Indian IT Firms May Now Have to Shell Out a Lot More for H-1B and L-1 Visas

Indian firms wanting to obtain an H-1B or L1 visa for deploying their employees in the U.S. will now have to pay a lot more as the U.S. looks to fund an ambitious 9/11 healthcare act and biometric tracking system with the money generated.

H1-B and L-1 visas are much sought after by Indian IT firms, prompting the Indian government to persuade U.S. authorities to reassess the decision to bring back the James Zadroga Act. The act, which required Indian firms to pay more for their employees working in the U.S., had lapsed in September 2015, much to the relief of several Indian companies.

Congressional leaders have pushed for the bill to be implemented permanently, a move that’s expected to call for spends approximating US$1.1 trillion. An appreciable portion of these costs is to be recovered via a special fee of US$4,000 on H-1B visa categories. L1 visas, on the other hand, will attract a fee of US$4,500. A much clearer picture will emerge once the U.S. House of Representatives casts a vote Thursday to decide the fate of the bill.

Important things IT firms need to know about the H-1B and L-1 visa fee:

• The US$4,000 fee would only apply to firms that have at least 50 employees and also have 50% of their employees on either an L-1 or H1-B visa. This is expected to mainly bring large IT companies under the purview of the bill.
• Firms that fall into this bracket looking to obtain an H-1B visa for the employees will have to pay a revised fee of US$4,000. L-1 visas will attract an even higher fee of US$4,500.
• Although the bill makes no specific mention of Indian IT companies, who apply for these two visa categories in massive numbers every year, experts say that the wordings suggest Indian IT firms will have to brace for impact.
• What could come as a small consolation is the fact that lawmakers responsible for the bill are describing it has a “temporary provision” spanning 10 years.

The fee hike is expected to generate at least US$1 billion per year, and will be channeled into funding a state-of-the-art biometric entry and exit tracking system. The earnings from the new fee will also provide for healthcare programs for 9/11 first responders.

Although the U.S. Treasury stands to benefit substantially from the fee hike, what remains to be seen is whether or not the move affects Indo-U.S. political relationships, which are at an all-time high.