On April 18, 2017, President Donald Trump signed an Executive Order titled, "Buy American, Hire American."1

Enhanced Scrutiny of H-1B Program

In the "Hire American" portion of the order, Trump announced he was directing DOL, DOJ, DHS, and DOS to review the current laws governing the H-1B program and suggest changes to prioritize the most skilled and highest paid positions. The President also indicated he was directing federal agencies to review all visa programs and take prompt action to crack down on fraud and abuse in order to protect U.S. workers. This follows the notices found in memoranda from DOL, DOJ, and DHS where the various agencies announced that they would impose greater scrutiny on the H-1B program.

No Immediate Impact on H-1B Visas

The Executive Order will have no immediate impact on H-1Bs. The Order does not pronounce any concrete changes, but rather simply articulates a desire to create higher wages and economic rates for U.S. workers, and to do so the executive branch will rigorously enforce immigration laws governing entry to the U.S. Again, rather than listing specific changes, the order states that the Secretary of State, Attorney General, Secretary of Labor, and Secretary of Homeland Security should propose new rules and guidance to protect the interests of U.S. workers including preventing fraud or abuse. This is consistent with the three memoranda and announcements which were issued by the Department of Justice2, Department of Labor3, and Department of Homeland Security4 early April announcing that the government agencies would be taking a targeted approach to prevent fraud with the H-1B program. Following the Executive Order, we anticipate additional updates from these agencies in the near future.

Potential Merit Based System Forthcoming

Some Bills in Congress have discussed the possibility of a merit-based system for allocating H-1B visas rather than the current lottery. The Executive Order follows this concept. The order states, "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." These types of changes to the H-1B program contemplated by the Administration would require legislative action or rulemaking and would take time to go through the necessary processes.

Potential Impact on Outsourcing Companies

The potential outcomes of the order could hurt outsourcing companies, most of which are from India. These companies file the most visa applications.5 If the H-1B process moves away from a lottery-based system to a process where visas are awarded based on who pays the highest salary or based on the background of the foreign national, it is possible that fewer visas would be accepted from the outsourcing firms and distributed more to other companies.

Footnotes

1 https://www.whitehouse.gov/the-press-office/2017/04/18/presidential-executive-order-buy-american-and-hire-american

2 https://www.justice.gov/opa/pr/justice-department-cautions-employers-seeking-h-1b-visas-not-discriminate-against-us-workers

3 https://www.dol.gov/newsroom/releases/eta/eta20170404-0

4 https://www.uscis.gov/news/news-releases/putting-american-workers-first-uscis-announces-further-measures-detect-h-1b-visa-fraud-and-abuse

5 https://www.nytimes.com/2017/04/18/us/politics/executive-order-hire-buy-american-h1b-visa-trump.html

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