A US court has refused to strike down, for the time being, an Obama-era rule that allows spouses of H-1B visa holders to work in America, providing a temporary relief to thousands of Indians living in the nation.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations.

A 2015 rule issued by former US President Barack Obama allowed work permits for certain categories of H-4 visa holders, primarily spouses of those having H-1B work visas waiting for their Green Card, to work in the US.

Indians, in particular women, are the greatest beneficiary of this rule, which has been challenged by several US workers with the current Trump administration supporting their cause, saying that it wants to rescind the rule.

A three-judge bench of the US Courts of Appeals for the District of Columbia Circuit on Friday sent the case back to a lower court noting that it is 'best to remand' to give the district court an opportunity to thoroughly assess and finally determine the merits in the first instance.

'Accordingly, we reverse the district court's grant of summary judgment and remand for further proceedings consistent with this opinion,' the federal court said in its order on the lawsuit filed by Saves Jobs USA.

Saves Jobs USA comprises American workers who claim that they have been laid off due to the policy of the Obama administration to provide work permits to H-4 visa holders.

By making H-4 visa holders eligible for lawful employment, the Department of Homeland Security (DHS), which oversees immigration, sought to 'ameliorate certain disincentives that currently lead H-1B non-immigrants to abandon efforts to remain in the US while seeking (lawful permanent resident) status, thereby, minimising disruptions to US businesses employing such workers', the court said.

It noted that the government has explained that H-1B non-immigrants and their families often face long delays in the process of obtaining permanent residence, and H-4 visa holders' inability to work during these delays leads to 'personal and economic hardships' that worsen over time, 'increasing the disincentives for H-1B non immigrants to pursue lawful permanent resident status and thus increasing the difficulties that US employers have in retaining highly educated and highly skilled non-immigrant workers'.

The judges also observed that the rule will cause more H-1B visa holders to remain in the US than otherwise would — an effect that is distinct from that of the H-1B visa holders' initial admission to the country.