Things are about to get pricey for Indian outsourcing firms doing business in the United States.
That’s because President Obama on Friday signed into law a border security bill largely financed by targeted but steep increases in the application fees for visas extended to guest workers.
The bill, shepherded through the Senate by Chuck Schumer (D-N.Y.), jacks up application fees for large foreign companies that rely heavily on non-American workers for their U.S. operations. The increases apply only to companies with 50 or more employees in the United States, with at least half of the workforce holding either an H-1B or L visa.
Specifically, the bill hikes the application fees for H-1B visas, which are set aside for temporary work permits for skilled workers — and which have long been a hot-button issue for the tech industry, — increasing the fees from $320 to $2,320. L visas, which are issued to non-citizen workers transferring from a foreign country to the United States, increase from $320 to $2,570.
Schumer and other supporters of the bill noted that the rate hikes won’t affect most companies in the tech sector — small startups with fewer than 50 workers would be exempted, as would large tech firms that routinely advocate for expanding the annual H-1B quota.
Instead, it would target outsourcing firms that fill out their U.S. operations with workers on guest visas, many from India. Schumer singled out four: Wipro, Tata, Infosys and Satyam.
The National Association of Software and Service Companies, a group that represents Indian outsourcing firms, blasted the legislation in a statement.
“This bill is indirect protectionism and contrary to the Obama administration’s repeated pleas to the international community to avoid taking such actions,” the group said. “The adoption of these provisions by the U.S. hinder the free movement of people essential for promotion of free trade.”
Schumer argued that the rate increase is meant to close a loophole that has allowed a small set of companies “exploit” the visa program, to the detriment of U.S. business. He also said that he hopes the border security bill would be a prelude to a broader effort at immigration reform, which would also revisit the H-1B policy.
“No doubt, we need to comprehensively reform our broken immigration system, and this plan is a first step in that process,” Schumer said in a statement.
The bill directs $600 million to strengthening the security of the U.S.-Mexico border by increasing the number of border agents, as well as new equipment, unmanned aerial drones and bases, as well as additional funding for departments and agencies involved with law enforcement in the region.
“The legislation adds permanent resources that will continue to bolster security along the Southwest border, supporting our efforts to crack down on transnational criminal organizations, and reduce the trafficking of people, drugs, currency and weapons,” Homeland Security Secretary Janet Napolitano told reporters on Friday.