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Why US visa rules can see a flight of talent from India

Posted on October 30, 2014
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Allowing the spouse of a H1-B visa-holder to work will open the floodgates

It is not uncommon to hear about employees jumping ship for the flimsiest of reasons – because jobs for qualified individuals are always to be had.

Changes in US immigration law shouldn’t ordinarily affect Indian companies but if new US rules take effect as proposed, competition for talent is now expected to come from companies in the US.

I learned of a young Indian couple that had earned dual (BE/M.Tech) degrees from IIT Bombay nearly five years ago.  They had considered pursuing PhD degrees at elite US institutions but dropped the idea fearing that the path would be too limiting. They wanted to stay in India and grow. He works for Goldman Sachs and she for Microsoft in Bangalore.

The investment bank had made several offers to him to relocate to their New York offices to work in their M&A division on an H-1B visa with a promise to sponsor him for a green card.

But he had spurned the chance because that would have forced his wife to get an H-1B visa of her own, which is not easy.

And she did not want to give up her exciting career to support his.

Work-life conflict

Couples considering moving to the US have lived through this work-life conflict for as long as the H-1B programme been in existence. US law allows employers to bring in qualified individuals from abroad on temporary work visas, called H-1Bs.  But it fully ignores the H-1B spouse and grants no privileges at all – other than the right to live with the H-1B employee as a dependent.

No longer.

The Obama administration has quietly made public its intention to use “Executive Authority” to issue new rules for H-1B spouses.

  As the Hill newspaper reported in May, “One of the rules would allow dependent spouses to request employment authorisation as long as the H-1B visa holder to whom they are married has started the process of becoming a permanent US resident.”

This is huge.

By proposing to grant every H-1B spouse the automatic ability to work, the administration will virtually double the number of H-1B visas at a time when H-1B visas are exceedingly scarce.

The new rules can have a profound impact on employees, families and employers that have operations both in India and the US.

Spelling trouble

Even pure-bred Indian companies with limited US presence will find this proposed rule particularly troublesome.

Until now, Indian managers could rest knowing that the prospect that their star resource would bolt to the US was relatively slim because the resource wouldn’t be able to secure work privileges there even if the resource’s spouse had an H-1B visa.

The resource would have to quit a promising career in India altogether or be forced to change career plans (such as study in the US or even stay home) – hard choices to make for anyone.

In the US, critics are furious at the Obama administration for asserting Executive Authority on a matter that is currently before the US House of Representatives (This body is under Republican Party control whereas the US Senate and the White House are led by Democrats.)

US Senator Jeff Sessions (R-AL) issued a statement saying that the 100,000 new guest workers will further flood a slack labour market and pull down wages.

“It is good news for citizens in other countries who will be hired. But for struggling Americans, it will only reduce wages, lower job opportunities, and make it harder to scrape by. Who does the Administration represent?”

With the rule change, the Goldman Sachs employee stuck in Bangalore is now free to go to the US because his smart wife can easily find employment in the New York tech industry.

Republican winds

Note that the spouse doesn’t even have to be in a STEM (science, tech, engineering, maths) field.

The only requirement is that the main H-1B visa winner should be in one.

The proposed rules are yet to be officially signed by Obama.  And with all polls predicting that the US House will stay in Republican control after the US mid-term elections and some saying that even the US Senate might switch to a Republican majority, Obama will face strong headwinds to fulfill his promise of acting unilaterally.

But were the rule change to go through, Microsoft can expect a resignation letter shortly from that smart Bangalore lady and must be prepared to lose out on a stellar resource.

Unless it gets proactive and offers the couple great careers in Redmond – opportunities that even Goldman Sachs can’t match in New York.

This is what talent management has become in today’s global economy.

(The writer is Managing Director of Rao Advisors LLC, an education management consulting firm.  He has written a book on the new H-1B/STEM proposals)

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