President Trump signed an Executive Order today, August 3rd, 2020 that calls for review of Federal Agencies practices on contracting and hiring of temporary workers like H1B Visa. This executive order is an outcome of recent action by Tennessee Valley Authority that planned to outsource 20% of its IT workforce to foreign companies. The goal of the Executive order is to protect American jobs. Let’s look at the background on why and all the details of the executive order.
Background : US Federal Agencies employing H1B Workers
Many of US Federal agencies use temporary work visa holders like H1B visa holders. There are few hundred organizations that are under the umbrella of US Federal Agencies. Trump administration want to make sure all those hundreds of Federal agencies’ organizations hire Americans to help boost US economy & for national security.
To understand the impact, we should review the data of H1B workers at Federal agencies. Below is a graph put up by H1BGrader in their Blog that they have created reports to see the list of Federal agencies and how many are working and what company they work for. Check below links. While the below reports are not fully complete, they give an idea of the impact it could have….
- US Federal Agencies – H1B Contractor Employers – 2020
- US Federal Agencies – H1B Contractor Employers – 2019
Now that we know the impact, let’s look at the Executive Order
Summary of Trump EO – Review Federal Contracting & Hiring Practices
Below are the various topics and actions that are outlined in the Trump Executive order that was signed today.
Guest Worker Visa Policy
The executive order starts off by saying that the executive branch goal is to create jobs for American workers, including the ones that are created by Federal contracts. It says, it is more important to have US Workers hired during the period of COVID-19. Hiring temporary work visa holders like H1B workers by Federal agencies reduces the opportunities for US workers and not consistent with the role of temporary/guest work visa programs (like H1B visa) in bigger US economy context.
Review Contract & Hiring Practices of Federal Agencies Contractors
The executive order asks the head of each of the Executive Department an agency to review all contracts given to direct contractor or subcontractor in Fiscal years 2018, 2019 for the below aspects. For Federal govt, fiscal year starts in October, so the EO is asking to review the contacts from Oct 1st, 2017 until Sept 30th, 2019.
- Use of Temporary Work Visa Holder ( like H1B) : It asks to review, if the contract work done by contractors or subcontracts involved any of the below :
- Temporary work visa holders like H1B Visa to do the work.
- Nature of the work done by such temporary workers
- If the US Workers opportunities were affected by hiring of temporary work visa holder like H1B visa holders.
- If there was any effect on the national security due to the hiring of the temporary workers.
- Impact of Offshoring: The EO asks to review the offshoring work done by contractors and subcontractors and if involved any of the below
- If offshoring of previous work done in US had any impact on the US workers.
- If any US workers were impacted, were they eligible for assistance under Trade Adjustment Assistance program.
- If the work done offshore had any impact on the National security.
You may watch below video too, it covers all of it.
Assess Negative Impacts of Offshoring, Temporary Workers
The executive order ask the heads of each of the federal agencies to review the below
- Negative impacts of hiring temporary foreign workers like H1B holders, their hiring practices or offshoring on the US economy & national security.
- After such review propose actions that can help improve the economy and efficiency of federal govt procurement and protect national security.
US Citizenship Requirements Compliance
The executive order asks head of each federal agency to review the employment policies of their agencies and if they are compliant with the US Citizenship requirement to be hired as a federal govt workers, that was set by executive order 11935
Submit Report in 120 days, Recommended actions
The executive order instructs that within 120 days from the date of today’s order, the head of each agency to submit a report of their review and recommended actions, including possible presidential actions like Executive Orders. If we count 120 days from today, it would be December 1st, 2020 for the report deadline to be submitted to the Office of Management and Budget office.
Measures to Protect US Workers within 45 days
The EO says that within 45 days from the date of Executive order, US Dept of Labor and DHS to take necessary actions as needed to protect US workers as required by the law. It mentions specifically to review H1B workers hired directly or employed at third party work sites are compliant with the requirements of section 212(n) (1) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(1)).
What do these measures to Protect US workers mean ?
Essentially all the order tells is to make sure the H1B LCAs are certified properly. There is no new rule as such, it is just making sure they are compliant. As per the regulation, below are the high-level compliances that H1B employers need to follow for LCA.
- Wages offered to H1B workers is similar to other in same job or similar experience.
- It meets the prevailing wage in that area of employment
- The employer similar working conditions for H1B holder and does not affect similar workers already employed
- There is no lockout or strike in the place of employment
- Posting requirements for the LCA at the place of employment
- Many similar requirements for LCA that are normally followed.
- You can check full H1B LCA regulation info on DOL.gov
Impact for H1B Visa Holders with this new Executive Order
Below is the summary of the impact to H1B visa holders
- No Changes to the H1B Rules: Firstly, it is important to understand that there are NO CHANGES to existing H1B rules or LCA rules. It does not impact the entire H1B program or H1B approvals process with USCIS or any US visa stampings. It is only targeted towards contractors and subcontracts practices in US Federal Agencies employing H1B visa holders.
- Federal Agencies Practices : The executive order signed by Trump is only applicable to US Federal Agencies. There are about 1256 Organizations that are listed under federal agencies. So, those agencies would review all the practices of hiring contact workers on H1B. So, if you are a contractor working on H1B at a US federal agency, you need to be cautious as things may change. You have a runway of 120 days…This will only go forward if Trump wins the election.
- Outcome with 120 days Timeline : Looking at the timeline of 120 days to review and submit report, it will be due by federal agencies after the US elections. So, things may be completely different if Democrats win the election and this may never even become reality.
- General H1B LCA practices – 45 days: The guidance given by EO tells that the H1B LCAs are properly approved based on the general guidelines. What it could mean is that there maybe extra scrutiny or Dept of Labor may do more audits. It also could mean USCIS could verify more on the LCAs. All of these are to ensure that the normal LCAs are approved as per rules and do not put US workers at disadvantage.
- H1B holders currently working at Federal Agencies : If you are working at a Federal Agency as H1B worker, there could be more scrutiny by the agency and they may review and change federal contracts with your employer asking for US Citizens or maybe Green Card holders. Again, we do not know, what they would do. It may or may not happen immediately, but the expectation is that these agencies provide their recommendations and then president will act. So, be prepared for the worst and you can start planning for options to be safe…This may not happen at all, if president Trump does not win election…
No, there is no clause related to PERM process in the Executive Order. There is no impact as of now with this Executive order.
Not necessarily. The current EO gives guidance to review and suggest options. No actions will be taken immediately.
The Executive Order talks about H1B visa in context of LCA compliance. So, H1B holders are definitely impacted. On the other hand, temporary work visa holders include many other visas like H2, L, O, P and other visas. We do not know, how they will be impacted at this point.
There are very limited powers that president has to change the H1B program related policies directly. They can make current program more strict with audits, site visits, change the language slightly….But, they cannot change the fundamentals of the H1B program. It has to go through regulatory process and Congress. This process can take long….
What do you think of the Executive order by Trump ?