A United States court ruled on Friday that a group of American-born tech workers have faced heightened job competition from work authorisations given to the spouses of H-1B visa holders. That being said, the judges gave Indian workers living in the US short-term breathing room by leaving the final decision of the ongoing lawsuit up to a lower court.

What are the H-1B and H-4 visas?

The lottery-based H-1B visas allow US companies to employ foreign workers temporarily in specialised occupations for three years, extendable to six years. The issuances are capped at 85,000 a year, but some employers such as universities and research nonprofits are exempt.

Spouses of H-1B workers are granted an H-4 visa, through which some have been allowed to apply to work in the US since a Barack Obama-era 2015 law. Since the law was instituted, a total of 1,20,514 H-4 visas have been granted, of which 1,10,649 have come from India. Out of the 90,946 that were initially approved, 84,935 were for women.

The H-1B visa has long-served as a common passage for Indians into the US. Out of the 4,19,637 H-1B applications in 2018, 74% came from India. Most beneficiaries are aged 25-34, and are in fields involving computers.

Rising trends in H-1B visa for Indians

Source: US Citizenship and Immigration Services

What was the US lawsuit?

The “Save Jobs USA” suit was originally filed in 2015 by two IT workers and one systems analyst against the US Department of Homeland Security. Their affidavits stated that they worked for more than 15 years at Southern California Edison until they were fired and replaced by H-1B visa holders

The suit argued that the H-4 work authorisation violates immigration law and exceeds Homeland Security’s authority.

The plaintiffs lost in the district court in 2016, and appealed in federal court in Washington DC. During the transition between the Obama and Trump administrations, the appeals court held the matter as the new administration was considering eliminating the work authorisation. Homeland Security submitted a memo in September 2019 requesting a hold on oral arguments while they brought out the proposed rule to scrap the H-4 work authorisation. Homeland Security has delayed the move to scrap the H-4 visa spouse rule until spring 2020.

What were the arguments in court?

The court re-visited the matter in December 2018. In the subsequent trials, a lawyer representing the former tech workers argued that US workers were harmed by the “entry of aliens into the job market”.

Homeland Security maintained that the damage done to the plaintiffs was due to the H-1B programme, not the work authorisation given to the spouses. They argued that there was no direct competition between the tech workers and the H-4 visa holders. The judges at the time also expressed concern that the job competition evidence was anecdotal.

In the course of the trial, a brief arguing that the H-4 work authorisation adds to economic growth was submitted by the Information Technology Industry Council, the US Chamber of Commerce, and the National Association of Manufacturers. They contended that the work authorisation has added $5.5 billion-$13 billion to the GDP, and roughly $2.4 billion in tax revenues. According to the brief, H-4 spouse visas have created about 6,800 positions in the US, cancelling out the 5,500 to 8,200 jobs that would’ve been filled by Americans if they weren’t allowed to work.

So, what happened last week?

Friday’s ruling came from a three-judge panel in the Washington DC circuit.The judges disagreed with Homeland Security that the H-4 work authorisation is also not at fault: “We disagree. The rule will cause more H-1B visa holders to remain in the United States than otherwise would — an effect that is distinct from that of the H-1B visa holders’ initial admission to the country”. Although the ruling states that the tech workers do face increased competition from the H-4 work authorisation, the final merits of the lawsuit will be determined by a lower court.

How has H-1B changed over time?

The Trump administration has visibly ramped up H-1B denials, under the executive order “Buy American and Hire American”. H-4 visas have also been issued at a much lower rate, with initial approvals dipping from 31,017 in 2016 to 27,275 in 2017 to 6,800 in 2019.

In August, the Department of Labor released for the first time the names of companies where H-1B visa holders are conducting work, even if they are employed by a third-party staffing or outsourcing firm. The release of data was seen as another move to target occupation visa programmes that the President and his base believe are cutting into job opportunities for American-born citizens.

Indian outsourcing corporates such as Tata, Infosys, and Wipro faced denial rates of 28%-46% from 2015-19. US-based companies such as Ernst & Young, Deloitte, and Cognizant saw 18%-52% rejection rates, but Big Tech companies like Apple, Google and Facebook faced little change in H-1B visa approvals in that time period, according to a report from National Foundation for American Policy.

Still, Big Tech is affected by the increased rejections. Many of them hire contract workers from the outsourcing companies that have been affected, meaning the Big Tech companies will have to pay US market wages instead of reduced foreign worker wages.

The report states that the Trump administration wants “to make it more difficult for well-educated foreign nationals to work in America in science and engineering fields”.

Source: The Indian Express

Relevant for GS Prelims & Mains Paper II; IOBR