April 1, 2017 10:00 am JST

US tech sector braces for visa upheaval

Mooted changes to H-1B work permits would make hiring foreign talent even harder

JOSHUA OGAWA, Nikkei staff writer

SILICON VALLEY -- Since Donald Trump was elected president, Indian IT professionals living in the U.S. have been getting nervous. Abhijit, who lives in California with his wife and 4-month-old daughter, is one of them.

Abhijit has been waiting over a year for an H-1B visa, a type of visa that allows highly skilled foreign nationals to work in America. But the new administration, railing against U.S. jobs being "stolen," has repeatedly attacked the H-1B visa program and promised to revamp it in such a way that companies prioritize Americans in hiring.

Abhijit is currently on a shorter-term L-1 visa, which allows companies to transfer certain types of employees from their overseas offices to a U.S. one, and he cannot leave the U.S. while his H-1B application is pending. He said he feels a bit less stressed after receiving government assurance that no changes to the visa regime will be introduced for at least a year, but he is still wary.

Not so fast

Recent developments have given Abhijit and those in his position even more to worry about. In early March, the U.S. Citizenship and Immigration Services of the Department of Homeland Security announced that starting in April, it will suspend premium processing for all H-1B petitions for up to six months. Petitions are screened only to judge whether a person is qualified for an H-1B visa before he or she actually files an application and does not guarantee the issuance of a visa. Normally, this screening takes several months, but if employers request premium processing and pay an additional fee of $1,225 per petition, approval or denial notices are issued within about two weeks.

Companies are keen to take advantage of this fast-track option, as there are hundreds of thousands of applicants for H-1B visas -- including foreign nationals holding a master's or higher degree from U.S. universities -- and annual issuance is capped at 85,000. A majority of these visas are granted to Asian applicants, with around 70% going to Indian professionals, including engineers, software programmers and scientists.

With most major U.S. tech companies using the premium processing system, concerns are already spreading of possible delays in hiring talented foreign workers.

"There is not much we can do right now, other than wait and see and hope that we don't do anything that will essentially turn off the spigot on talent that has driven so much of [the] innovations in Silicon Valley," said Rami Rahim, a Lebanon-born engineer and CEO of Juniper Networks.

The telecom equipment company, headquartered in Sunnyvale, California, was founded in 1996 by Indian-American entrepreneur Pradeep Sindhu and offers network devices, such as routers and switches, and related software to telecom companies, data center operators and other clients.

More than a few of Juniper's nearly 10,000 employees are H-1B visa holders, although the company does not disclose the exact number. Securing competent staff in a timely manner is crucial for the company to compete against larger peers like Cisco Systems of the U.S. and Huawei Technologies of China. Rahim, himself an immigrant, and other Juniper executives are keeping an increasingly close eye on the Trump administration's moves.

Unwelcome prelude

Juniper is far from alone in relying on H-1B visas -- everyone from big names like Google, Microsoft and IBM to startups scramble to apply for them. According to one estimate, the U.S. IT industry needs 500,000 more workers, notably in software-related areas, well above the annual cap on H-1B issuances.

"This temporary suspension will help us to reduce overall H-1B processing times," the USCIS said in explaining the rationale behind its recent announcement. "By temporarily suspending premium processing, we will be able to process long-pending petitions, which we have currently been unable to process due to the high volume of incoming petitions and the significant surge in premium processing requests over the past few years."

But even a temporary suspension will impact the country's IT sector. For many businesses, it will mean more time needed to employ skilled foreign workers, plus uncertainty over the employment of such workers. Current H-1B visa holders may also face greater restrictions on extending their visas or switching companies.

"The action (of suspending premium processing) sends a message that this administration is not on the side of tech companies who rely on immigrants. This could ultimately have a chilling effect on innovation in this sector," said Ashkan Emami, an attorney at Path Law Group in Los Angeles.

Moreover, many IT companies see the USCIS's action as a prelude to more drastic revisions to the H-1B program, including possibly a lower annual limit on issuances.

The Trump administration has not provided any specifics for such an overhaul, or a likely timeline for the changes, but that is little comfort to companies worried about their future staffing needs. Many are already working to foster domestic tech talent, but doing so takes time. There seems to be little they can do for now but -- as Juniper's Rahim said -- wait and see and hope.

Nikkei staff writer Rosemary Marandi in Mumbai contributed to this article.

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