Context: Recently, the USA has decided to extend the 60-day ban on immigrant and non-immigrant worker visas till the end of 2020.
Issue

• The popular work visas of US including H-1B and H-2B, and certain categories of H-4, J, and L visas shall remain suspended until December 31.
• The move is to protect domestic workers who had been impacted due to a contraction in the economy in the wake of the Covid-19 pandemic.

Key Points

• H4 visas (H-1B dependents), L visas (intra-company transfers), as well as H-2B (non-agricultural workers) and J visas will be on pause through the year-end.
• H-1B visa is required to work in a specialty occupation. Requires a higher education degree or its equivalent. Includes fashion models of distinguished merit and ability and government-to-government research and development, or co-production projects administered by the Department of Defence.
• L1 visas allow companies to transfer highly skilled workers to US for a period of up to seven years.
• H-2B visas allow food and agricultural workers to seek employment in the US.
• H-1B, H-2B, J and L visa holders, and their spouses or children already present in the US shall not be impacted by the new worker visa ban.
• The order was issued ostensibly to protect American jobs during the ongoing pandemic.
• It has been criticised by the tech industry as well as politicians on both sides of the aisle as damaging to the U.S. economy.

Why did the US suspend non-immigrant worker visas?

• The H-1 visa scheme was started in 1952.
• A large number of graduates willing to work at low costs in the US, a win-win situation for both the employer and the employee.
• US President had repeatedly said that the low-cost workers were hampering the economy and by undercutting the job undercutting jobs of citizens.

Its  impact Indian IT companies

• Indian IT companies are amongst the biggest beneficiaries of the US H-1B visa regime, and have since the 1990s cornered a lion’s share of the total number of visas issued each year.
• Indian IT companies also offer subcontracts to Indian nationals already present in the US with valid H-1B visas.
• As of April 1, 2020, the US Citizenship and Immigration Services (USCIS) had received about 2.5 lakh H-1B work visa applications, according to official data.
• Indians had applied for as many as 1.84 lakh or 67 per cent of the total H-1B work visas for the current financial year ending March 2021.
• Apart from the suspension of these work visas, the executive order signed by Trump has also made sweeping changes to the H-1B work visa norms, which will no longer be decided by the currently prevalent lottery system.
• The new norms will now favour highly-skilled workers who are paid the highest wages by their respective companies.
• This could result in a significant impact on margins and worker wages of Indian IT companies which send thousands of low-cost employees to work on client sites in the US.
• However, as per research agency ICRA, the move will be mildly negative for the Indian IT services sector considering their high dependence on such visas.

Road Ahead

• Immigrants have played a crucial role in making the USA a global leader in cutting edge technology.
• Suspending the visas will only weaken the USA's economy and its health care workforce at a time when there is a need to strengthen the both.
• Politics should not trump smart policy and the ingenuity of migrant workers should be harnessed to revive an economy in dire straits.