The Small Business Administration, which supports entrepreneurs and small businesses in America, has written to the Department of Labor to delay the implementation of the previously-announced wage hike rule for H-1B visas by 30 days, which could affect many Indian-origin workers.
Moneycontrol reports that the 30-day time period, according to the agency, will help organizations share comments on the adverse impact it would have on them and develop “less burdensome regulatory alternatives,” the letter, dated Nov. 9, said.
This comes in the wake of the DOL’s implementation of H-1B wage hikes effective Oct. 8. The rule increased the salaries for H-1B workers substantially, in some cases as much as 50 percent, according to the report.
Immigration attorneys pointed out to Moneycontrol that this would have a huge impact on the tech workforce and more so on smaller companies who will not be able to afford to hire such talents with the surge in fees.
This is important given that Indians are by far the largest beneficiaries of the H-1B visa. Of the over 500,000 H-1B workers in the U.S., Indians would account for a significant share and are employed across large and small firms and also startups, the report said.
Many of Indian students pursuing higher education in the U.S. aspire to work in the Silicon Valley startup ecosystem. Such hikes will be a setback to those aspirations as not many startups will have deep pockets to hire expensive talent competing with tech majors.
According to the letter, small businesses will lose out on talented workers, harming innovation and business growth at a time when they are struggling to grow in the wake of COVID-19, it said.
The letter submitted to the DOL by SBA also pointed out key concerns regarding the rule.
The DOL has not given enough justification for immediate implementation of the wage hike since its argument of protecting American jobs does not have enough basis, said the report.
“Small businesses would be shut out of the H-1B visa program for new workers, making it difficult to innovate and grow their operations,” the letter said. “Small businesses are concerned because there is a shortage of U.S. workers in STEM (science, technology, engineering and mathematics) fields… companies may lose new projects and business to offshore companies who have more access to qualified labor,” the agency further added.
There were three lawsuits filed challenging the wage hike and the Department of Homeland Security’s strengthening H-1B regulations, the report notes.