Labor & Employment Law Daily Trump Administration cracks down on H-1B workers with new Executive Order
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Wednesday, August 5, 2020

Trump Administration cracks down on H-1B workers with new Executive Order

By Pamela Wolf, J.D.

Under a new EO, agency heads must scrutinize federal contractors and subcontractors to ensure compliance and that U.S. workers and the national security have not suffered adverse impacts.

On August 3, President Trump issued an Executive Order (EO) requiring federal agencies that use government contractors to scrutinize contracts awarded in fiscal years 2018 and 2019 to determine whether:

  • Contractors and subcontractors used temporary foreign labor for contracts performed in the United States, and, if so, to determine the nature of the work performed by temporary foreign labor on these contracts; whether opportunities for U.S. workers were affected by this hiring; and any potential effects on the national security caused by this hiring.
  • Contractors and subcontractors performed in foreign countries services that were previously performed in the U.S. and, if so, whether opportunities for U.S. workers were affected by such offshoring; whether affected U.S. workers were eligible for assistance under the Trade Adjustment Assistance program authorized by the Trade Act of 1974; and any potential effects on the national security caused by this offshoring.

Among other things, the EO also directs the Secretaries of Labor and Homeland Security to take action within 45 days to protect U.S. workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites.

TVA outsourcing technology jobs. The EO follows the federally-owned Tennessee Valley Authority’s (TVA) announcement that it will outsource 20 percent of its technology jobs to companies based in foreign countries, a move that the White House says could cause more than 200 highly-skilled American tech workers in Tennessee to lose their jobs to low-wage, foreign workers hired on temporary work visas. The TVA’s decision is also expected to cost the local economy tens of millions of dollars over the next five years.

White House policy. According to the EO, it is the policy of the executive branch to create opportunities for U.S. workers to compete for jobs, including jobs created through federal contracts. These opportunities, particularly in regions where the federal government remains the largest employer, are especially critical during the economic dislocation caused by the COVID-19 pandemic, according to Trump. “When employers trade American jobs for temporary foreign labor, for example, it reduces opportunities for United States workers in a manner inconsistent with the role guest-worker programs are meant to play in the Nation’s economy,” the EO states.

Assessment and compliance review. Each agency head that enters into contracts must assess any negative impact of contractors’ and subcontractors’ temporary foreign labor hiring practices or offshoring practices on the economy and efficiency of federal procurement and on the national security. The EO directs each agency head to propose action, if necessary and as appropriate and consistent with applicable law, to improve the economy and efficiency of federal procurement and protect the national security.

Agency heads also must, in coordination with the Director of the Office of Personnel Management, review the agency’s employment policies to assess compliance with Executive Order 11935 of September 2, 1976, “Citizenship Requirements for Federal Employment,” and Section 704 of the Consolidated Appropriations Act, 2020.

Reporting. The EO further requires each agency head to submit a report within 120 days to the Director of the Office of Management and Budget summarizing the results of the required reviews, recommending, if necessary:

  • Corrective actions that may be taken by the agency and timeframes to implement those actions; and
  • Proposing any Presidential actions that may be appropriate.

Doubling down on H-1B workers. Within 45 days after the issuance of Trump’s latest EO, the Secretaries of Labor and Homeland Security must take action, as appropriate and consistent with applicable law, to protect U.S. workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites (including at third-party job sites), including measures to ensure that all employers of H-1B visa holders, including secondary employers, adhere to the requirements of Section 212(n) (1) of the INA.

DOL-DHS MOU. Notably, on August 3, the Department of Labor also announced the signing of a Memorandum of Understanding (MOU) between the DOL and DHS that establishes processes by which USCIS will refer suspected employer violations within the H-1B program to the DOL that USCIS identifies in the course of adjudicating petitions (a source of information never previously accessed by the DOL for enforcement purposes) and conducting administrative and targeted site visits (See “USCIS to share information on suspected employer H-1B violations with DOL for further investigation,” in this issue of Labor and Employment Law Daily). Using this information, the Labor Secretary, for the first time, will exercise power to personally initiate investigations, which permits “more robust examinations” of employers’ use of H-1B workers than are ordinarily undertaken.

H-1B guidance on the horizon. In a fact sheet about the EO, the White House said that the DOL will also finalize guidance to prevent H-1B employers from moving H-1B workers to other employers’ job sites to displace Americans workers.

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