Tougher US regulations make Infosys not to apply for H-1B visas for junior-level employees; stock down nearly 2% in early trade

Infosys is not applying for visas for employees with under four years of experience on account of tougher US work visa rules, the report said quoting Infosys executive as saying.

Indian IT firms have long been dependent on the work visa, but a rising tide of protectionism means they are beginning to adjust their business models to reduce their reliance on the visa, cited the news report. Image Source: Reuters

Highlights:

1. The company is not applying for visas for employees with under four years of experience, the report said quoting Infosys executive as saying

2. We are talking to clients about offshoring more work to India, and the work done by junior employees can be brought to the country, cited Infosys executive

3.There are job requirements in the US, but some customers have started asking that fewer H-1B employees be deployed onsite on their projects, another Infosys executive told the newspaper

Homegrown IT firm Infosys is reported to have decided not to apply for H-1B visas for its junior-level employees as the company comes to terms with the prospect of a tougher regulations governing the work visas, The Economic Times reported citing three sources in knowledge of the matter.

The H-1B visas are most sought after work visas by the Indian IT professionals which permits them to work in the United States (US).

"The company is not applying for visas for employees with under four years of experience. We are talking to clients about offshoring more work to India, and the work done by junior employees can be brought to India,” the report said citing one executive at the company, as saying.

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The report citing the second executive confirming the development said the company had not raised visa requests for systems engineers and senior systems engineers, among the lowest rungs in the Infosys corporate ladder.

In the beginning of 2017, US Congressmen have proposed a bill raising the minimum wage on the H-1B visa to over $130,000, more than double of what is mandated at present.

The company is planning to hire more employees to its onshore clients' side.

“There are job requirements in the US, but some customers have started asking that fewer H-1B employees be deployed onsite on their projects. We are trying to hire more onshore to deal with this issue,” a third Infosys executive told the newspaper.

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When the newspaper asked for its comment on the latest development, Infosys, which has entered into the silent period ahead of its fourth-quarter (Q4) earnings results next month, declined to comment for this story.

The company’s inability to apply for visas for junior employees is also creating another problem, the report said.

“One of the easiest ways to retain people when they expressed dissatisfaction was to say that we will begin their visa process. This can no longer be used. Managers are now trying to find different ways to keep people on board,” the report said quoting one of the executives quoted above, as stating.

The executive further said this was a problem that would be faced by the entire industry and not just Infosys.

According to the news report, another IT firm Tata Consultancy Services (TCS) has said that it had operated in a self-imposed visa-constrained environment this year and had applied to get only about 15% of the visas for which it normally applies.

The news visa rules in the US, which have proposed to far higher minimum wages and a tighter visa regime, means that junior employees of homegrown IT firms are unlikely to get coveted opportunity to work on onshore projects.

On Monday, at 10:40 hours, the stock of Infosys was trading down 1.83% or Rs 19.05 at Rs 1,020.95 on the BSE.

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