Restrictions on L-1 Visas Could Increase Outsourcing

Donald Trump’s Government is becoming very strict about the work visas that allow foreign workers to get employment in the US-based companies. But what he is forgetting is that the H-1B visas and L-1 visas have not only helped the foreign workers but also the employees of the United States.

It was not very long ago that after noticeable abates in H1-B visas, a lot of people started opting for L1-B visas. But even that didn’t seem to go well with the present Government. The strict rules and restrictions have not only been imposed on H-1B visas, but also on the L-1 visas, which is definitely going to affect outsourcing. Due to the restrictions imposed, the attention has been diverted to outsourcing and many other methods, such as investment visas.

Outsourcing refers to shifting some part of the business overseas. When due to the harsh laws, the employers cannot bring in the foreign professionals or find it difficult to do so, other means of getting their work done is by expanding its brand or shifting some of its areas to countries where they can find the required professional personnel. This is what is going to be the case in the United States if the restrictions on the H-1B and L-1 visas do not get a little lenient, which in turn will have a detrimental effect on the US economy.

Stuart Anderson, contributor to Forbes said that the companies would not stick in the United States after so much strictness and would rather choose to outsource. Economist and an author from the George Mason University, Tyler Cowen said that imposing such restrictions will cause the companies to opt for outsourcing which means that the employment opportunities in the United States will drop and the employment opportunities in the foreign lands will increase. He also added that outsourcing will not only affect the economy badly but it will also be disastrous for the reputation of the country all around the world.  Anderson argues that the demand for skills among the US and foreign-born workers is on the rise and it makes sense to allow more IT work to be performed in the US.

Another trend that will gain popularity is the investment visa. EB-5 visas which are commonly known as investor visas have already come in the spotlight now. A person or a family looking forward to the investment visa need to invest one-million dollars in US commercial projects or half a million dollars in projects to increase employment opportunities in rural areas where the employment rates are low.

There are numerous benefits of opting for EB-5 visas, especially for the students studying in the United States. The families who can afford the investment opt for it as it allows their children to work freely in the companies of the United States without the need for H-1B visas. CanAm Investor Services’ chief compliance officer and CEO said that many families from India have been enquiring about the EB-5 visas after the restrictions were imposed on H-1B visas. He also added that by opting for the investment visa, the families cut down up to 10 years from the process of gaining a green card and moreover, it allows the children of such families to work without any hurdles, such as H-1B visas and L-1 visas.

Increasing L-1 Visa Applications After Decline In H1-B Visas

H1-B Visa and L-1 Visa are both non-immigrant visas. However, there is a difference between both. H1-B visa was stated out in 1990 for skilled individuals to join companies in the USA. It allows employers to get foreign workforce on board.

Before this year, an average of 85,000 H1-B visas was approved annually. In 2017, against the increasing demand, H1-B visa cap was reached just four days after the application window opened. However, H1-B is not the only employment-based visa in the USA. L-1 Visa is the visa for temporary non-immigrants through which companies can transfer their employees from another country to the USA. After a noticeable abate in H1-B visas, a lot of people are opting for L1-B visas. However, for an L-1 visa, it is compulsory for employees to be part of another subsidiary of the same company, its affiliate or parent company. There is no annual cap on these visas and the acceptability of visas depends on the applications.

After a limitation on H1-B visas, a lot of employers are opting to have their employees from other subsidiaries of their companies. However, there are a few points regarding L-1 in the new reform bill that must be kept in mind:

The bill prohibits employers from replacing a US national employee with an L-1 worker. It allows employers to have a foreign employee onboard for a job opening. Unlike H1-B, there is no restriction for employers to prove that no other individual in the USA can take up this job.

Employer Petitions:

The reform bill also discusses the requirements that an employer needs to fulfill in order to have an L-1 worker on board in the US subsidiary. These include petitions for employment at a new office, wage rates, and employer penalties.

The shift of demand from H1-B to L-1 visa:

According to Abhinav Lohia, Partner and Practice Chair of India and Southeast Asia at Davies & Associates, “Indian companies will now have to scout for American talent or opt for alternatives like L1B or L1A visas to send workers to the US.”

Through L-1 visas companies can transfer employees temporarily for a managerial or executive role in any specialized domain. A lot of companies in the USA have already partnered with some local companies in India in order to shift employees through L-1. Another option for people with the rejected H1-B application is EB5 visa if you can afford that. Both L-1 and EB5 visas have higher chances of converting into a permanent visa and then citizenship over H1-B. For multi-national companies employing someone from L-1 visa is far easier than H1-B now. L-1 visas put an end to the dependence of the employer for staying in the United States.

However, just like H1-B visas, Trump government has increased the fees for L-1 visas as well. It is affecting the Indian IT firms in the USA the most. The fees for both H1-B and L-1 visas have already doubled. Most of the experts believe that the government will increase the fees more which will make it even more difficult for employers to have L-1 workers on board.