US President Donald Trump
US President Donald Trump
PIC: AFP

President Donald Trump's recent executive order that bans H-1B workers in federal contracts is based on misperceptions and misinformation, IT industry body NASSCOM said on Tuesday.

The order on 'Aligning Federal Contracting and Hiring Practices with the Interests of American Workers' focuses on reviewing and policy development around federal contracting and H-1B programme rather than mandating immediate changes, it said in the statement.

NASSCOM said this underscores and sets a timeline for the agencies to finalise and publish some of the regulatory measures that have been discussed by the administration and mentioned again in the June Proclamation, which banned entry to non-immigrant visa workers till December 31, 2020.

"The order is particularly coming at a time when there is a huge shortage of STEM skills in the United States, that workers on short-term non-immigrant visas like H-1B and L-1 help bridge," NASSCOM said.

While the unemployment rate has increased to 13.5 per cent in May from 4.1 per cent in January since the onset of the pandemic, it declined in computer-related occupations which most H-1B visa holders avail of. The unemployment declined from 3 per cent in January to 2.5 per cent in May.

In addition, there were over 625,000 active job vacancy postings advertised online for jobs in common computer occupations, including those most common to H-1B visa holders, the NASSCOM statement added.

"As the world opens up post the Covid-19 induced lockdowns, it is important for the United States to be able to access talent critical to the recovery phase. Measures that restrict access to talent will slow-down the recovery phase of US economy, jobs, innovation and research and development," said NASSCOM in the statement.

The recent US order directs the heads of each federal department and agency to review the use of offshore services as well as temporary foreign labour such as H-1B and L-1 in the execution of contracts awarded in FY 2018 and 2019 and issue a report within 120 days to the Director of the Office of Management and Budget.

The budget agency can review and recommend changes and also propose Presidential action if needed on these contracts.

In addition, the executive order also requires the Secretaries of Labour and Homeland Security to take action within 45 days to protect United States workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites (including third-party job sites).

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