American workers scored a big victory last week as the U.S. Senate passed a bill increasing fees for skilled-worker visas, which are used by Indian technology companies to send workers to the U.S.

The new fees would affect companies that have over half their U.S.-based employees on H1-B or L-1 visas.

Because of that distinction, most American tech companies would be exempt from the new fees.

Those that would be burdened by the new fees are Tata Consultancy Services Ltd., Infosys Technologies Ltd. and Wipro Ltd., India’s largest software exporters. Those companies are notorious for providing cheap Indian talent for American software companies.

The added fees would cost those companies roughly $2,000 for each visa application. That is on top of fees already totaling around $2,000, meaning the price of outsourcing is set to double.

The total cost for India’s $50 billion outsourcing industry is expected to be $200 million to $250 million annually.

India firms have vowed to fight the legislation, which would still need to be passed in the House.

“It’s discriminatory and odd that the Indian IT industry has to go and subsidize the Mexican borders,” Som Mittal, president of Nasscom, said according to The New York Times. “We already pay over $1 billion in social security annually for which we do not get any benefits.”

Other India officials questioned whether or not the fees are legal under World Trade Organization rules, and have suggested they could take the case to the international trading body.

“I’m thrilled that these companies are complaining about having to hire more Americans,” Senator Claire McCaskill, a Democrat of Missouri and a co-sponsor of the bill, said on the Senate floor. “That is the whipped cream and cherry on top of this sundae.”

The program, however, has been fraught with problems and abuses, most of which have hurt American workers.

The abuse of the program is so rampant a 2006 Department of Labor study found that “… H-1B workers may be hired even when a qualified U.S. worker wants the job, and a U.S. worker can be displaced from the job in favor of the foreign worker.”

While the legislation could discourage some of the most egregious abuses of the program, it does not go far enough, according to one expert.

“A $2,000 fee per visa may cut slightly into the bottom lines of these extraordinarily profitable firms, but it isn’t large enough to alter their business models,” Ron Hira, an associate professor of public policy at the Rochester Institute of Technology, told Computerworld. “The cost savings of importing a guest worker versus hiring an American worker is at least an order of magnitude higher than this additional fee, especially with L-1 visas.”

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