Not just H-1B visa: India, too, has a debatable minimum wage requirement for foreign workers

Over the past fortnight, two new bills proposed before the United States’ government have left aspiring immigrants around the world on tenterhooks.

On February 8, two US senators proposed the Reforming American Immigration for Strong Employment Act, which aims to cut down legal immigration into the US by half over the next 10 years. If this RAISE Act is passed, the US will bring down the number of permanent residency documents, or green cards, issued every year from one million to half a million. For thousands of Indians living in the US who already wait for 10-35 years for permanent residency, this could mean a longer, more uncertain wait for a green card.

But Indians have been hit hardest by another bill, proposed on January 31, targeting the H-1B visa or work visa granted to foreign skilled professionals. Indians comprise the majority of H-1B visa holders in the US, and the proposed High-Skilled Integrity and Fairness Act seeks to hike the annual minimum wage requirement for H-1B visa holders from the current $60,000 (Rs 40.7 lakh) to $130,000 (Rs 88 lakh).

This could prove crippling for both Indian information technology companies, that outsource thousands of engineers and coders to the US every year, as well as American tech companies that thrive on a workforce of highly skilled, yet relatively cheap labour.

American tech giants have, in fact, been at the forefront of the ongoing debate on H-1B visa reforms in the US. Proponents of immigration reform believe a curb on work visas will help preserve local American jobs; opponents – like the tech companies – believe there is a dearth of qualified Americans who can fill mid-level positions.

While Indian professionals remain tense about the outcome of these proposed reforms in the US, it may be worthwhile to recall a similar debate in India a few years ago, on the minimum wage requirements of foreigners seeking work visas.

The $25,000 rule

In November 2010, the Indian government stipulated that skilled foreign nationals have to be paid a minimum annual salary of $25,000 – Rs 16.6 lakh at current rates – if they want to seek an employment visa in India. The only exceptions are foreigners employed as language teachers and translators, ethnic cooks and staff working for an embassy or high commission. The government’s move, aimed at keeping out unskilled foreign workers and preserving Indian jobs, triggered a long-standing debate on the need for a minimum salary for foreigners working in India.

For most Indian large firms that may hire foreign nationals in high-ranking positions, a salary floor of $25,000 is not much of a hindrance.

“An annual minimum salary is hardly an issue in India, because companies easily pay foreign employees more than $25,000,” said a senior human resources executive from Delhi who did not wish to be identified. “Besides, hardly anyone hires foreigners here.”

While this may be true for major Indian corporations that tend to hire foreign nationals in high-ranking positions, many start-ups, non-profit organisations and other smaller companies find the $25,000 minimum salary slab restrictive.

‘Salaries should be based on cost of living’

As an emerging economy, India is increasingly an attractive destination for young professionals from around the world – particularly eastern Europe – seeking diverse work experiences and cultures.

“Many foreigners who want to work in India are in their 20s, and don’t have the work experience to be paid more than $25,000,” said Aarti Chhabria, co-founder of Clap Global, an education start-up in Mumbai. Chhabria’s company has already faced difficulties in its attempts to bring on board employees from countries like Russia and Spain. “Our work involves engaging with foreign travellers in India, so it is important for us to have an international staff.”

Since 2013, the government has, on a number of occasions, proposed and deliberated on plans to cut down the minimum salary requirement for foreign employees. The rules, however, remain the same even today. Non-profit organisations now work around the $25,000 salary floor by bringing foreigners on board as volunteers who are paid a “stipend”.

Chhabria, however, believes the government’s rule is not realistic. “Salaries for foreigners should ideally be based on the cost of living index of a country,” she said.