United States: ‘Hire American' Executive Order

End of days—or much ado about nothing?

The visa rules that allow US employers to temporarily hire certain foreign professionals is either going to change dramatically...or not, and there will have been much ado about nothing.

President Trump signed the "Buy American and Hire American" Executive Order (EO) on April 18, 2017. This EO does not change any existing law or regulation. It merely calls on the relevant federal agencies to make changes. This means employers can anticipate more, not less, government regulation and new agency policies, limited by US immigration law made by Congress.

Here is the text of the immigration-related components of the EO:

Sec. 5. Ensuring the Integrity of the Immigration System in Order to "Hire American." (a) In order to advance the policy outlined in section 2(b) of this order, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse.

(b) In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.

It is clear that the EO makes no new rule or change in law, unlike previous EOs like the travel bans. This EO merely instructs the relevant agencies to propose new rules and issue guidance, if appropriate, with the stated goal of protecting US workers and preventing fraud/abuse and suggesting H-1B reforms.

With so little information in the EO, what can employers expect. Limited insights can be gleamed from the backgrounder issued the night before this EO was issued, when the White House held a press briefing.

Enforcement

The EO merely instructs the agencies to issue proposals and guidance to prevent fraud or abuse. The backgrounder does not do much more than explain that the Administration seeks the strict enforcement of all laws governing entry into the US of foreign workers. The EO calls on the Departments of Labor, Justice, Homeland Security and State to take prompt action to crack down on fraud and abuse. The backgrounder states:

And then again, you add that on top of the across-the-board reform process for guest worker and visa programs in general to make sure that they're strictly complying with all the rules, laws, and protections for American workers, again, which there are many, but there hasn't been this kind of systematic review. And this is something that the President, if you look, actually promised that he would have the Department of Labor go and do this kind of systematic review and take these kinds of actions.

We will monitor agency actions carefully to see how this develops, but employers are well advised to review the immigration-related records keeping and compliance systems. Annual affirmative audits and trainings are best practices that the Immigration and Customs Enforcement agency looks to when considering whether to reduce fines and penalties for violators. Employers are well-advised to consult with counsel on what steps can be taken now, as well as expected changes that can be planned for.

H-1B visa random selection and wages

The EO instructs these agencies to suggest reforms to ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries. The backgrounder says that these agencies are expected to report back on proposed ways to change how new H-1B visa petitions are allocated.

Existing rules allocate the limited annual supply of new H-1B visa petitions for most US employers on a random-selection basis. The EO suggests that the foreign worker's skills and compensation be taken into consideration. Ironically, this would give preference to requests from employers who pay foreign workers more than the average paid to Americans.

The backgrounder acknowledges that some immigration changes can only be made by Congress. Just like the Obama Administration, however, the Trump Administration seems willing to bypass Congress and act unilaterally and not wait for Congress to act.

From the backgrounder:

But you could be looking at things on the administrative side, like increasing fees for H1B visas.  You could be looking at things like if we could adjust the wage scale—a more honest reflection of what the prevailing wages actually are in these fields. Obviously, taking a more vigorous stance, which various—in the Department of Justice do with respect to enforcing gross and egregious violations of the H1B program. You could see potential—and again, we'll have to get a full legal analysis and review from all the departments, but right now the lottery system disadvantages master's degree holders. There's ways that you could adjust the lottery system to give master's degree holders a better chance of getting H1Bs relative to bachelor's degree holders. There's a lot of possible reforms that you could do administratively in addition to a suite of legislative actions.  

There is no change in the H-1B random selection process, which is already concluded for fiscal year 2018. Changes can reasonably be anticipated for fiscal year 2019 filings in April 2018. What skills, wage offers, or other factors will impact the likelihood of selection remains to be determinedassuming that the status quo changes at all.

We will continue to share more information and analysis as the law evolves.

The full text of the EO is published on the White House web site; click here to read the backgrounder press release. To read the President's remarks on signing the EO click here.

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