Now, a draft of a new Trump executive order related to the issuance of H-1B visas, viewed by Axios, reportedly directs the Secretary of Homeland Security to consider ways to “make the process of H-1B allocation more efficient and ensure the beneficiaries of the program are the best and the brightest.”
While that directive could be accomplished in a variety of ways, one likely solution would be to replace the current lottery system with one that prioritizes visas for those earning the highest salaries. And while such a solution will have wide-ranging impacts on various companies and industries seeking foreign workers, one key takeaway is that it will pit India’s large IT-staffing firms against Silicon Valley’s tech giants.
Per the graphic below, large Indian consulting firms are by far the largest users of the H-1B visa program. That said, most of the jobs created by those companies tend to have lower salaries than those created by the likes of Microsoft, Google and Facebook.
Tech industry insiders expect Trump will direct DHS, which runs the H-1B visa lottery system, to start a rule-making to re-prioritize the visa allocation to give preference to higher-paying firms. This pits tech firms against the Indian IT-staffing firms.
In theory, prioritizing by salaries means visas for more senior, higher-paying jobs will be granted first, and visas for lower-paying jobs (such as those being filled by Indian IT services firms) would fall to the back of line, perhaps not getting allocated at all if demand for the high-wage job visas is strong.
California House members Darrell Issa, a Republican, and Zoe Lofgren, a Democrat, are pushing bills that would raise salary requirements for H-1B visa holders. Tech companies generally support those efforts to de-prioritize Indian outsourcers that they claim “clog up” the oversubscribed lottery system with bulk applications.
Of course, given their dependence on low-paid foreign workers to fill low-skilled IT positions, Indian IT firms would be expected to get hit hard by a new policy prioritizing H-1B visas for higher paying jobs…an expectation that has already taken its toll on the stocks of Infosys and Wipro.