United States: Tech Sector Braces For Possible Impact From President-Elect Trump's Immigration Agenda

As most of the American public, and indeed the world at large, watches President-elect Donald Trump in an effort to discern what his specific plans will be upon taking office, one of the groups that will be watching with particular interest is the high-tech sector. At the moment, and for some time into the future, President-elect Trump is going to be drinking from the proverbial fire hose when it comes to the details of public policy. While he comes into office with strongly held views and clearly espoused positions on a range of immigration issues, most of those are aimed at enforcement and border security—to wit, his pledge to build a wall along the U.S.-Mexico border and to deport millions of undocumented immigrants with criminal records. Less fully formed—or at least less fully discussed and vetted—are the President-elect's specific intentions with regard to business immigration. With ongoing reliance on a steady supply of highly educated and highly skilled foreign professionals to fuel their growth and innovation, technology companies from Silicon Valley to Boston and in virtually every city in between are poring over President-elect Trump's various statements and appointments in order to prepare for what is to come.

Those seeking detailed clarity on President-elect Trump's intended approach on specific business-immigration issues, however, may find a less-than-satisfying reality where partial pronouncements on policy and shifting reports from the transition team yield a response that has less in common with the finely tuned policy positions with which political observers have become accustomed than it does with a Magic 8 Ball answer: "Reply hazy. Try again." Make no mistake; there could be repercussions for the tech sector from any number of actions that President-elect Trump might take on immigration. There could even be impact from his actions taken in other areas such as trade and national security. What is less clear—for now—are the exact parameters of those possible impacts. Fortunately, there are indicators that should help the technology sector plan and prepare for what is ahead.

Increased Scrutiny and Hurdles for H-1B Visas

President-elect Trump highlighted the theme of protecting American jobs as a key platform of his campaign. In a recent video that the President-elect released to YouTube in which he shared an update on the presidential transition and an outline of some of his policy plans for the first 100 days in office, he signaled that he "will direct the Department of Labor to investigate all abuses of visa programs that undercut the American worker." This has been widely interpreted as a reference to perceived abuses of the H-1B visa program that is used commonly throughout the tech sector and, indeed, throughout many sectors of the economy where so-called STEM (Science, Technology, Engineering, and Math) skills are in demand. This pronouncement is consistent with other statements the President-elect made during the course of his campaign wherein he called for: (1) increasing the prevailing wages employers must pay to their H-1B workers in order to protect the wages of their American counterparts from being undercut, and (2) requiring that all employers recruit U.S. workers before hiring an H-1B worker. At a rally in Cincinnati, Ohio, on December 1, 2016, President-elect Trump again echoed these themes when he said, "[W]e will ask Congress to reform our visa and immigration programs to protect jobs and wages for American workers."

As currently in force, the purpose of the existing prevailing wage requirement is to help ensure that the pay received by foreign nationals is on a par with that of similarly employed American workers in a specific occupation. Should the President-elect push to increase the prevailing wage determination, it would make the prospect of bringing on an H-1B employee even more expensive for U.S. employers. To President-elect Trump's other point, while recruitment is part of the current labor certification process that can lead to a green card in cases involving employment-based permanent residency, its use in temporary business visa contexts has been more limited. The recruitment requirement is currently a condition applied only to those H-1B employers found to have willfully violated their H-1B obligations, or those deemed to be "H-1B dependent." For example, an employer with at least 51 full-time equivalent employees in the United States is considered "H-1B dependent" if at least 15 percent of its workforce is comprised of H-1B nonimmigrants. Expanding the recruitment requirement to all employers seeking to bring on an H-1B worker would saddle the temporary business visa program with an additional burden. For the tech sector, this would translate to lost time and increased cost—two factors that are anathema to most industries, let alone one whose members must keep up with the constant demands of Moore's law concerning the steadily driving pace of technological growth and advancement.

It is worth noting that in the same video where President-elect Trump issued his clarion call to have the U.S. Department of Labor investigate all abuses of visa programs, he also declared, "I want the next generation of production and innovation to happen right here on our great homeland, America, creating wealth and jobs for American workers." As he looks to fill in the details of his approach on business immigration, President-elect Trump is certain to hear a strong case from technology companies and many other businesses that the popular H-1B visa is a key ingredient in their ability to deliver the very production and innovation that the President-elect has said he wants to keep here at home. If this appeal strikes a chord with the President-elect, particularly given his generally pro-business leaning, then that could tip the scale in favor of H-1B reforms and investigations that are either more modest or more targeted.

While the exact nature and extent of any actions the President-elect will ultimately direct his administration to take on H-1B visas remains to be seen, concern over those potential changes could boost the number of H-1B petitions that companies file in the short-term as companies attempt to secure visas ahead of any pending reforms that could make visas harder to obtain.

Outsourcing on the Hot Seat

If the tech community, in concert with a broader business coalition, is able to persuade President-elect Trump of the value of the H-1B program to their businesses and of the role that H-1B workers play in creating jobs and wealth in the United States, then those tech companies that hire highly skilled foreign nationals to work for them directly (and that frequently go on to sponsor those workers for green cards) may be spared some of the more potentially disruptive reforms rumored to be under consideration by the incoming administration. Instead, foreign-owned outsourcing firms that hire the largest numbers of employees on H-1B visas in order to provide them, in turn, as outsourced contract workers to other companies in various sectors may find themselves the primary focus of new reforms and restrictions. It bears repeating that, as with the details concerning other possible policy actions the Trump administration may take, this focus is also still a matter of conjecture.

