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New US labour laws put IT firms in a spot

Bangalore, Aug 28 () : Labour condition application (LCA) in US will make it mandatory for IT companies to reveal the details of the client who are outsourcing their work force. The US-based clients who outsource from Indian companies have a clause of non disclosure in their contracts which puts the IT companies mandatory to go in for hiring US citizens and thereby raising salary bills.

The first blow to IT industry was the huge hike in visa fees for H1B and L1 visas. The US in 2010, increased the application fee of both H-1B and L-1 visas from $2,300 to $4,300. Next was the rejection of L1 visa which is as high as 50%. The visa rejection which was as low as 2% in 2008 now averages around 40-50% this year.

Indian IT majors never took the warning by US leaders and officials seriously when they said that employing more Americans would be the new labour law and dismissed it as election year statements.

With no plan to counter the US upcoming labour, IT companies are now scrambling for recruiting Indian origin US green card holders and locals. Independent subcontractors who are available in plenty in the US are now the source since they have a lot of people on contract.

With 50% rejection rate, the companies file double the number of applications thereby raising costs. Most of these companies have also set up dedicated HR and recruitment teams in the US to energise its local recruitment drive.

Infosys posted senior VP and group HR, Nandita Gurjar to the US to energise its local recruitment drive. The company,in its attempt to energise its local recruitment drive appointed Lisa Kidd in the position of HR head for the Americas region. Lisa Kidd was a former director of HR at Hewlett-Packard.