New Proposed H1-B Restrictions May Drive Indian IT Companies to Mexico or Canada

New proposed Immigration Legislation which is currently pending in the United States Senate may cause India-based IT companies to step up their operations in Mexico. The bill, by Senators Dick Durbin and Chuck Grassley, would impose a new limit on the proportion of foreign workers who would be allowed to work in the United States under the H1B and L-1 visa programs. The proposed legislation said says for 50-50 rule, which means no more than half of a firm’s U.S.-based employees could be H1B or L-1 beneficiaries. This measure may create uncertainty in Indian IT firms, because their U.S. operations typically have a very high percentage of foreign employees, often far exceeding the proposed 50 percent limits.

Indian IT companies may need to expand their presence in Mexico, because Mexican employees could be sent to the United States under TN visas, available only to Mexican and Canadian nationals, pursuant to the North American Free Trade Agreement (NAFTA). Mexican employees whose education, work experience, and job category qualify them for TN visas, would be able to work in the United States without counting against the Indian company’s 50 percent cap on employees with H1B and L-1 visas.

The TN category is special category created under NAFTA (North American Free Trade Agreement) for qualifying professionals who are nationals of Canada or Mexico. Aliens qualified to enter the U.S. under this category may work for a company located in the U.S. for a temporary period. Moreover, they may also work for a Canadian or Mexican company in the U.S. when those companies are engaged in projects with U.S. based companies. The initial time limit for a TN professional to work in the U.S. is one year. However, this period may be renewed indefinitely, at year to year increments.

There are two different types of TN status. A TN-1 refers to a Canadian professional, and a TN-2 refers to a Mexican professional.

Benefits of a TN-2 visa for Mexican professionals:
1. TN status allows professional workers to enter the United States and work in a professional capacity.

2. Renewal can be Indefinite- Unlike H status which usually has a limitation of six years, an alien can maintain TN status indefinitely. TN status is granted for a period of up to three years depending on the employer’s need and can be renewed for an additional year. There is no limitation on how many times TN status can be renewed.

3. Special TD STATUS for Dependants: Dependents of the TN-1 petitioner may apply for a special TD status and accompany the principle petitioner for the duration of his stay in the U.S.

4. Low Application Fee: The TN-2 applicant pays a $110 application fee as opposed to $2,320 ($320+$500+ $750/$1500) in application fees for H-1B status.

5. No Quota/Cap: Unlike H-1B applicants, TN applicants are not subject to a quota
It is not clear whether the Durbin-Grassley proposal will be enacted but it may possible in the current scenario that H1-B restrictions come to pass, however, NAFTA TN visas could provide some additional flexibility to Indian IT companies, and an incentive to increase their presence in Mexico or in Canada. We suggest the Indian IT companies to look forward to this option as well.