H-1B visa allocation to top 5 IT firms drops 49%

The allocation of H-1B work visas to India’s top five IT companies has declined by a whopping 49% in 2018, after the rules were tightened by the US.

According to a research report by CARE Ratings, the total number of H-1B applications approved to the top five IT majors — TCS, Infosys, HCL, Wipro and Tech Mahindra — stood at a mere 22,429, down from 43,957 in 2017, amid the rhetoric against immigrant workers by the Donald Trump administration.

Of the total approved applicants, 72% held a bachelors degree and the rest masters degree. The median salaries for the top five Indian IT services companies, for the H1-B workers, were in the range of $74,000-$90,000, the report said. The rejection level of H-1B visas to the top five Indian IT firms was at 20.6%, with 5,809 of 28,238 applications put forth being rejected.

Bengaluru-based IT major Infosys was the worst affected when it came to H-1B visas — 26.4% of the company’s 8,052 H-1B applications were rejected by the United States Citizenship and Immigration Services (USCIS). Of all the applications of Indian companies rejected, Infosys constituted a whopping 36.5%.

Infosys and TCS were among the top three companies globally when it came to rejection of visas. US-based tech major Cognizant Technologies saw the highest rejection rate of 36% for visas. The company had applied for 13,532 H-1B visas, of which 4,338 were denied. Deloitte and Capgemini were the other two companies in the top five in terms of rejection of H-1B visas.

The total number of approved H-1B applications by the USCIS has also dropped by 9% to 3,31,098 in 2018, from 3,64,584 in 2017.

With US President Donald Trump signing the ‘Buy American and Hire American’ executive order in April 2017, the focus is on creating higher wages and employment rates for US workers by awarding H-1B visas to the most-skilled or highest-paid beneficiaries.

This drastic drop in H-1B allocations has compelled Indian IT majors to increase local hiring in the US, leading to an escalation in employee costs, impacting their cost structures. The average pay for software developers and programmers in the US is $1,02,470, according to the US Labor Department, which is significantly higher than the wages given to H-1B workers by the tech companies.