Immigration Reform Bill Takes Aim at Indian IT Outsourcing Companies

India's application development and maintenance business will take a hit if a provision of the U.S. Senate immigration bill becomes law, and some experts say the restrictions will drive more outsourcing offshore. CIO — As the most recent version of immigration reform heads to the U.S. Senate for a full vote, outsourcing industry watchers have their eyes on several provisions that could drastically alter the way Indian IT service providers do business in the U.S.

The bill, which cleared the Senate Judiciary Committee Tuesday, relaxed requirements related to layoffs and recruiting for companies for whom skilled visa holders make up a smaller percentage of their staffs, like American outsourcing giants IBM and Accenture, while subjecting those businesses deemed "H-1B dependent", like India's IT service providers, to much more stringent conditions.

"In an effort to address concerns about staff augmentation companies, commonly referred to as 'job shops,' the unnecessarily broad restrictions on the outplacement of H-1B and L-1 workers would virtually put the Indian IT firms out of business," says Paul W. Virtue, partner in Baker & McKenzie's Global Immigration & Mobility Practice Group