Will There Be an 'Obama Effect' on Visa Legislation?

Offshore outsourcing providers largely downplayed remarks made by President-elect Barack Obama earlier this year that were seen as unfriendly to offshoring. Yet at least one Indian provider, Wipro Ltd., warned in a recent Securities and Exchange Commission filing of its concern that legislation introduced after Obama takes office might make it more difficult to obtain visas.

A Computerworld story quotes immigration attorney Robert Melzer, who says that offshore companies may be concerned over the potential for increased scrutiny of L-1 visas, which currently lack some of the restrictions imposed on H-1B visas, such as an annual cap and a requirement that visa holders receive a prevailing wage for their work. Among the largest recipients of these visas: India's Tata Consultancy Services, Cognizant Technologies, Satyam, Wipro Technologies, Hindustan Computers and Patni Computer Systems.

Some Indian outsourcing providers are quite reliant on the visas, the story points out. In its SEC filing, India's Infosys Technologies said that nearly 7,000 of its employees held H-1B visas at the end of September, while another 1,500 workers were L-1 visa holders. In this report as well as in earlier ones, Infosys said it would be "particularly vulnerable" to changes in U.S. visa laws.

Obama has made remarks signaling his support for an increase of the H-1B visa cap, though he's said such an increase would only be a "stopgap measure" until Congress is ready to tackle more comprehensive immigration reform. His nominee for secretary of the Department of Homeland Security, Arizona Gov. Janet Napolitano, is a strong proponent of boosting the annual cap.

As a different Computerworld article points out, Napolitano will face both friends and foes of an H-1B increase at an upcoming Senate confirmation hearing. Sen. Joseph Lieberman (I-Conn.) earlier this year co-sponsored the Global Competitiveness Act of 2008, which would have allowed the U.S. to "recapture" 150,000 unused H-1B visas from prior years and redistribute them. From a Lieberman statement:

We must address the H-1B visa crisis to ensure that America remains the world leader in innovation.

However, the ranking Republican on the Senate Committee on Homeland Security and Governmental Affairs, Susan Collins of Maine, warned of fraud in the H-1B program when she introduced the H-1B Visa Fraud Prevention Act in 2007. That legislation would have given the the U.S. Department of Labor more freedom to investigate H-1B fraud claims and imposed limits on the ability of employers to transfer the visas to other companies. A U.S. Citizenship & Immigration Services report issued in October found that 13 percent of H-1B applications filed on behalf of employers are fraudulent and another 8 percent contain some kind of technical violations.

Being laid off from an IT job may lead some H-1B visa holders to return to their countries of origin, an option taken by several folks referenced in this Indian Express story. Referring to a former Jupiter Automation employee who was laid off along with 100 coworkers, the story says he returned to India despite having just applied for a green card because he would have been forced to leave the U.S. within a month unless he obtained another job with his H-1B status.