How New H-1B Visa Rules Could Harm the U.S. Economy

How New H-1B Visa Rules Could Harm the U.S. Economy

Posted by: Park Evaluations

By: Rebecca Anderson

Last week, the Department of Homeland Security and the Department of Labor announced new rules for the H-1B visa system, changing the definition of “specialty occupation,” employee-employer relationships, and limiting the validity of an H-1B visa to one year for a worker placed at a third-party worksite.

Overall, the new interim final rule will include fewer types of degrees, raise wages H-1B workers should be paid, and shorten the length of visas for contract workers.

According to The Economic Times, the IT industry lobby group Nasscom said that the changes could potentially harm the U.S. economy by restricting access to talented workers from overseas and slowing down research and development processes due to the COVID-19 pandemic—a time when we need it most.

“These regulations seem to be based on misinformation about the programme and runs counter-productive to their very objective of saving the American economy and jobs,” a spokesperson from Nasscom said. “This is particularly relevant at a time when US businesses continue to face a huge deficit of STEM skills: overall U.S. unemployment rate grew from 4.1% in Jan-2020 to 8.4% in August-2020; while unemployment in computer occupations declined from 3% to 2.5% in this period.”

According to Quartz India, these new reforms could be a major blow to Indian technology companies, who get a bulk of H-1B visas doled out each year. It could also affect emerging niche fields such as artificial intelligence and bioinformatics. Not many U.S. universities offer these technologies and often professionals from loosely related fields will fill those positions.

Until now, foreigners with a bachelor’s degree were eligible for specialty occupations. However, now, they must be specialists in their exact field. For example, an electrical engineer can’t fill a software engineer position.

The DHS argues the new regulations will help put the American worker first.

“We have entered an era in which economic security is an integral part of homeland security,” U.S. Department of Homeland Security Acting Secretary Chad Wolf said. “Put simply, economic security is homeland security. In response, we must do everything we can within the bounds of the law to make sure the American worker is put first.”

Many immigration advocates are concerned there will be a talent gap when it comes to high tech jobs and that the new rules will worsen this gap by making it more difficult for U.S. companies to hire foreign workers.

This IFR went into effect on Oct. 8, and coincides with an overhaul of the four-tier wage level system for H1B visas.