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Indian IT stocks face worst crash as US proposes new H-1B visa rules
United States President Donald Trump is on his way. After becoming the 45th president of the United States his "America first" policy is coming in shape.
A legislation was introduced in the US House of Representatives which calls for doubling the minimum salary of H-1B visa holders to $130,000.
In a brutal one hour, the top four - TCS, Infosys, Wipro and HCL Technologies - saw nearly Rs. 48,000 crore wiped out from their market value. The new US bill is designed to make it difficult for companies to use the work-visa programme to replace American employees with foreign workers, including those from India.
Shares of mid-sized IT companies also came under heavy selling pressure - Take Solutions, Mastek, Mind Tree, Mphasis, KPIT, NIIT Technologies, Hexaware and Geometric fell up to 5 per cent. The IT sub-index was the top sectoral loser on the Bombay Stock Exchange, falling 4 per cent.
The High-Skilled Integrity and Fairness Act of 2017 introduced by California Congressman Zoe Lofgren today prioritises market-based allocation of visas to those companies willing to pay 200 per cent of a wage calculated by survey. It also eliminates the category of lowest pay, and raises the salary level at which H-1B dependent employers are exempt from non-displacement and recruitment attestation requirements to more than $130,000.
This is more than double of the current H-1B minimum wage of $60,000 which was established in 1989 and has since remained unchanged.
The Bill comes in the wake of immigration policy changes in the US, days after President Trump took over. For Indian IT giants like Infosys, HCL etc, this move could escalate costs, and lead to massive losses of revenue.