New US visa laws to push costs for domestic IT cos: Gartner

The proposed US legislation on immigration reforms will increase the visa-related costs for domestic software firms like Tata Consultancy Services and Infosys, research firm Gartner said.

The bill proposes to increase the H-1B visa fees to about $5,000 per application.

The bill before the US Congress relates to immigration reform, including restriction on deploying resources on-site, higher visa costs and increase in wages for H-1B visa holders.

The proposal, which could come up for discussion in the later part of this month in the US house, and if the bill is passed then it will become law by early 2014, would disrupt the business model of top software companies by forcing them to remove professionals on H-1B work permits from on-site

client locations in the US, Gartner said.

"Most, if not all, Indian IT service providers will be deemed visa-dependent. Albeit to varying degrees, their ability to deliver services will potentially be hindered by this new law.

"The key proposals that are disruptive to the IT companies are outplacement restrictions, increase in visa fees, numerical restriction that is imposed on visa applications and government-mandated salary increase based on a more condensed wage system," Gartner research VP and invest analyst Sandra Notardonato said in a webinar.

The bill may force companies to file fewer visa petitions effective October 2014, as the cost per petition would increase by about $5,000.