February 24th, 2006, 11:19 AM
Some hope for H1B visa holders who contribue to Social Security
There is some hope for those H1B visa holders who come to the USA, contribute to the Social Security for the period of their stay and then go back to India. The money seems to be lost forever.
Bush Battles To Fulfill IT Demands
Wednesday, February 15, 2006
About 67% - that's $12bn - of the total Indian IT services and business process outsourcing (BPO) exports are accounted for by the US. And if you want the head count, about 35,000 Indian IT professionals are working in the US.
So with such an impressive presence, one would think that the Indian IT community in the US would be immune to the routine issues dogging sundry immigrants in the Promised Land. Right? Well, not exactly. Long-standing issues related to visas and social security refunds still plague the techie in US that is getting to be a major concern for the Indo-US fraternity.
The issue could come up for discussion during US President George W Bush's forthcoming visit to India. Some of these were also discussed when Prime Minister Manmohan Singh visited the US, in July last year. On visas, the problem areas are the limited availability of H-1B visas and the delays in getting them.
Besides that, Indian IT professionals pay about $500m in social security cuts every year. However, most of them never gets to avail the benefits of the system as one needs to work continuously in the US for 40 quarters or 10 years to reap the social security gains. A condition, that is not feasible, since employees could be going for shorter duration, often less than three years.
US has a Totalization Agreement with 21 countries including Korea, Japan, Chile and Spain whereby it refunds social security benefits to employees from those countries irrespective of their period of stay.
So far the US has refused to sign this with India. Says TCS executive vice president Pheroz Vandrewala, "It is up to the Indian government to get the Totalization Agreement up on the batting order during talks with the US delegation."
The US concern is that India does not have a proper PF arrangement or a social security guarantee for life. Says an expert, "The reality is that the social security administration in the US is never going to agree to a Totalization Agreement with India as they have a huge social security deficit back home."
On visas front , there is a cap of 65,000 H-1B visas (a three-year work visa) out of which about 30,000 are with Indian professionals. While this year it will not create too much of a problem as Indian IT majors have a bank of H-1B visas, if the limit is not increased it could lead to problems next year for the major US giants. President Bush has recently urged the Congress to raise the cap on H-1B visas but it is yet to get Congressí approval.
NASSCOM president Kiran Karnik says, "Visa cap and the speed with which these are issued are the main concern areas." For instance, professionals based in the South have to go to the Chennai consulate and there at times it takes three months to get a visa. The proposed US consulate in Hyderabad could help reduce that delay.
The broader issue on visas, says Mr Karnik, is to "move to a Services Provider Visa. This can be done at the WTO level. But thatís going to take time. The better option is to work out something bilaterally with the US."
For instance, if a Boeing engineer comes here for maintenance work for two months it is a very different kind of work, not a long-term stay, like, say, Microsoft hiring an Indian engineer in the US. Similarly, there could be an IT worker at Wipro who wants to go on some maintenance tasks for just a month to the US. If he has to wait for three months to get a H-1B visa, it creates lot of problems.
"These are the things that could be addressed with a Services Provider Visa," says Mr Karnik.
Companies are also looking at greater access to US contracts.
Says Laxman Badiga, CIO, Wipro Technologies, "As India opens up its trade for global investment and competition there has to be a reciprocative gesture from the US on free movement of people resources across borders. We are also looking at the US to ease restrictions on Indian vendors to bid for government and defence contracts. These represent a significant business opportunity for us."
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