H1B Contract Employees Of Indian Firms Face An Uncertain Future; How Long Can They Survive?

On Friday, the Trump administration provided a 60-day grace period to work visa and green card holders and applicants who were in the middle of having their petitions processed before the pandemic disrupted it.

How Did This Affect?

As per the reports, the H-1B visa holders are most affected during the COVID-19 pandemic and global lockdown. 

On the other hand, Indian IT firms are re-evaluating their cost optimization measures as H-1B holders face a higher risk of deportation.

Further, the US President Donald Trump has signed an executive order to suspend immigration for 60 days. 

So far, the Covid-19 pandemic has led to rising unemployment in the US. 

So this ban will have a great impact on H-1B workers in the US as most of these visa holders are employees of IT companies. 

How IT Industry Is Affected By This Decision?

According to the reports, the contractual H-1B visa holding employees are at higher risk as IT companies are reducing sub-contracting costs in an uncertain economic and political environment, following the recent US government’s executive review on immigration.

Basically, the Indian IT industry relies on sub-contracting skilled tech professionals to US-based companies.

Also, the global lockdown has created a significant impact on businesses. In turn, IT firms are forced to take extreme cost optimization measures.

Currently, most of the Indian IT firms are re-evaluating their expenses. 

Where their goal is to protect their employees, while the same does not hold true for H-1B workers. 

Why Would This Happen?

Around the world, companies prefer to protect the jobs of permanent employees. 

But in the extended effects of Covid-19 led economic slowdown, contractual staff will be the first to get laid off.

“In the US, employment is ‘at will’, for both employers and employees, so those in permanent positions can still lose their jobs. However, contractual, and especially staffing, workers are at significant risk for being subject to termination of employment, especially as various projects are terminated for lack of available budget,” said Scott J FitzGerald, the managing partner of global immigration consultancy, Fragomen.

So far, it is not clear whether immigrant workers with unemployment status are eligible for unemployment benefits. 

In the current situation, if an H-1B worker remains employed, he/she should be eligible to extend status. 

But, if the petition is denied, the worker gets less than 60 days to find a new employer or depart back to the respective country.

For this year, Indian IT firms including TCS and Infosys have reported low subcontracting costs.

Moreover, with the considerable dip in revenue, protecting contacts workers will be the least priority for these companies.