United States: "Buy American, Hire American" And The H-1B Fallout

Last Updated: May 18 2017
Article by Roxanne H. Levine

On April 18, 2017, President Trump signed a new executive order, "Buy American, Hire American." With the stated goals of promoting economic and national security, strengthening the middle class and protecting the economic interests of American workers, the new executive order focuses on promoting and protecting American goods and workers. The order specifically highlights the H-1B visa program as a target for reforms.

The executive order directs the Secretary of State, Attorney General, Secretary of Labor and Secretary of Homeland Security to review the H-1B visa program and suggest reforms to ensure that H-1B visas are awarded to the most-skilled or highest-paid applicants. The executive order does not make any immediate changes to the H-1B program and does not set any timeline, stating only that review of the program and suggestions for reform should be executed "as soon as practicable." Since the program is based in statute, the Trump Administration is limited in its ability to alter the program. Any major substantive changes would have to be made by Congress, which may take a long time.

Impact on Employers

While the executive order will not have any immediate effect on the H-1B visa program, employers should be aware of possible suggestions for reform. The H-1B visa program allows companies to tap a global talent pool in order to fill jobs requiring highly specialized knowledge and skills. Despite a large percentage of H-1B visas awarded to foreign workers in the technology field, H-1B visas are also awarded to workers in all professional occupations; therefore, any potential changes to the program could have far-reaching impact on employers in many different fields including, for example, scientific research, law, engineering and other professional fields.

Currently, H-1B visas are awarded through a random lottery system. In order to steer H-1B visas to the most-skilled or highest-paid applicants, changes have been proposed that might include replacing the random lottery with one that gives preference to those with more advanced degrees or higher salaries, or raising the minimum salary required for H-1B workers. Giving preference to those with more advanced degrees, however, could limit the number of visas available for new foreign graduates with only bachelor's degrees. Similarly, giving preference to the highest-paid applicants could put smaller companies and start-ups at a major disadvantage since they often do not have the resources to pay employees, foreign or American, the highest market rate salaries.

The definition of a "specialty occupation" might also be a target for reform. Currently, a specialty occupation is defined as an occupation requiring theoretical and practical application of a body of highly specialized knowledge, inherently requiring the possession of a bachelor's degree or higher. A more stringent definition or heightened requirement to evidence that a job requires "highly specialized knowledge" would likely limit the availability of visas for entry-level positions.

In the announcement accompanying the order, President Trump also indicated that he believes fraud and abuse of the H-1B visa program is a major concern. As a response to this concern, employers have, and will continue to see an increase in site visits from the Department of Homeland Security (DHS). DHS issued a statement on April 3, 2017, announcing measures to "further deter and detect H-1B visa fraud and abuse." DHS announced that it will focus site visits on cases where the employer's business information cannot be verified, H-1B-dependent employers (employers having a high ratio of H-1B workers compared to American workers), and employers petitioning for H-1B workers who work off-site at another company's location. Random and unannounced site visits will also continue. Employers should be prepared to be able to verify the accuracy of the information in the H-1B visas of its employees.

Although no immediate changes to the H-1B visa program are on the horizon, and the stated goal of the Trump Administration requires legislative action, employers should be aware of and stay up to date on how their access to the global talent pool might be affected.

Legal intern Nicholas Forgione assisted with the preparation of this article.

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.

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