stammering

Nearly two months after its introduction sparked a furore both in India and in America, the controversial Durbin-Grassley visa reform bill has again been brought before the United States Senate.

Its fate holds major ramifications for Indian individuals and Indian IT companies seeking US work visas, with some claiming that its passage could result in the decimation of the business model for Indian outsourcing firms like Wipro Technologies, Infosys Technologies and Tata Consultancy Services.

According to the Senate’s web site, the bill has officially been logged as:

S. 887 - A bill to amend the Immigration and Nationality Act to reform and reduce fraud and abuse in certain visa programmes for aliens working temporarily in the United States and for other purposes.

It was introduced by US Senators Dick Durbin (Democrat-Illinois) and Charles Grassley (Republican-Iowa), and contains new stipulations that companies must follow to acquire temporary US work visas, commonly known as H-1Bs and L-1s.

The most controversial of these stipulations, the so-called ‘50/50′ provision, would prohibit companies with more than 50 US employees from obtaining any additional work visas if more than 50% of their entire US workforce is made up of H-1B or L-1 visa holders. The provision would essentially prevent companies like Wipro and Infosys from hiring more Indian workers to work in the US.

Citing rising unemployment, Grassley claims the provision would help protect American jobs. “The original rationale [for the visa programme] was that we needed to allow importation of managers and technical people when there weren’t enough Americans available. It seems to me ridiculous that companies now have more than half of their workers on [these visas] when there are certainly a lot of workers in the U.S. who can fill in some of those positions,” he’s reportedly said.

Opponents, on the other hand, call the bill a piece of socialist legislature and a sign of growing US protectionism. Top executives at firms like TATA and Infosys say the argument over the legislation could eventually deteriorate into a trade dispute between India and the US.

Suggesting that layoffs in the information technology and business process outsourcing industry are still less than 1 per cent of the total workforce, top National Association of Software and Service Companies executives have said that the industry has not yet come in the grip of large-scale layoffs.

“We have seen the slowdown affecting the primary markets and impacting consumer spending. But this has not necessarily translated into massive layoffs of IT industry personnel. At least, I am not aware of any,” Nasscom Chairman and Genpact President and CEO, Pramod Bhasin, said on the sidelines of the Nasscom BPO Strategy Summit held in Bangalore on Tuesday.

Stressing that no member-company of Nasscom has resorted to laying off employees in large numbers, Bhasin said a key fallout of the ongoing economic slowdown is that companies are less tolerant of non-performance from their employees than they were earlier.

“This is the difference we are seeing today and it has not manifested in huge layoffs. In fact, the current layoffs would represent less than 1 per cent of the total industry, maybe, 0.5 per cent. Besides, any vacancies presently arising at companies are not being filled up, as hiring plans have been affected by lower growth rates,” Bhasin said.

Nasscom President Som Mittal said, while there have been reports of small-scale layoffs running into the hundreds, the bigger issue is that no company is hiring in large numbers.

“The real issue is one of students passing out from colleges and finding themselves without adequate employment options. This is forcing them to pick up additional skills. Many more students than in the past are enrolling for MTech courses to increase their employment potential,” Mittal said.

Bhasin felt investments in new markets, research and development activity and expanding domain skills would increase in the face of the slowdown. “Once growth picks up, the industry will move more and more into the smaller towns, which will increase employment,” Bhasin said.

Mittal said there is a clear willingness on the part of everybody concerned — government, industry, employees and other stakeholders — to work together to overcome the situation.