U.S. visa fee hike – reasons and concerns.

The United States recently made an abrupt hike in the visa fees for the H1B and L1 visas. H1b and L1 visas are issued by the U.S. to the non-American knowledge workers, as a permission to work in the U..S. for a specified period of time. Now let’s get back to the question,

Why was the fee hiked?

According to the Consolidated Appropriations Act 2016, the visa fee on H-1B and L1 visa have been hiked to $4,000 (Rs 2.68 lakh) and $4,500 (Rs 3 lakh) respectively in order to shore up revenues for the 9/11 Response and Biometric Exit Fund. This will be applicable to companies that employ more than 50 people in the US and 50% of the employees are foreign nationals.

Arun Jaitley raised concerns about the hike, saying “India’s concern over the hike in the H-1B and L1 visa fee, which is discriminatory and in effect is largely targeted at Indian IT companies”.

Why are Indian IT companies concerned?

Because they are the biggest users of the H-1B and L1 visas (see table) and have to foot the fee bill. India’s three biggest IT companies Infosys, TCS and Wipro roughly employ around 15,000 people each in the US. These companies rely heavily on H-1B visa workers as the salary demanded is less. Last year the US government started investigations against Infosys and TCS after US workers were allegedly laid off to be replaced by H-1B workers. Wipro has also faced wage-related lawsuits.

What now?

Even though the U.S. claims to have seen no drop in the visa visa request and visas issued. India has taken up the matter with high officials to ask the U.S. to come up with a not-discriminatory solution to the problem.