Indian firms at risk of litigation from Project Firewall’s open language, wide scope
The project firewall, initiated by the US Department of Labor, envisions to launch investigations against employers to maximize compliance with the H-1B program. According to the ministry, the secretary will personally approve the launch of investigations for the department.
King Stubb & Kasiva, defenders and defenders Rohitaashv Sinha said, “The language in such provisions gives the US government, especially national interest, security or public policy concerns, in cases where concerns are stated.
Foreign firms should note that these powers can be used not only against US assets, but also against overseas companies with US contact points through contracts, customers, data processing or capital market presence. This includes Indian IT companies operating in the United States and American multinational companies employing Indian professionals within the scope of the H-1B Visa program.
New Delhi-based lawyer Russell A. Stamets, Circle of Counsels’ partner, the project firewall, almost absolutely small and large Indian CT companies and the US companies directly employing H-1B professionals, he said.
In the past, H-1B abuse incidents and Indian IT companies, recruitment and ignition practices, said there were allegations of racism. Authorized, the project firewall H-1B program will increase the long-standing criticism and the behavior of certain companies, he said.
“Indian CT companies are mature targets for such cases. The overwhelming majority of employees, even in the United States, ethnic Indians and significant lack of significant diversity make them a hypothetical target.” He said. “All Asian technology companies have the same potential problems.
Authorized, Indian companies are also facing the risk of whistle blowing responsibility, he added. Anyone who helps to cover up during an investigation will be responsible for a criminal, even if there is no underlying mistake.
The preparation of the rules seemed intentionally open -ended, according to Sinha, who could allow regulators or courts to interpret it extensively.
The real risk for Indian IT companies said that the rules have a retrospective application. The US government can reconsider past recruitment, visa usage or business applications using new standards.
“Uncertainty itself can lead to more opportunities, because companies can find themselves defending the actions taken years ago under the expanded framework of today,” he said.
Stamets agrees the same. “Past practices and current applications are definitely in the landscapes of US prosecutors under this administration. Indian companies now have the US capacity, but carefully need a lawyer,” he said.
However, at least one expert said the rules appear in nature in nature. Ray Wang, the founder of a technology research and consultancy company Contellation Research, added that “IT service companies (US department) have” better records “if they look back.
New H-1B Visa Rules
The project firewall comes after US President Donald Trump signed a executive order that requires a one-time payment of $ 100,000 for each foreign worker brought under the new H-1B visa regime. Non-US citizens in H-1B visas can work in the United States for up to three years, which can be extended up to six years.
According to Phil Fersht, CEO of the US-based HFS Research, an outsourcing-research company, the Ministry of Labor sends a very powerful signal that the US Department of Labor is sending a very strong signal that the US foreign IT companies want to stop leaning on H1B program and start investing more to American workers. “
“The project firewall is both symbolic and practical. It is symbolic, because it puts the workers’ secretary in the approval chain for unprecedented investigations. Practice, because it will increase control, supervision and penalties for companies that abuse the program or prioritize local recruitment,” he said.
“You can expect higher profile lawsuits to progress quickly with the secretary’s investigations personally approved the investigations. He said. “Even if a firm is completely compatible, increasing examination means more compliance costs and risk of reputation.”
India’s Tata Consultancy Services Ltd, InfoS LTD and HCL Technologies LTD, including the Largest Six Information Technology Service Company, was sent to the United States only in 2025 within the scope of the H-1B visa program. The ratio is higher for smaller companies.
This year, the number of H-1B visas sponsored by Indian CT companies in the United States has been the lowest since 2009, when US citizenship and immigration services began to announce this data. The number of engineers sent by the largest IT services companies in 2017.
Even then, Indian IT companies sponsor cumulatively for tens of thousands of H-1B visa.
During the signing of the order, Trump and US Trade Secretary Howard Lutnick said that the revised visa fee of $ 100,000 will be paid by companies every year and will also apply to H-1B visa renewals. However, on Saturday, the White House Press Secretary Karoline Leavitt announced that new visa fees are only a valid fee for new H-1B applications.
