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For all DBians worried about Tump Immigration


princeofheaven

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Conclusion

Assessment of various economic factors including the lifecycle yield curve assessment of the tech industry combined with the motive to govern of the new president-elect provides a better indication of how the new policies will pan out soon. Personnel create processes and systems and looking at the recent appointment of immigration hardliner Senator Jeff Sessions as the Attorney General; it is likely that the legal immigration will go through a significant modification. In our view, the following changes will occur in the short term, medium term and long term. If you are affected by any of these potential policy changes, you may want to calibrate your choices rather than be caught unaware carefully.

  • The OPT extension is likely to be canceled without much warning as soon as Donald Trump takes over the presidency. However the one year OPT post-completion of a degree is likely to remain in force. Cancelling the OPT altogether will be detrimental for the American colleges as students will choose to go to other countries instead of United States. There is a real possibility that OPT extension may be replaced with an alternate visa over the long term to allow STEM students to remain and work in the United States. American education is still coveted across the globe and if the Trump administration decides to completely remove the one year OPT, the number of students to well-known universities are not likely to reduce in numbers. The numbers for lesser known colleges will significantly drop as the motivation for seeking admission in these colleges is more to do with seeking long-term residency status, rather than getting an advanced degree.

 

  • H1B visa in all likelihood be denied for Staffing Companies and sub-contracting of H1B workers to other companies for permanent onsite work will be rolled back. Sub-contracting of H1B workers for temporary project assignments (3-6 months) will likely be permitted.

 

  •  Enforcement of H1B visas and scrutiny of L1 Visas will significantly increase, and one can expect to hear about increasing investigations into abuse of H1B visa retrospectively. One can also expect more scrutiny during the application process.

 

  • H1B visa caps overflows into L1 visas and both L1 and H1B visa limits overflow into misuse of B1 Visa both by established companies, staffing companies and by Incorporated Employees. While the GAO report does not direct address the misuse of B1 Visas and fails to highlight L1 visa abuse in great detail, the congressional committee entrusted with immigration reform will most definitely address the abuse of B1 Visa as well.

 

  • Wage Levels of H1 B Levels from I to IV will most likely be increased by atleast 30% to bring the wages at par with local wages. Any rise in the wage levels with increased scrutiny (which translates into more legal costs) will discourage employers from importing workers from outside the country. The businesses will shift to hiring from the pool of recently graduated STEM students and will have to pay higher wages for them.

 

  • The H1B currently accepts most students from India followed by China. There may be a quota system introduced where some approved H1B’s from Indian and China will be reduced, and other countries increased. If Tech workers are entering the United States on a guest worker visa from Europe, they will likely command higher salaries and may act as an alternative highly skilled worker pool.

 

  • Tightening of immigration for visitors, refugees and family reunification immigrants into the United States (to prevent unwanted elements from entering the country) will have a carry over effect into visa processing for guest workers . Increased wait times, more administrative checks (secondary multi-agency checks) will bottleneck inflow of foreigners to the country. The tightened procedures will be under the guise of improved national security and it is unlikely that any lobbying pressure will work to change the “Follow the Book” practices. At the second line of defence level, the CBP officers will get more powers and number of refused entries are likely to increase in numbers.

 

  • E-Verify system is likely to be rolled out through a bill in the congress making it mandatory for all employers. Mandatory compliance will cause processing delays for legal immigrant workers again forcing the employers to either outsource work or hire American Workers. E-Verify is an Internet-based system that compares information from an employee’s Form I-9, Employment Eligibility Verification, to data from U.S. Department of Homeland Security (DHS) and Social Security Administration (SSA) records to confirm employment eligibility.

 

  • In the current framework, H1B workers can apply for a Green Card after spending 6 years in the United States. They can also stay indefinitely in United States on H1B with yearly extensions till a decision is made on the Green Card. Currently, it takes around 7-10 years from the date of application for an H1B worker to get green card. If green card related extensions are removed, workers will have to go back as employers may not be willing to renew H1B visas at the new wage rates. The H1B program was initially conceptualized as a guest worker program but paths to permanent residence and citizenship have been created in the recent years. It is very likely that the administration will roll back the provisions that allows for an easy path to permanent residence or citizenship unless the employer keeps on renewing the H1B visa on its accord.

 

  • United States Citizenship and Immigration Services (USCIS) processes around 200 K work related visas every year and visa filing fees can be anywhere from 2000 to 4000 USD per application The H1B workers also contribute to Social Security. Reduces taxes for corporations and curtailing of guest worker program entirely will lead to a massive deficit for USCIS and the government. This is the reason why the legislation team will seek a middle path.

 

  • How will Trump force companies to hire within the United States and not outsource the work to foreign countries? There is a precedence of “Inverted Domestic Corporation” within the legal framework where there is a complete prohibition of awarding any government work to Inverted Corporations. As soon as a tech company inverts itself, a ban will come into force. Secondly, the “Buy American Act” mandates that all Federal Entities must buy above the micro-purchase threshold value (3000 USD) should buy products only from American companies. Based on these two precedent laws and combined with taxation disadvantage of outsourcing more than a threshold level of consulting work, Trump administration would most likely come up with a new legislation framework. Companies complying with the framework could get significant relief from the government.
  • It is unlikely that H1B program will be rolled back in its entirety and it is more probable that it will be reformed over time allowing for more Level III and Level IV workers to be hired. In the short term, increased fraud detection, compliance checks and rollback of executive orders will send a shrill through the tech industry. Increased scrutiny of initial applications, higher costs and fees of applying and enforcement of applied and approved application will create a higher compliance burden on employers. Compliance failure under the United States litigation system can translate to millions of dollars in fines. Many employers will rather choose to hire American workers or foreign workers already in the country on legitimate visas.
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