Infosys Raises Red Flags On Visas Across Geographies
Changes to visa regimes across geographies may increase wage bill, hit profitability: Infosys
Infosys Ltd. warned that the expected increase in wage costs in the U.S. and other developed markets could impact its profitability as it ramps up local hiring.
Changes in the existing laws would “restrict offshore outsourcing or impose new standards” that restrict the use of certain visas, the Bengaluru-based company said in its annual filing with the U.S. Securities Exchange Commission.
The key risks flagged off by Infosys include:
- Taxes on companies that offshore work outside U.S.
- Restrictions on the number of H-1B visas.
- An increase in the minimum wages.
- An increase in visa fees.
Such measures would adversely impact our ability to do business in the jurisdictions in which we operate, and impact our onsite costs and profitability.Infosys’ Exchange Filing
U.S. Visa Worries
If the visa reforms proposed by the Donald Trump administration and the U.S. Congress are signed into law, it could also discourage customers from engaging outsourcing firms and disrupt the supply chain of talent, the Vishal Sikka-led company added.
As of March, Infosys had 14,859 employees with H-1B visas that allow employees to work in the U.S. for up to six years. It also had 1,549 employees with L-1 visas, which enable employees to stay on for a maximum of seven years.
The U.S. Citizenship and Immigration Services approves up to 65,000 H-1B visas every year, while 20,000 more are earmarked for those with master’s degrees or higher from U.S. universities. The U.S. received 1,99,000 visa applications in the financial year 2018.
"Increasing demand for H-1B visas, or changes in how the annual limit is administered, could limit our ability to access those visas,” said Infosys.
European Union Regulations
New regulations in Europe may deter companies from outsourcing work, according to Infosys.
Local laws that allow employees who are dismissed to seek compensation either from the company from which they were dismissed, or from the company to which the work was transferred, could also result in outsourcing firms being held liable for redundancy payments to such workers, added Infosys.
Clampdown Down Under
The Australian government has proposed to replace 457 visa programme, the most commonly used temporary work visas, with a more “more restrictive” Temporary Skill Shortage visa, Infosys said.
Enactment of such restrictive legislations could deter companies from outsourcing work, and inhibit outsourcing firms' ability to staff client projects on time, warned Infosys.