U.S. President Donald Trump signed an executive order Tuesday to compel U.S. companies to hire more American workers, but the proposed changes will require congressional action to have any significant impact.
The new “Buy America, Hire America” order directs government agencies to enforce rules against immigration fraud and abuse and proposes reforming the H-1B visa program to give priority to the “most skilled or highest paid applicants” instead of selecting them in a lottery system. It also aims to toughen “Buy America” rules, which favors American companies in federal government contracts, and orders a broad review of U.S. trade agreements containing waivers to procurement rules.
The president could renegotiate or rescind agreements that aren’t deemed fair or reciprocal.
H-1B visas are awarded to skilled workers, such as software engineers, professors, doctors, and lawyers, through a lottery system and subject to a wage scale. This year, the program received 199,000 new applications for 85,000 spots — a 15 percent drop from the past two years. Trump criticized the program on the campaign trail, arguing it allows U.S. companies to hire low-cost foreign workers instead of American workers, and said he would end it.
The administration believes that weaknesses in the H-1B program and loopholes, waivers and lax enforcement of policies aimed at steering government procurement to U.S companies have hurt American workers. But for now, Trump’s proposed changes to the visa program is more of a wishlist than an action plan. Congress would need to approve changes, such as raising the wage scale to make it less appealing for U.S. companies to hire foreign workers, or to give priority to highly skilled workers in the H-1B lottery.
“Ultimately the only things I take away so far are that the administration wants to sound tough and ‘muscular’ in rooting out fraud and abuse,” William Stock, president of the American Immigration Lawyers Association, said. “They really want Congress to make changes that, at least for the past 15 years, Congress hasn’t been willing to make.”
Trump, speaking Tuesday at a manufacturing company in Kenosha, Wisconsin, called his order a “historic action” and declared “the policy of our government is to aggressively promote and use American-made goods and to ensure that American labor is hired to do the job.”
Large Silicon Valley companies, like Facebook and Google, often use H-1B visas to fill full-time software engineering and programming jobs. Yet information technology firms, which operate more like staffing agencies, have recently come under scrutiny for alleged abuse and fraud involving lower level technical jobs.
The most high-profile case of H-1B visa abuse concerned Walt Disney Company in Florida, where American tech workers claimed they were forced to train foreign replacements on the H-1B visa program before being laid off. In October, a judge dismissed a lawsuit filed by two workers accusing Disney of conspiring with IT outsourcing companies to circumvent visa regulations.
Priya Alagiri, an immigration lawyer for companies in the Bay Area, said the vast majority of H-1B visas are used by tech companies who cannot find qualified workers at home, even though they try. “The H-1B program is an arduous, expensive undertaking,” she said. “Companies don’t go out of their way to choose a foreign worker.”
A typical H-1B visa can cost up to $3,700 in U.S. immigration filing fees, on top of legal fees. It can take months to get a new visa processed, as well as copious evidence demonstrating why the company needs to hire the particular worker. Legally, companies must pay H-1B visa holders the same wage an American would be paid in the equivalent position.
Alagiri predicted some big companies would simply leave the United States or outsource more jobs if Congress follows through with the plans outlined in the order. “These companies are not going to hire U.S. workers, they are going to move these jobs overseas,” she said.
Trump has used visa programs to fill jobs at his Mar-a-Lago resort with foreign workers in the past, often under a different visa program for lower skilled workers. A New York Times investigation found the resort pursued more than 500 visas for foreign workers since 2010, while domestic applicants were rejected from the same jobs.
Todd Schulte, the president of FWD.us, a bipartisan immigration policy group led by Facebook CEO Mark Zuckerberg, said many companies agree the H-1B program needs changes, but such reforms should be “targeted” at increasing the wage floor to ensure foreign workers are not a cheaper option, and cracking down on companies that abuse the H-1B program for low-skilled outsourcing.
Meanwhile, moves to broaden Buy America measures threaten to rile America’s trading partners. Canada, China, the European Union, and Japan have long criticized such measures as barriers to trade even though these countries have similar rules in place. An agreement the United States struck with 42 other World Trade Organization members on access to government contracts may constrain how much the administration can prod other countries to open their procurement further.
A senior administration official, in a background briefing with reporters Monday, indicated the administration wasn’t planning to scrap or rework the agreement for now. The order “takes a measured approach to this problem by not immediately rescinding these agreements or calling for their renegotiation,” the official said.
The new executive order also aims to strengthen the enforcement of Buy America measures at the bureaucratic level by requiring each federal agency to carry out a review of how it complies with the rules. The Commerce Secretary would furnish a report to the president summarizing the findings.
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