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Restrictions on L-1 Visas Could Increase Outsourcing

Written By The Shapiro Law Group on September 21, 2017

Forbes contributor Stuart Anderson has recently stated that recent L1 visa and US H1B restrictions could result in increased outsourcing of jobs. As the federal government and Congress continue to deny access to temporary visas, investing in outsourcing will only become more appealing. As a result of these restrictions, the US economy suffers and the country continues to lose its reputation as an embrace of foreign workers and investment.

More Self-Reliance Overseas

Because of recent visa restrictions, foreign companies are more likely to make use of their own available space and assets, including their own offices and business affiliates, while working with other companies to get around US immigration regulations.

Anderson predicts that as nearly every major company in the USA has expanded beyond the US, a growing number of businesses will rely on outsourcing as a direct response to strict immigration laws.

Fewer Outsourced Jobs with US Work Visas

On the contrary, more immigrants working in the US with US work visas will make companies more inclined to keep their businesses at home. Economist Tyler Cowen has stated that if outsourcing is a core concern for the government, it’s more ideal to practice liberal immigration laws instead of forcing more restrictions. More companies without in-house immigrant employees will turn to outsourcing as a means of working around it.

Supporting H1B and L1 Visas Decreases Outsourcing

Both the H1B and L1 visas together decrease outsourcing, as they allow talented foreign workers or students with a US education to stay within the country and gain long-term employment. While some argue that the H1B visa is a contributor to the increase in outsourcing, the truth is that when companies are transitioning to new contracts or service providers, the presence of employees isn’t that important.

IT Companies Suffer More with Visa Restrictions

The IT industry, specifically IT service providers, has suffered largely from the recent US immigration policies. Many of these companies rely on employees from foreign countries, with a majority from India who works with H1B or L1 visas. Because of this, they will likely outsource their work to these countries to maintain the same level of productivity and innovation.

Ultimately, outsourcing will likely only grow as long as L1 visa and H1B restrictions stay in place.