Will Trump’s Immigration Audits Help U.S. Workers?

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By Laura D. Francis

Nov. 22 — President-elect Donald Trump provided tidbits of insight into his immigration plans for his first 100 days in office in a short video released Nov. 21.

Those plans so far don’t include his campaign promises of building a wall, deporting several million undocumented immigrants or ending the deferred action for childhood arrivals program.

Instead, Trump is planning on directing the Labor Department to investigate visa program abuse.

The announcement isn’t completely at odds with what Trump has said about putting U.S. workers first.

“His message on immigration closely aligned with his other points in his 100 day plan, which focused on protecting and growing U.S. jobs,” Lynden Melmed of Berry Appleman & Leiden in Washington told Bloomberg BNA Nov. 22.

But will these investigations achieve their goal?

‘All About the Wages.’

DOL investigations are “all about the wages,” David Jones of Fisher & Phillips in Memphis, Tenn., told Bloomberg BNA Nov. 22. In other words, are employers paying foreign workers what the law requires?

This is particularly true in the context of H-1B visas, temporary visas for skilled foreign workers that are popular in the tech industry. The H-1B program requires employers to attest that they’re paying the required wage and that hiring a foreign worker won’t adversely affect U.S. workers’ wages, Jones said.

During his campaign, Trump called for changes to the H-1B program but didn’t mention any specific visas in his video message.

The “vast majority” of employers that rely on foreign workers are complying with the law, Jones said. And “they are not getting cheap labor by doing H-1Bs,” he said. In fact, in many cases, employers wind up paying more for an H-1B worker than a U.S. worker, he said.

For one thing, there are the fees associated with the visa application process, Jones said. But the program also requires employers to pay the H-1B worker either what they pay their U.S. workers or the prevailing wage as determined by the DOL, whichever is higher, he said. A DOL-imposed wage could indeed be more than what other employees are earning, he said.

“Are there bad actors? Of course,” Melmed said. But “this has not, to date, been an area where there have been widespread government penalties” for program violations, he said.

Won’t Stop Outsourcing

The main concern with H-1B visas at the moment is the use of the program in connection with outsourcing, Jones said.

Last year, Southern California Edison and Walt Disney World drew the ire of several lawmakers when they laid off their U.S. information technology workers and contracted out their work to staffing firms that primarily use H-1B workers. The U.S. workers reportedly were required to train their replacements in order to receive a severance package.

It’s one thing for a company to lay off its workforce and directly replace it with H-1B workers, Jones said. But in cases such as these, it’s legal to rely on a staffing firm to perform a function that previously was performed in-house, he said. It just so happens that many of these IT staffing firms rely heavily on H-1B workers, he said.

And those companies very well could be complying with every attestation they make regarding what they pay their workers and other program requirements, he said.

The DOL’s focus should be increased oversight of heavy users of the H-1B program, known as H-1B dependent employers, Jones said. It’s “an incredible waste of resources” to ramp up program audits across the board and will only serve to increase the burden on law-abiding employers that genuinely need foreign workers, he said.

Deterrence Through Enforcement?

Would employers be forced to abandon H-1B visas in favor of U.S. workers because of that burden?

Employers already are being deterred from using the H-1B program because of the limited number of visas available each year, Jones said. In 2016, employers sent in 236,000 petitions for the visas, which are capped at 65,000 per fiscal year, with an additional 20,000 for workers with advanced degrees.

Rather than preferring H-1B workers over U.S. workers, employers “as a natural fact would give preference to U.S. workers,” he said. “For your average company, having to sponsor someone for an H-1B represents a cost,” Jones said. They only resort to the visa program when they really can’t find anyone else, he said.

“I don’t think you’re going to see wholesale abandonment of the H-1B category” as a result of more DOL audits, Melmed said. “Companies already do invest in compliance and are used to a fair amount of oversight of the visa programs,” he said.

Like Jones, Melmed said employers view the H-1B program “as a matter of need.” They invest a lot of money to recruit and hire foreign workers, particularly from U.S. colleges and universities, “and that has to be taken into account,” he said.

Limits on Investigations

And there’s the question of how much Trump, on his own, can require of the DOL.

Under DOL regulations, there are only four scenarios that trigger an investigation by the DOL’s Wage and Hour Division, Melmed said. These include a complaint from an aggrieved person, credible information from a reliable source, the DOL secretary’s finding that there is a willful violation, or the DOL secretary having reasonable cause to believe an employer is violating program rules.

“The president himself cannot order them to open an investigation unless it meets one of those criteria,” Melmed said.

And that doesn’t take into account constraints on agency resources, he said.

But “the more scrutiny there is of the program, the more likely it is that everyone’s going to recognize that Congress needs to both improve access and update the U.S. worker protections,” Melmed said. That includes increasing the H-1B cap and updating the sliding scale of government oversight depending on how heavily an employer uses the program, he said.

Don’t Read Into Omissions

Employers also should be “cautious about concluding that there’s been any change in [Trump’s] overall priorities for immigration reform,” Melmed said. Just because he didn’t mention issues like the border wall or “extreme vetting” during the video doesn’t mean they aren’t still in the works, he said.

“My expectation fully” is that Trump will make good on his promise to eliminate DACA, Jones said. Terminating DACA means immediately pulling some 728,000 people out of the workforce, leveling a big hit on employers, he said.

Because of impacts like that, “I think some of these ideas will be tempered” as the president-elect consults with his advisers, Jones 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

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