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Wipro Ltd. employees walked inside the company’s compound during a break at their headquarters in Bangalore, India. Proposed US legislation would require salaries for H-1B visa holders to be doubled to make it harder for companies to replace American workers with those from countries like India.
Wipro Ltd. employees walked inside the company’s compound during a break at their headquarters in Bangalore, India. Proposed US legislation would require salaries for H-1B visa holders to be doubled to make it harder for companies to replace American workers with those from countries like India.Aijaz Rahi/Associated Press/File 2016

Two federal agencies on Monday warned that they’re ready to crack down on businesses that use the controversial H-1B visa program to hire skilled foreign employees at the expense of American workers.

The threats from the Justice Department and the US Citizenship and Immigration Services came at the start of the annual rush to apply for the 85,000 new H-1B visas that will be issued this year. And they fall far short of the sweeping reforms of the H-1B visa system that had been expected by many supporters of President Trump.

“The administration doesn’t want people to notice that they didn’t do anything real,” said H-1B critic Russ Harrison, director of government relations for IEEE-USA, an organization of American tech workers. “The president was pretty clear he was going to do something about H-1B and he didn’t.”

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But Harrison also noted that the new attorney general, Jeff Sessions, was a frequent critic of the H-1B program during his tenure in the US Senate. Sessions often alleged that US technology companies use the program to hire skilled foreign workers at lower wages than they’d have to pay Americans doing the same jobs.

Harrison said that if Sessions acts on Monday’s warning, he could clean up some of the worst abuses.

“This is a really big deal if the DOJ follows through,” he said.

The Justice Department statement said that companies that discriminate in favor of H-1B workers rather than qualified native-born Americans are in violation of the federal Immigration and Nationality Act, which prohibits bias against US citizens in hiring decisions.

“The Justice Department will not tolerate employers misusing the H-1B visa process to discriminate against US workers,” said Acting Assistant Attorney General Tom Wheeler, who vowed to “vigorously prosecute” such cases.

At the same time, US Citizenship and Immigration Services, which processes all applications for visas to enter the United States, said it will intensify investigations of companies suspected of abuse. Since 2009, the agency has conducted on-site inspections of companies that employ H-1B workers. On Monday, US Citizenship and Immigration Services said it will more precisely target companies that have a high percentage of H-1B workers compared to the number of US citizens on the payroll. Also targeted for special scrutiny will be outsourcing companies, many based in India, that hire large numbers of H-1B workers, who perform contract work for other businesses.

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Last week, the Trump administration took another step that could signal a harder line on visas. The US Citizenship and Immigration Services issued a memo to offices that process H-1B applications informing them that computer programmers should not be considered eligible for visas unless they hold a bachelor’s degree in that field.

Harrison said the memo is merely a restatement of existing rules.

“The memo doesn’t change policy as far as we can tell,” he said. But immigration attorney Punam Singh Rogers of Foley Hoag in Boston said that the memo, along with the Justice Department and US Citizenship and Immigration Services announcements, is intended to send a message to outsourcing companies which often seek US visas for relatively low-skilled computer programmers.

“This is a subtle change that can have a big impact on the Indian consulting companies,” Rogers said. “It’s essentially telling them that you can’t use that category.”

Instead, she predicted, outsourcing companies would recruit foreign workers with higher-level skills like software engineering. Such workers would be entitled to higher wages than entry-level programmers.

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Each year, 85,000 visas are made available, but US Citizenship and Immigration Services, which processes the applications, receives a far higher number of applications — 236,000 last year, for example. The agency uses a lottery to pick the winners.

Outsourcing companies are the biggest applicants, filing for tens of thousands of applications each year, and winning a large proportion of the visas. Critics claim that many of the workers hired by these companies are farmed out to American firms at wages much lower than a US citizens would receive.

Thomas Hopcroft, president of the Massachusetts Technology Leadership Council, a group made up of the state’s leading technology companies, said that the H-1B program is in need of reform.

“However, it should be done in a deliberative manner, in Congress, and not at the end of the application submission period,” Hopcroft said. Indeed, Hopcroft called for an expansion of the program “to drive increased innovation and economic prosperity in the United States.”

But the H-1B program is intensely unpopular with Trump supporters, who believe that unfair trade and immigration practices have eliminated millions of American jobs. Early on, the administration was expected to issue an executive order making major changes to the program. But a leaked draft of the proposal merely called for a review of the program and contained no specific reforms. And the administration has yet to issue a final version of the order.

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Still, the joint crackdown by the Justice Department and US Citizenship and Immigration Services could get Trump part way to his goal of H-1B reform.

“It’s a new administration now with an attorney general who knows about this stuff,” said Harrison. “So it’s a new ballgame.”


Hiawatha Bray can be reached at hiawatha.bray@globe.com. Follow him on Twitter @GlobeTechLab.