside in the United States. The ‘H1-B¨ category was added in 1990 to give foreign workers an opportunity to permanently relocate to the United States.

In 1999, under pressure from high-tech companies and other manufacturers, Congress expanded the limit from 65,000 to 115,000. It raised the cap again to 215,000 in ‘00 and to 195,000 in ‘01 and ‘02.

Top Indian companies have been curtailing the use of H1-B visas for sending employees to the US.

However, it is unlikely that the outsourcing trend will be affected by the decision. Most companies have shifted to the use of L-1 visas (used for intra-company transfers).

Recruitment agencies exporting human resource to US corporations are likely to be hit the hardest by this move.