US H1B Visa reform likely to turn a profit for Canada’s Tech Industry

Posted on January 31, 2017

The newly elected President, Donald Trump seems to be enthusiastically following his election promise to put “America First” and to put the American jobs for the Americans by constantly targeting US immigration sector with reforms and rule changes. H1B visas, which make a great source for Indian workers to enter the United States and work for technology projects or sectors with scarce workforce are now at a stake for restructuring. Though the tightening and loosening restrictions on H1B visas is not something very new, the reform proposed now is likely to disturb the entire US economy.

A draft bill recently introduced at the US House of Representatives states the minimum wage paid to H1B visa holders should be doubled. Aiming to make the replacement of US employees with foreign workers difficult, the proposed bill states that the minimum salary of H1B Visa holders should be doubled to $130,000.  Nevertheless, the global IT service industries who majorly depend upon free flow of ideas, talent and technology will be greatly affected by this proposed change. Also, this will be a massive threat for India- which is marked as the epicenter of the global IT industry. Statistics show that firms with Indian operations and certain US based companies have over 3000,000 employees residing in the United States on H1 visas. In the past five years, Indian tech companies have created over 400,000 jobs in the United States and have contributed over $20 billion to its taxation.

The implementation of this reform shall bring a force on companies like Wipro, TCS and Infosys to make fundamental changes in their business, i.e. hire more workers from within the United States and raise salaries of employees working on client sites in the United Nations. Plus, if this reform of doubling the wages successfully comes into effect, it would be a hurdle for students who have migrated to the United States for a better career through international education. It will no more be easy for them to get jobs as most employers will not prefer to pay a base salary of $130,000 for freshers.

While all this would be a mess in the economy of the United States, it comes a boon to a country like Canada. Located in the North America, Canada is widely known for its tech-savvy environment and job opportunities it has in its IT sector. As Canada is facing a shortage of IT professionals and has improved its immigration policies just to bring over 200,000 professionals to the country in a year’s time- a rapid shift in the interest of people from the United States to Canada due to this political chaos is sure to benefit Canada.