Chip Roy's H-1B draft bill would eliminate the green card pathway, scrap OPT, and cut visa duration to two years. IT services margins face 200-300 bps compression risk.
Representative Chip Roy introduced the American White-Collar Worker Jobs Act Thursday. The draft bill would eliminate the H-1B visa role as a pathway to permanent residency, scrap the Optional Practical Training (OPT) programme, and cut the maximum visa duration from six years to two.
The bill targets the legal migration channels that supply a large share of engineering talent to U.S. technology companies and IT services firms. For investors, the immediate question is whether the market begins to price legislative risk in stocks that depend on low-cost H-1B labour.
The single most consequential provision removes the dual intent doctrine. Dual intent allows H-1B holders to pursue a green card while working. Under the proposed language, applicants must demonstrate they maintain a residence abroad and do not intend to abandon it. This reverses a policy that has let employers treat the H-1B as a multi-year pipeline into permanent residency.
The bill also repeals provisions that let H-1B holders extend their status while awaiting green card processing. That effectively caps an employee's stay at the visa maximum, regardless of how far along they are in the green card queue.
Roy shortens the maximum H-1B duration from six years to two years. He replaces the existing lottery system with a process that prioritises applications offering the highest salaries. This eliminates the random allocation that gives small and mid-size firms a chance at foreign talent, concentrating visas among employers able to pay top-of-market wages.
The OPT programme, which allows foreign students at U.S. universities to work for up to 36 months after graduation, would be scrapped entirely. OPT is the primary entry point for STEM graduates into the U.S. workforce. Its repeal would cut the flow of early-career engineers into the tech sector.
The bill is backed by US Tech Workers, the Immigration Accountability Project, and the Federation for American Immigration Reform. Arizona Republican Congressman Eli Crane is a co-sponsor. Roy is retiring from Congress and lost the Republican primary for Texas attorney general. A retiring member introducing sweeping legislation reduces the bill's short-term viability, yet the provisions align with the current administration's direction.
The bill arrives after the Trump administration already tightened H-1B rules. The administration raised wage requirements for applicants, reduced approval rates for new petitions, and introduced a $100,000 fee on new filings. These regulatory changes have raised the cost of hiring foreign talent. The Roy bill would accelerate that trend by orders of magnitude, imposing structural constraints rather than just higher costs.
The H-1B programme is not a marginal input for the IT services industry – it is the engine. India-headquartered firms such as Infosys, Tata Consultancy Services, Wipro, Cognizant, and HCL Technologies rely on H-1B talent for a large share of their U.S. workforce. Their business model depends on deploying teams of engineers to client sites, often at wage levels below what comparably skilled domestic workers would command. Removing the green card pathway and capping the visa at two years would force these firms to rotate employees more frequently, raising training costs, travel expenses, and attrition risk while lowering the efficiency of long-duration client engagements.
“The bill will effectively address many of the egregious aspects of the H-1B visa programme that have not merely encouraged but enabled corporations, universities, and NGOs to displace our most productive workers with cheaper and more quiescent foreigners.” – Kevin Lynn, President, US Tech Workers
The table below shows the approximate U.S. revenue share for major IT services firms based on recent public filings. These figures help quantify the risk. Firms with a high share of U.S. revenue and heavy reliance on H-1B talent face the greatest margin pressure.
Note: Revenue shares are estimates based on public filings. H-1B reliance is qualitative, based on industry reports.
Consider a typical engagement: a U.S. client requires a team of 50 engineers for a three-year project. Under the current six-year visa, a single H-1B hire can work through the entire project. Under a two-year limit, the firm must either rotate engineers out at the two-year mark – incurring visa-filing fees, relocation costs, and knowledge-transfer delays – or staff the project with more expensive domestic hires. The cost delta runs 30% to 50% per engineer annually when accounting for visa compliance and overhead. For Infosys, where employee cost is roughly 60% of revenue, a 10% increase in the blended cost of U.S. headcount would compress operating margins by about 200 to 300 basis points.
U.S.-headquartered firms such as Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), and Amazon (AMZN) use the H-1B programme to hire specialised engineers in artificial intelligence, machine learning, and cloud infrastructure when domestic supply is insufficient. These companies can absorb higher wages more easily than IT services firms. The loss of the dual-intent pathway would make it harder to retain top foreign talent. A two-year visa limit combined with no path to green card would likely cause many highly skilled workers to choose competing tech hubs in Canada, the U.K., or Singapore – countries with clearer immigration routes.
For large cap tech, the primary impact is not a direct cost increase but a talent scarcity premium. In a market where compensation for top AI talent already exceeds $500,000 annually, further scarcity would push those numbers higher. The effect on R&D velocity in high-priority areas like AI and semiconductors would show up in slower product release cycles rather than quarterly margin misses. This is a longer-duration risk that markets tend to underprice initially.
A 200-basis-point margin compression would reduce earnings per share by 15% to 20% for firms with high U.S. exposure. Using a forward P/E of 20x for Infosys, that translates to a roughly 15% downside to the stock price on fundamental repricing alone – before accounting for any multiple contraction from increased regulatory risk. For Wipro, where U.S. revenues represent a higher share of total revenue, the downside could be closer to 20%.
The margin compression is not linear. Shorter visa durations increase the cost of every client engagement, which in turn reduces the competitiveness of IT services firms against domestic alternatives. If U.S. clients begin shifting work to local consulting firms or in-house teams, the revenue base itself could shrink. That would create a second-order valuation hit beyond the direct margin impact.
For broader context on how regulatory risk impacts tech and IT services valuations, see AlphaScala’s ongoing stock market analysis.
The market currently prices near-zero probability of passage for the Roy bill. Yet the political backdrop is shifting, and parallel executive actions could bypass the legislative process entirely. Traders focused on INFY, WIT, CTSH, AAPL, and MSFT should track the signals outlined above, not the bill’s headlines alone.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.