Looking Behind the Buy/Hire American Executive Order

Our firm’s recent client alert, “New Executive Order Calls for H-1B Reforms and Increased Enforcement,” provided an analysis of the H-1B provisions of President Trump’s April 18, 2017, executive order that is entitled “Buy American and Hire American.” The truth is, though, that the order itself says surprisingly little, and certainly, nothing that we did not already expect.

 

The order includes two directives related to immigration. First, the order directs the Departments of Labor, Homeland Security, Justice and State to “propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system.”

 

Second, the order directs those same agencies, “as soon as practicable, [to] suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”

 

These are simply statements of general policy objectives—directives to the heads of the relevant federal agencies to get the ball rolling in terms of creating new policy guidance and drafting new proposed regulatory changes.

 

Nonetheless, the Administration has given plenty of hints about what it hopes to do with respect to the H‑1B program. In a leaked draft of an executive order on “foreign worker visa programs” that was never issued, federal agencies were ordered to study the impact of employment-based immigration on U.S. jobs and wages, including reports on whether the H-1B program causes injury to U.S. workers.  The never-released draft order also indicated an intention to revive the Benefits Fraud Assessment program, under which the agency reviews specific immigration programs to determine whether there is fraud.  While it is difficult to gauge the relevance of this draft at this point, these two points in particular—protecting U.S. jobs and wages, and combating perceived fraud and abuse—are still very much on the Administration’s radar.

 

More recently, the Departments of Labor, Homeland Security and Justice announced an array of H-1B compliance initiatives and greater interagency coordination of enforcement efforts against organizations alleged to have violated H-1B program rules. At the same time, USCIS issued new guidance suggesting that the position of computer programmer does not always require a Bachelor’s degree and is thus not generally a specialty occupation qualifying the beneficiary for H-1B status.  

 

The night before the “Buy American and Hire American” order was signed, senior administration officials held a background briefing for the press in which they made clear that the immigration agencies are looking into charging higher H-1B filing fees, adjusting the prevailing wage scale, changing the H-1B random selection (lottery) system so as to prioritize petitions for persons holding Master’s degrees or earning higher wages, and finding new ways to root out perceived fraud and abuse in the H-1B program.

 

Finally, in a speech he made before signing the order at the headquarters of a tool manufacturing company, Snap-On, in Wisconsin, President Trump said he was “taking the first steps to set in motion a long overdue reform of H-1B visas.”

 

The consistent emphasis on reforming the H-1B program in such a way that more visas go to highly paid and highly educated foreign workers raises some interesting questions. How, exactly, will the limited numbers of available H-1B visas be allocated? How will any changes affect the current users of H-1B visas?

 

Many of the Administration's plans will require agency rulemaking or legislation in Congress. In fact, there are several bills now pending in Congress that propose new priority systems for H‑1B visa allocation. For example, H.R. 670, the High-Skilled Integrity and Fairness Act of 2017, sponsored by Rep. Zoe Lofgren (D-CA), would, among other things, create a three-tiered prevailing wage system and a wage-based allocation of H-1B visas. Another bill, S. 180, the H‑1B and L-1 Visa Reform Act of 2017, sponsored by Sen. Charles Grassley (R-IA), would create a new H-1B allocation system; impose significant new obligations and limitations on H-1B and L-1 employers; and toughen eligibility criteria for H-1B and L-1 visas. Sen. Orrin Hatch (R-UT) is set to unveil a bill that would take a different approach, including capping the numbers of H-1B visas for which any single employer could apply, implementing multiple waves of lotteries to determine which H-1B petitions are selected for adjudication, and requiring employers seeking to hire H-1B workers to attest that they had first sought to fill the job with a U.S. worker but were unsuccessful.

 

While legislative and regulatory changes will take some time, employers are likely to see an imminent increase in worksite inspections and can expect more restrictive adjudication of H-1B petitions by USCIS. In the long term, the H-1B program as we currently know it is likely to look significantly different. In the meantime, employers should conduct their own “spot audits” of LCA files, ensure that their H-1B program is in compliance with the amended petition requirement under Matter of Simeio, and prepare employees and managers for unscheduled site visits.