USIBC’s Ajay Banga Cautions Congress: Drop IT-Contracting Language from CIR

Though odds are growing longer that Congress will pass a comprehensive immigration reform (CIR) bill this year, many in the business community remain concerned about what might happen if CIR does pass. Why? As we noted in a recent post, language in the Senate immigration bill – the one that passed in June – would prohibit certain IT consulting firms from placing H1B employees offsite, if the firm is deemed to be H1B dependent. Under the Senate bill, a firm is H1B dependent if at least 15 percent of its workforce is in H1B status.

Murthy Law Firm founder and president, Sheela Murthy, is among the many prominent U.S. entrepreneurs who have been raising the alarm about the Senate CIR bill’s IT-contracting language. Together with her colleagues at the U.S.-India Business Council (USIBC), Murthy has warned Congress in no uncertain terms that dire consequences would ensue, should it establish these discriminatory barriers to market participation. [See Murthy and Five Former Ambassadors on Senate IT-Contracting Language, MurthyBlog, 07.Oct.2013.]

In recent weeks, this admonitory chorus has been building to a crescendo. Five former U.S. Ambassadors to India have spoken out against the Senate IT-contracting language, and Murthy’s USIBC colleague – MasterCard president and CEO, Ajay Banga, who chairs the USIBC – recently voiced his concerns as well. Writing in a leading Capitol Hill newspaper, The Hill, Mr. Banga cautions that the “outplacement prohibition,” along with several other punitive provisions in the Senate CIR bill, would not only “put global IT service providers at a disadvantage, [it] would come at a great cost to their U.S. customers who depend on their outplaced H1B or L-1 employees.” [See Comprehensive Immigration Reform is Essential; But Not at the Expense of American Jobs and Competitiveness, by Ajay Banga, The Hill (Congress Blog), 30.Sep.2013.]

Mr. Banga argues cogently that the outplacement prohibition is:

• Unfair, and discriminates against Indian IT companies; as Mr. Banga contends: “there is no reason for government policy to differentiate between any two IT companies that compete to provide essentially the same services in essentially the same ways with essentially the same labor pool.”

• Bad for American businesses that need the IT services these contractors provide, because “the harmful effects would cut across an array of American industries looking to keep their business growing, from construction and transportation to travel and tourism. These companies, customers of the 24/7 ‘knowledge economy,’ rely on it to keep growing and creating jobs.”

• Damaging to U.S. competitiveness and job growth, because it would “imperil the thousands of American jobs that have been created as part of the building of that knowledge economy, and undercut the very drivers for making more IT professionals available to meet American needs.”

• Counterproductive, because the U.S. economy depends on IT and other specialized professionals to keep growing, but currently cannot produce enough of them domestically; as Mr. Banga points out: “the reality is that talent must be sourced from around the globe so our companies can continue to compete successfully on the global stage.”

Like Ms. Murthy, Mr. Banga believes it is imperative that Congress drops the Senate’s IT-contracting language before any immigration reform legislation – comprehensive or otherwise – reaches the president’s desk. Anything else would inflict needless damage on the economies of both trading partners – bad for both, and something neither can afford.

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