Fears arise that Trump has dropped ball on H-1B reform

Patrick Thibodeau

The analysts say political uncertainty is prompting IT services firms to hire more U.S. nationals to reduce reliance on visa workers.

The political climate is "telling the providers that they need to step up their focus on building out capabilities and resources in the U.S.," said Rutchik.

The U.S. distributes the H-1B visas by lottery shortly after April 1 -- if it receives more petitions than the cap. Last year more than 230,000 petitions were received. Critics had been hoping that that Trump might change the visa distribution from a pure lottery to a system that gives preference, for instance, to non-dependent H-1B firms, those with less than 15% of their workers on a visa.

That change would have put India-based firms in the back of the H-1B distribution line, but IT services such firms as Accenture and IBM, which are not H-1B dependent, would have been unaffected.

Trump may still take action on H-1B visas apart from the lottery, says Bendor-Samuel. As an example, he points to the administration's recent action to suspend fast-track premium processing for six months.

"Providers are not home free this year and face increased resistance to their model regardless of the delay in the actual law changes," said Bendor-Samuel. "The net effect is that they will be able to utilize H-1B, but at a greater expense and to a lesser degree."

But the IEEE-USA believes that IT outsourcers get as many as 50,000 of the 85,000 H-1B visas. "Rather than using H-1B workers themselves, outsourcing companies rent their workers to third-parties at below-market rates. American workers, after training many of these new employees, will lose their jobs," said Pedersen.

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