President Biden revoked previous Trump Administration’s “Buy American, Hire American Executive Order (EO)” on Jan 25, 2021 and signed an Executive Order that focuses only on the “Buy American”. This has a big impact on the work visa programs like H1B, L1, Others and DHS & Dept of Labor stance towards the same. In this article, we will review the impact of revoking the “Hire American” part, what it means to the future of H1B, L1 and other work visa programs.
Buy American Hire American EO – H1B, L1 Changes
Previous president Trump signed “Buy American, Hire American Executive Order (EO)” in April 2017. If we exclude the “Buy American” and focus on “Hire American” part in that executive order, it was primarily focused on creating higher wages, more employment opportunities and protecting US workers by reviewing and H1B, L1 and other work visa programs.
As part of the “Buy American, Hire American” executive order below are some of the key changes were implemented by DHS, DOL as directed by previous Trump Administration over the past few years from April 2017.
- Easy reporting, steps to combat fraud of H1B program
- USCIS, Dept of Justice Partnership to Protect US workers, combat fraud
- Expansion of Site Visits for H1B, L1 compliance.
- Increased transparency of H1B program employers with H1B Data Hub
- Comprehensive H1B, L1 data from past & present of employers, occupations, etc.
- L1 Qualifying relationship policy Proxy vote guidance
- Same level of scrutiny for both initial and extension work visa petitions, including H1B
- Affiliate or Subsidiary Definition for determining ACIWA Fee guidance
- H1B, PERM Wage Levels Changes that increases prevailing wage levels
- H1B Lottery to be based on Wage Levels Final Rule
- Cancelled H1B Rules by Courts on Strengthen H1B Program, 1 year H1B approvals.
Due to many of these policies, the H1B denial rates increased significantly from single digit denial rates from FY 2017 to over 20% denial rates in FY 2019 for many IT Outsourcing companies like in below table. H1B denials data is based on H1BGrader.com Companies Data
|H1B Company||FY 2017||FY 2018||FY 2019||FY 2020|
Impact of Buy American, Hire American EO on US Economy
Trump era’s H1B, L1 and other work visa related policies that were put in place based on the “Buy American, Hire American” executive order created a lot of administrative burden for many of the US companies. While many of the policies were primarily aimed at reducing fraud by IT Body shops, they also made it very difficult for general US companies to hire skilled workers. Due to many of these policies in place, the uncertainty of getting US Visa stamping approved for H1B, L1 and work visa also increased during the Trump’s era. All of these collectively resulted in fundamental shifts in US economy.
As per research by Wharton Business School Professor Britta Glennon, many of these anti-immigration policies related to H1B and other work visas indirectly had a huge impact on US economy and sent jobs, innovation, investments and economic growth outside of US. Read her research paper and article on brookings.edu. There are many such studies done by others that tells that due to many of these work visa restrictions, more jobs are created in countries like India, China and Canada. Just the Trump Travel Ban on H1B, L1 visa holders, had an impact on the US Firms with valuations loss of $100 Billion Dollars, based on report by Harvard and Wharton professors.
Biden Revokes Buy American Hire American Executive Order
On January 25th, 2021, Biden revoked the Executive Order “Buy American, Hire American” that was signed by previous president Trump. You can see the new Executive Order signed by Biden that only says “Buy American”, which is aimed at mandating US Govt to buy from US Producers and waivers for any procurement from non-US companies be publicly published on a website so that it is transparent. The EO goal is to setup an office under OMB to carry out this “Buy American” EO. The key thing to note is that there are no new rules related to changes in “immigration policy” that focus on changing the US work visa programs. See below screenshot of the revocation of the previous EO.
Impact of revoke of “Buy American, Hire American” EO to H1B, L1 Programs?
Now that Biden administration has revoked the “Buy American and Hire American” executive order, we are likely to see some changes in the way H1B and L1 programs are operated and enforced. As of now, we do not have the specifics listed out by the respective agencies like DHS, Dept of Justice, ICE and US Dept of Labor.
If you see the DHS webpage for “Buy American and Hire American”, they have listed many policies that were implemented based on the EO. Now that previous EO is revoked, we can see many changes related to
- H1B, L1 Policy enforcements related to fraud and abuse
- Maybe reduced site visits for H1B, L1 programs
- Deference for prior H1B approvals, especially for Extensions.
- Wage Levels Changes for H1B, PERM programs
- Maybe removal of Wage Levels criteria for H1B lottery
- Faster approvals for H1B, L1 Visa petitions due to less policy overhead
- Better H1B, L1 Approval rates with USCIS like prior to FY 2017 rates
- Better Visa Stamping approval rates for H1B, L1, others.
- Less publication of H1B, L1 Data related to employers, roles, etc.
- Changes to L1 Policy for qualifying relationship and proxy votes
We would very likely see news releases or at least changes to the website in the upcoming weeks after the DHS, ICE, and US Dept of Labor takes actions based on the revoke of the previous Executive Order.
Also, we can expect to see many other work visa related immigration changes based on Biden’s immigration plans. Read Biden’s US Citizenship Act of 2021 – H1B, H4 EAD, F1, Green Card Provisions. One key thing to remember is that last year Green Card Per country caps removal Bill HR 1044 that passed in Senate in Dec 2020, had many H1B program related changes to prevent fraud and abuse by IT Outsourcing companies. We may see those provisions added in the Biden’s big immigration bill in Senate by the previous Senators like Chuck Grassley, who are still in office. We need to wait and see.
What do you think of the revoke of the Buy American and Hire American Executive Order ? Share your thoughts in comments.