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Old November 30th, 2001, 04:51 PM
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New H1B visa rules to bloat IT cos' wage bill


HE US government's rules insisting on minimum wages for Indians travelling on H1B visas to the US for working on software projects is likely to impact Indian software services companies.

The regulation, passed in the third quarter of the current year, states that any individual visiting the US on an H1B visa will have to be given at least $60,000 salary on an annual basis.

The amendment states that if an employee on an H1B US visa is working on a project with an US company for less than $60,000 per annum, the employer will have to give a declaration that no local person has been laid off from that job in the last 90 days or will be laid off in the next 90 days.

US companies are not willing to give any declaration to this affect. Therefore, Indian companies will have to raise the salary of their employees working in the US to $60,000.

Software major Infosys expects its wage bill to rise by $1.9m as a result of these regulations. According to Mastek, chairman and managing director, Ashank Desai: “This is an unfair regulation as it fixes a minimum wage across the US for Indian companies. A person in New York working as a software programmer can get $60,000, but, a programmer working in any other state cannot command such an high salary.”

Companies like Satyam Computer Services, Wipro, TCS and Infosys working on onsite projects will see their wage bill go up. The rise in the wage bill is also expected to make these companies shift work to their offshore development centres in India and reduce their presence in the US. Officials from Satyam Computers were not available for comment on the implications of the amendment.

A Wipro spokesperson responding to queries from ET said: “The new rule impacts only the fresh visas availed. We have a salary structure where a part of the compensation is variable — that is, linked to the company performance. This component is higher at senior management levels. Our variable model balances out the compensation and business profitability. Therefore, the overall impact is insignificant.
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