On April 18, President Donald Trump signed an executive order which focused on two areas of the administration’s policy: protection of American jobs (“Hire American”) and preference for U.S.-manufactured goods (“Buy American”). With regards to the protection of U.S. jobs, the order includes a section directed to the H-1B visa program.
Trump has previously expressed his discontent with the H-1B lottery process, through which 85,000 applicants are selected annually at random out of a pool of hundreds of thousands to gain the right to live and work in the United States for up to six years. This executive order represents the first step toward making selection less reliant on a random lottery and more focused on the highest-skilled and highest-paid workers. We agree; the system needs to be improved.
The order specifically tasks the Secretary of State, Attorney General, Secretary of Labor, and the Secretary of Homeland Security to review employment-based foreign worker programs and to recommend changes “as soon as practicable.” In so doing, the executive order directs the heads of these federal agencies to crack down on fraud and abuse, act consistently with applicable laws and to propose new rules and issue new guidance to replace or revise previous rules if necessary. Furthermore, a section of the executive order calls for strict enforcement of all laws that govern the use of non-U.S. labor to ensure that the H-1B visas are awarded to the “most skilled” or “highest paid” petition beneficiaries.
Future changes will most likely affect technology companies Since large tech companies employ approximately 15 percent of the allotment of H-1B holders and nearly 40 percent of these visas go to entry-level workers. Trump hopes to lower this number to ensure that the visas go to more highly-paid workers. This will surely affect non-profit organizations, small businesses, and start-up companies alike because they are simply unable to pay higher wages. Consequently, skilled workers are forced towards bigger, already-established companies such as Google, Amazon, and Facebook. Regardless, H-1B positions have always mandate the payment of a specific minimum salary determined by the department of Labor.
Consulting companies will also likely face increased scrutiny. After all, Indian IT companies, and even Disney were singled out in White House press briefings as abusers of the program through “insourcing.” This is the practice wherein the companies laid off hundreds of IT workers and then hired H-1B immigrants to perform essentially the same functions, further claiming that these positions could not be filled by the American workforce.
While there is no immediate effect on the H-1B visa system, changes will likely entail replacing the lottery system for a more merit-based system. Adopting a more merit-based system which gives preference to the highest-paid workers has drawn dual-party support from Congress. Furthermore, the administration seeks to move away from the current lottery system in order to allot visa numbers towards “higher skilled” and “higher paid” individuals, with particular emphasis on those who have attained U.S. Master’s degrees.
Any change—such as cutting the total number of visas issued annually—requires legislative change, but the executive branch could potentially make adjustments such as increasing application fees, adjusting wage scales to better reflect prevailing wages, and directing the Department of Justice to work more diligently in detecting and even punishing fraud or abuse of the program.
Trump continues to focus on protecting jobs for American workers and ensuring that the H-1B program is limited to recruitment of only the best and the brightest. The executive order does not change any existing rules or procedures and will not affect the most recent H-1B season. However, it does aim to modify or replace the current lottery system for a merit-based system. We commend the Administration on its desire to make H-1B visas great again.
Kelly S. O’Reilly is a nationally known immigration expert and former immigration officer. He is a highly sought after speaker on immigration and employment compliance issues. Mr. O’Reilly serves as the current chair of the Riverside County Bar Association Immigration section and is a partner in the full-service immigration firm of the Wilner & O’Reilly where he provides free consultations. Mr. O’Reilly can be contacted at (714) 919-8880 and he welcomes email inquiries at email@example.com.