According to a briefing by two senior White House officials Monday, The “Hire American” part specifically directs federal agencies to “crack down on fraud and abuse” in the immigration system. It also calls for the Departments of Labor, Justice, Homeland Security, and State to suggest reforms to the H-1B visa program for foreign workers.
The move comes after Trump, as a candidate, paraded laid-off IT workers onstage and called for the end of the H-1B visa program. He at first said the visas “decimate” American workers and depress U.S. wages, but later seemed to flip-flop on the issue. The government opened up applications for H-1B visas earlier this month, with allocations for 85,000 visas untouched by Trump.
What’s an H-1B visa?
The visa allows companies to temporarily hire foreign workers in specialty occupations including fields like science, engineering, and information technology. Workers are usually required to have highly specialized knowledge and a bachelor’s degree or higher in the specialty or its equivalent. The visas last for three years at a time.
They’re widely used in Silicon Valley, whose largest employers include outsourcing firms like Tata, Infosys, and Cognizant. According to Bloomberg, these companies tend to pay H-1B workers $65,000 to $75,000 a year, far less than the $100,000 or more at Google and Microsoft. Nearly 70% of all H-1B visas go to Indian workers.
Each year, a total of 85,000 H-1B visas are granted to foreign workers, with 20,000 earmarked for those with master’s degrees or higher. The visas are distributed through a random lottery.
Demand for the visas is so high, the U.S. government often reaches its cap within mere days of opening up the application window. This year, the New York Times documented how applications arrived by the truckload. The U.S. Citizenship and Immigration Services met its cap on visas within just four days.
How will Trump's "Hire American" executive order change the program?
In short, it won't ... at least not yet. The president’s “Buy American, Hire American” executive order is not expected to change the H-1B program immediately, but it does direct four federal agencies to propose reforms.
A senior administration official, who briefed reporters on the directive Monday, said the goal is to eventually switch away from a random lottery system for H-1B visas, which is weighted toward low-wage workers, toward a system that favors higher-skilled, higher-paid workers, like those with master’s degrees.
“You're creating an entirely new structure for awarding these visas. I mean, it is a completely -- it is a total transformation of the H-1B program,” he said.
Other possible reforms include raising fees for the visas.
The White House official also noted that ultimately, agencies will have to follow the official rulemaking process, or legislative action will be required to change the program.Although Congress did introduce an H-1B reform bill in January, it has sat untouched in an immigration subcommittee since Jan. 13.
Trump Signs Order That Could Lead to Curbs on Foreign Workers
KENOSHA, Wis. — President Trump, hammering his “America First” campaign theme, signed an order on Tuesday that he said would favor American companies for federal contracts and reform the visa program for foreign technical workers.
After recent policy reversals that have angered his populist base, Mr. Trump described the visa program as an initiative gone awry that has driven down wages for Americans. The order was a means to end the “theft of American prosperity,” which he said had been brought on by low-wage immigrant labor.
Yet the order calls for a series of relatively modest steps, like a multiagency report on changes needed for the H-1B program, under which the government admits 85,000 foreign workers annually, many of them in the high-tech, industrial, medical and science fields. Collectively, the efforts outlined in the order could take years to carry out.
The H1-B program has become a focus in the debate over the impact of foreign workers. Mr. Trump has criticized employers for abusing the program and using it to avoid hiring higher-paid American counterparts. He vowed to revamp its lottery-based selection process.
The order, signed at the sprawling Snap-on tool factory here, represents a small win for bigger tech companies, which have been in pitched battles for those visas. Companies like Google and Microsoft, which rely heavily on high-skilled foreign workers, had worried that President Trump would make drastic curbs to worker programs that could cripple them.
“I think people are cautiously optimistic that this will be O.K., and maybe even better,” said Tom Alberg, a venture capitalist at Madrona Venture Group, a Seattle firm that invests in high-tech start-ups.
But the order would likely hurt the biggest users of the visa program, technology outsourcing firms that bring foreign workers to the United States to perform technical jobs, typically from India.
On the campaign trail, Mr. Trump stoked outrage from his supporters with accounts of companies like Walt Disney forcing laid-off technical workers to train their overseas replacements.
On Tuesday, Mr. Trump spoke in terms of an apple-pie populism that helped him pull off upset victories in November in Midwestern states like Wisconsin.
H-1B visas “should include only the most skilled and highest-paid applicants and should never, ever be used to replace American workers,” Mr. Trump told a gathering of about 500 workers and local luminaries, including the White House chief of staff, Reince Priebus, who hails from Kenosha.
On this point, many executives at American technology companies agree with Mr. Trump. They argue that they mostly apply for H-1Bs for workers when they can’t find qualified American workers, usually those with advanced degrees like a masters or Ph.D.
In recent years, there has been so much demand for H-1B visas that the whole fiscal year’s allocation has run out in a few days in April, when applications are accepted. The visas are then awarded by lottery to qualified applicants. Some 600,000 to 900,000 immigrants are currently in the United States on H-1B visas, researchers estimate.
Outsourcing firms — the top 13 of which accounted for a third of all granted visas in 2014, the last year for which information is publicly available — typically flood the system with visa applications. The top recipients were Tata Consultancy Services, Infosys and Wipro, all from India.
