How Does President Trump’s New Executive Order Affect H-1B Visas?

On August 3, 2020, a Tennessee Valley Authority action prompted President Trump to issue an Executive Order that cracks down on H-1B visas by requiring federal agencies that use government contractors to scrutinize contracts awarded in fiscal years 2018 and 2019 to determine whether:

  • Contractors and subcontractors used temporary foreign labor for contracts performed in the United States, and, if so, to determine the nature of the work performed by temporary foreign labor on these contracts; whether opportunities for U.S. workers were affected by this hiring; and any potential effects on the national security caused by this hiring.
  • Contractors and subcontractors performed in foreign countries services that were previously performed in the U.S. and, if so, whether opportunities for U.S. workers were affected by such offshoring; whether affected U.S. workers were eligible for assistance under the Trade Adjustment Assistance program authorized by the Trade Act of 1974; and any potential effects on the national security caused by this offshoring.

Among other things, the EO also directs the Secretaries of Labor and Homeland Security to take action within 45 days to protect U.S. workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites.

According to the EO, it is the policy of the executive branch to create opportunities for U.S. workers to compete for jobs, including jobs created through federal contracts. These opportunities, particularly in regions where the federal government remains the largest employer, are especially critical during the economic dislocation caused by the COVID-19 pandemic, according to Trump. “When employers trade American jobs for temporary foreign labor, for example, it reduces opportunities for United States workers in a manner inconsistent with the role guest-worker programs are meant to play in the Nation’s economy,” the EO states.

Each agency head that enters into contracts must assess any negative impact of contractors’ and subcontractors’ temporary foreign labor hiring practices or offshoring practices on the economy and efficiency of federal procurement and on national security. The EO directs each agency head to propose action, if necessary and as appropriate and consistent with applicable law, to improve the economy and efficiency of federal procurement and protect national security.

Agency heads also must, in coordination with the Director of the Office of Personnel Management, review the agency’s employment policies to assess compliance with Executive Order 11935 of September 2, 1976, “Citizenship Requirements for Federal Employment,” and Section 704 of the Consolidated Appropriations Act, 2020.

The EO further requires each agency head to submit a report within 120 days to the Director of the Office of Management and Budget summarizing the results of the required reviews, recommending, if necessary:

  • Corrective actions that may be taken by the agency and timeframes to implement those actions; and
  • Proposing any Presidential actions that may be appropriate.

In short, issuing H-1B visas when outsourcing (replacing American workers with foreign workers) is going to have a much higher level of scrutiny under the Department of Labor, the specifics of which will be made clearer in the next few months. If you are someone who uses H-1B visas currently, please take a close look at your documentation as you may soon be required to turn them over.

About the author, Rhamy

Rhamy grew up watching and working with his mother and grandmother in the senior insurance market. This familiarity with the struggles faced by people trying to navigate the incredibly complicated and heavily regulated healthcare market led him to start Poplar Financial while working on his degree at the University of Memphis. After completing his MBA and Bachelors in Finance and Economics, Rhamy guided Poplar Financial through the disruptive opportunity that is the Affordable Care Act. Since then Poplar Financial has received numerous awards from major insurance carriers and has completed its fourth year in a row of doubling in size. Now his team focuses on the processes around human resources and specializes in providing companies with between 20 and 1000 employees with the payroll, benefits, and HR needs.

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