Trump’s Hire American Order Could Be Good for Employers

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By Laura D. Francis

President Donald Trump’s latest immigration-related executive order could be a boon for most employers.

The “Buy American and Hire American” order, signed April 18, calls on the heads of various agencies to ensure that temporary visas for skilled workers are awarded to “the most-skilled or highest-paid petition beneficiaries.” H-1B visas currently are handed out according to the results of a random lottery.

“Right now the biggest problem that employers have with the H-1B program is just the lack of H-1Bs,” immigration attorney Sam Adair of Graham Adair in San Jose, Calif., told Bloomberg BNA April 19. “If we’re able to take a significant chunk of the H-1B applications out of that process,” it will be “much more palatable,” he said.

The order appears to take aim at the information technology consulting industry, which historically has dominated H-1B petitions and used the visas for lower-paid, entry-level positions. Other companies wind up getting left out, as the number of petitions filed has far exceeded the number of visas available.

“Everything about this should be done to bring H-1Bs back to the original intent,” which is to provide a temporary solution when employers can’t find a U.S. worker to fill a high-skilled position, Roy Beck, president of NumbersUSA, told Bloomberg BNA April 19. The regulations and policies stemming from the executive order are likely to ensure that companies that really need H-1B visas are able to get them, regardless of the cap, he said.

Could Cap Be Left Alone?

If the program is whittled down to those employers that really and truly need foreign workers, then the annual cap of 85,000 visas won’t even be hit, said Beck, whose organization supports lower levels of immigration.

The cap was raised to 195,000 between 2001 and 2003 but was never reached during those years, Adair said. Applications rose again once the cap reverted to 65,000 in 2004--with an additional 20,000 for workers with master’s degrees--but tanked again in 2009 during the recession. It wasn’t until 2013 when the cap was reached during the first week employers could apply, he said.

The current 85,000 cap looks like it may be “just shy” of what employers that aren’t IT consultants need, but not by much, Adair said.

And it looks like IT consultants already are scaling back on their applications, he said.

U.S. Citizenship and Immigration Services announced that it received 199,000 H-1B applications this year, a drop from the 236,000 received in 2016. But Adair’s clients--which aren’t IT consultants--reported a 10 percent to 15 percent increase in H-1B demand.

It could be that the IT consultants are being driven away by the added cost of the H-1B program, he said. Companies that employ higher levels of H-1B workers have to pay an additional fee as well as the regular filing fees. They also could’ve been spooked by “general uncertainty” about the direction of the program, he said.

IT Consultants a Small Portion

But the Indian IT consulting companies that are the target of attacks on the H-1B program are just a drop in the bucket, Stuart Anderson, executive director of the National Foundation for American Policy, told Bloomberg BNA April 19.

The seven Indian IT consulting companies with the largest number of H-1B petitions received only 14,610 H-1B visas in 2015, or 17 percent of the 85,000 total, according to research from NFAP, an Arlington, Va.-based think tank. That number represented only 13 percent of all H-1Bs issued for new employment that year, counting visas not subject to the cap.

“The number is so low relative to demand,” Anderson said.

The executive order is just a starting point for a wave of regulations and policy changes, Beck said. The order “doesn’t change anything” but “says we’re moving forward,” he said.

“It’s going to change things dramatically starting next year,” Beck said. “Indications are” that “business as usual is over,” he said.

Salaries “will go way up” because instead of a lottery, the H-1B program will become more like an auction with the highest bidder on salary winning the visa, Beck said. It’s also likely that the program will incorporate a salary floor, so that companies won’t even be able to apply at all if they don’t offer a certain salary level, he said.

Problems With Salary Preference

But basing H-1B allocation on salary comes with its own set of complications, Anderson said.

For one, smaller employers are likely to lose out in a salary war because they simply can’t afford to pay their workers above a certain level, he said. And those companies that can afford the higher salaries may wind up paying their H-1B workers more than similarly situated U.S. workers just to get the visas--which could result in discrimination charges, he said.

“This is part of an overall philosophy to discourage international students from deciding that this is a great place to come and work,” Anderson said. “H-1B is still the only practical way for someone to work long-term in the U.S.,” and if graduating international students can’t get a visa because the visas are no longer available for entry-level positions, those students are going to go elsewhere to work, he said.

The higher salaries are naturally going to be offered to workers with more experience, Anderson said. “You’re going to actually eliminate a lot of international students” from the H-1B program, he said.

‘Cautiously Optimistic’

But Adair said he’s “cautiously optimistic” that the order will wind up benefiting those companies that only seek one or two H-1B visas per year to fill specific skills gaps.

About 17,000 out of 26,000 employers that hired an H-1B worker in 2015 hired only one worker, according to NFAP.

The order could have added “a bunch of extra requirements to the process” that would’ve made it too costly and burdensome, but it didn’t, Adair said. “For many U.S. employers that use the H-1B, it’s not something that they do because it’s less expensive than hiring a U.S. worker,” he said.

At the same time, the order doesn’t have “enough specifics to have any real sense of what we need to be concerned about and looking for,” Adair said.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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