India’s leading tech trade group, the National Association of Software and Services Companies, said Indian companies were being treated unfairly. “We believe that the current campaign to discredit our sector is driven by persistent myths, such as the ideas that H-1B visa holders are ‘cheap labor’ and ‘train their replacements,’ neither of which is accurate,” the group said in a statement.
Companies like Microsoft, Intel and Amazon are also big recipients. At least 15 percent of the American workforces of Facebook and the chip maker Qualcomm hold H-1Bs, according to the most recent documents the companies have filed with the Labor Department.
The announcement came at a jittery time for the White House, as Mr. Trump faces the 100th day of his presidency without much to show for it in the way of legislative accomplishment, after the defeat of his health care overhaul. And his two high-profile executive orders cracking down on immigration from predominantly Muslim nations have been stymied by the courts.
“This does nothing,” said Senator Charles Schumer of New York, the Democratic leader. “Like all the other executive orders, it’s just words — he’s calling for new studies. It’s not going to fix the problem. It’s not going to create a single job.”
Representative Zoe Lofgren, a California Democrat whose district includes Silicon Valley, said the issue of foreign workers was real, but dismissed the president’s order as poorly targeted and unlikely to achieve its desired result.
“Half of the start-ups in Silicon Valley were created by highly skilled people from other countries,” she said. “I don’t think the president and his staff fully appreciates that fact.”
In a briefing with reporters on Monday, White House officials said the “Buy American and Hire American” order would also overhaul federal procurement practices to increase the selection of products from American companies, especially in the domestic steel industry, which has faced stiff competition from China.
One reform advocated by the Trump administration, which has drawn bipartisan support from Congress, would change the lottery system for awarding H-1B visas, giving extra preference to the highest-paying jobs — a proposal favored by many in the American technology industry.
Representatives from Microsoft, Apple, Facebook, Amazon and Google either declined to comment or didn’t respond to requests for comment.
Blake Irving, the chief executive of domain name and web hosting firm GoDaddy, said he supported the idea of changing the system for issuing H-1Bs to give priority to higher-skilled workers. He said GoDaddy typically receives only about 20 percent of the H-1B visas it applies for.
“If anything, it moves the policy towards something that’s preferential to the expert work force,” said Mr. Irving. “Anything that gets us closer to that is goodness.”
But some smaller technology companies said they were concerned about the changes proposed by the Trump administration.
Punit Soni, the chief executive of Learning Motors, a six-person company in Silicon Valley that is trying to apply artificial intelligence to health care, said the visa changes proposed by the Trump administration would hurt start-ups.
Small companies cannot afford to pay high salaries and are already struggling to attract talent in a tight market, he said. A visa system that favors the highest-paid workers will steer immigrants only to already successful big companies like Google, his former employer.
“We’re a small start-up. Everyone is getting way below-market average salary,” he said.
Trump takes first step toward H-1B reform
President Trump has set the wheels in motion for H-1B visa reform.
On Tuesday, Trump signed an executive order that directed federal agencies to implement a "Buy American, Hire American" strategy. The order included a section geared at immigration reform.
The order tasked four department heads (including the Secretary of Labor, who has yet to be confirmed) to suggest reforms to ensure H-1B visas are given to the "most-skilled or highest paid" petitioners. Additionally, it asked them to propose new rules and guidance for preventing fraud and abuse of work visas.
Trump made it clear that he doesn't agree with the fact that H-1Bs are currently doled out under a lottery system.
"Right now, H-1B visas are awarded in a totally random lottery -- and that's wrong," he said on Tuesday in Wisconsin, where he signed the order.
There's an annual quota of 85,000 new H-1B visas (with 20,000 reserved for master's degree holders). Applications opened on April 3 and closed five days later. It was the fifth consecutive year that the cap was met within five days. This year, 199,000 applications were received.
It's unclear what exactly the four department heads (State, Justice, Labor and Homeland Security) will be able to accomplish administratively and what will need to be done through congressional legislation.
"Although released with ceremonial flair, the order will have no immediate impact on H-1Bs," Betsy Lawrence, the director of government relations for the American Immigration Lawyers Association, told CNNTech. "Many of the 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."
There have been several bills introduced in recent months to reform the H-1B visa system, including a bipartisan bill from Senators Chuck Grassley and Dick Durbin who have been pushing to revamp the program for years. Their bill proposed eliminating the lottery in favor of a "preference system" so that foreign students educated in the U.S. would get priority. It would give a "leg up" to advanced degree holders, those being paid a high wage and those with valuable skills.
This proposal aligns with Trump's H-1B rhetoric.
"I'm grateful that President Trump has taken my suggestions to heart by taking steps today to protect American workers and preserve limited H-1B visas for truly qualified, high-skilled foreign workers," said Grassley in a statement.
H-1B visas are used to fill the U.S. skills gap, but critics, including the Trump administration have voiced concern about abuse of the program. In some cases, outsourcing firms flood the system with applicants, obtaining visas for foreign workers and then contracting them out to tech companies. American jobs are sometimes replaced in the process.
Attorney Sara Blackwell, who advocates for American workers replaced by foreigner visa holders, said she's "hopeful."
"I'm glad President Trump is acknowledging the serious problem."
Unlike the draft executive order leaked in January, the order signed Tuesday did not set out deadlines, although it did ask for proposals "as soon as practicable."
"I'm not worried immediately about my clients -- but I am worried about what's to come," Tahmina Watson, of Watson Immigration Law, said.