Despite President-elect Trump's ties to the business community, his campaign's emphasis on protecting American jobs as a key platform could also provide renewed impetus within Congress for enacting legislation aimed at tightening some aspects of business immigration beyond just the H-1B visa. Although no specific proposals have yet been put forward, and none may even emerge, a brief case study could help to illustrate one potential scenario. For example, in November of 2015, Senators Charles Grassley (R-IA) and Richard Durbin (D-IL) reintroduced legislation (S.2266, the "H-1B and L-1 Visa Reform Act of 2015") intended to crack down on perceived abuses of the H-1B program and to reform aspects of the L-1 visa program. Although earlier bids to pass that legislation were unsuccessful, President-elect Trump's arrival in the White House, combined with increases in the Republican control of Congress, could help the reform proposals find new cover. The nomination of Senator Jeff Sessions (R-AL), Chair of the Senate Immigration Subcommittee and cosponsor of the reform legislation, to become Attorney General of the United States could also encourage support for such reforms among his fellow Republican senators, albeit indirectly. Targets of any such renewed legislation could focus on a variety of potentially restrictive reforms including moves to increase fees, impose stricter numerical limits, establish new wage floors, create enhanced federal investigatory powers, or other measures aimed at curbing the perceived outsourcing of jobs.

Ironically, although many of the potential business immigration policies discussed above may be aimed at curbing outsourcing as a means of protecting American jobs, the cumulative effect of such efforts (should they ever come to pass) could prompt technology companies to offshore a growing number of projects rather than continue to face mounting hurdles and costs related to the hiring of high-skilled workers here at home. New projects could be slated for development outside of the United States if tech businesses see such a move as the best way to avoid the potentially damaging interruptions that could come from a major retrenchment of business immigration policy.

Mandatory E-Verify and Increased Form I-9 Audits

Technology companies should also prepare for a climate of increased investigations and enforcement actions. The President-elect's pledge to triple the number of U.S. Immigration and Customs Enforcement (ICE) agents, found in his "10 Point Plan to Put America First," signals the possibility of a significant increase in worksite enforcement efforts. This could include an escalation of Form I-9 worksite inspections by ICE agents as well as a shift from assessing fines for most violations to actually bringing more criminal prosecutions. The President-elect's transition team has also put forward a proposal to make mandatory the use of E-Verify, an Internet-based system employers can use to confirm the employment eligibility of their employees. While this move would require legislation to be enacted, the fact that it is under consideration further underscores the likelihood that employers, including tech companies, may soon be operating in a climate where additional screening and increased scrutiny is the new normal.

Narrowing the Path to Employment Authorization

While not intended to target the tech community, President-elect Trump's vow to undo President Barack Obama's executive actions on immigration could also remove options for employment authorization that some in the tech workforce enjoy today. The President-elect has repeatedly stated that he will get rid of Deferred Action for Childhood Arrivals (DACA), a program initiated under President Obama that has provided temporary protection against removal from the country and conferred work authorization to qualifying foreign nationals who came to the United States unlawfully while they were still children.

Another of President Obama's executive actions directed the U.S. Department of Homeland Security to create a so-called "start-up visa." The visa is intended to encourage entrepreneurship by granting temporary permission to live and work in the United States to individuals on a case-by-case basis based on an individual's recent formation of a start-up entity in which the applicant possesses at least 15 percent ownership. The "start-up visa" has been through the required regulatory notice-and-comment period, but has not yet been published in the Federal Register and so has not yet taken effect. Once in effect, the nature of this visa would make it a natural fit for people looking to start new technology companies. It is possible, however, that President-elect Trump may look to prematurely end this path to employment authorization by rescinding the executive action that created it. If the President-elect takes this action before the new rule creating the visa is published, then it would effectively die on the vine. However, if the rule creating the start-up visa is published and takes effect before President Obama leaves office, then the President-elect would need to follow the appropriate regulatory processes if he wanted to walk it back.

Elsewhere, if President-elect Trump makes good on his pledge to either renegotiate or repeal the North American Free Trade Agreement (NAFTA), that move could pull the rug out from under the TN visa which some foreign nationals from Canada and Mexico rely upon for work authorization. This is new territory, however, and there are still many considerations and complications that could militate against a total unravelling of NAFTA or that could, at a minimum, play out in a way that preserves core elements of the TN visa. Although the Free Trade Agreements (FTAs) that have been struck with Chile and Singapore do not figure as prominently on President-elect Trump's radar screen, any actions to reopen their terms could have implications for the 6,800 H-1B visas set aside under current policy for foreign nationals from those countries. Even if the President-elect takes action on the underlying FTAs that results in the elimination of this set-aside of visas, it is possible that those 6,800 visas could simply be added back into the general pool of 65,000 H-1B visas under the annual cap.

Vigilance Will Be a Virtue

It would be premature to consider any of these possible changes as certain to occur. Using recent history as a guide, those interested in the full impact that the new administration could have on the technology sector may want to take predictions and prognostications from "insiders" with a healthy grain of salt. There are still many unknowns, and conventional wisdom has proven to be a very poor indicator of President-elect Trump's actions or outcomes so far. For the time being, technology companies may want to (1) stay informed; (2) be proactive in getting their workforce needs filled as expeditiously as possible; and (3) take care to separate speculation from fact as rumors and reports of the President-elect's immigration plans continue to come in over the ensuing months.

This article was first published in the December 7, 2016, edition of JD Supra Business Advisor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions