Returning to his campaign pledge to protect American workers, President Trump signed an executive order on Tuesday that could reduce the supply of entry-level foreign workers that many companies say they need to fill technical jobs.
Employers and immigration experts reacted warily to Trump’s order, praising some efforts at overhauling the technology industry’s favorite guest-worker program while worrying that the administration’s reforms could harm employers that use it fairly.
Trump’s action directs four federal agencies to propose reforms to the H-1B visa program, which lets employers hire skilled overseas workers to fill jobs in the United States. It also underscores previously announced plans by federal officials to crack down on abuse and fraud in the system.
The goal, Trump said, is to ensure that American workers aren’t supplanted by cheaper foreign labor, a common criticism of the H-1B program. Federal records show those visas are most often sought for workers from India, between the ages of 25 and 34, to fill jobs in the tech industry. The White House said that about 80 percent of H-1B workers are paid below the median wage in their industries.
“We are sending a powerful signal to the world: We’re going to defend our workers, protect our jobs, and finally put America first,” Trump said in a speech at Snap-on Inc., a Wisconsin toolmaker. “American workers have long called for reforms to end these visa abuses, and today their calls are being answered.”
But supporters of the program said they also would like Congress to lift the annual cap of 85,000 on H-1B visas, which has been higher in the past but was reduced to its current level in 2004.
“I’d hope that the further review of the system will lead to an increase in the number of such visas, as the demand is exponentially higher than the government-imposed limit,” said Christopher R. Anderson, president of the Massachusetts High Technology Council.
Trump’s executive order on H-1B visas follows a big legislative defeat in health care and legal setbacks on the administration’s proposed bans on some foreign travelers.
Overhauling the H-1B program could be an area of bipartisan agreement, with bills sponsored by lawmakers from both parties also proposing changes to the visas.
Trump’s order also directs federal agencies to maximize the amount of American goods they buy and minimize the use of waivers to skirt existing “buy American” rules.
Technology companies prize the H-1B visa program because it lets fast-growing employers fill jobs that they say can’t be satisfied by domestic workers. Critics of the program, however, say there is ample evidence of an untapped US workforce that could fill those jobs with better training, higher wages, or more welcoming work practices.
“The White House action should have a quite significant effect, both direct and indirect,” said Hal Salzman, a Rutgers University professor who has studied the H-1B program. “They’re signaling that they’re serious about reform in the system and addressing the abuse.”
Instead, officials said, the administration would like to institute a program that more heavily favors experienced, higher-paid foreign workers. Taking that step could reduce the number of American workers displaced by less-experienced guest workers who are paid lower wages, officials said. The details of how that program might work were not disclosed Tuesday.
“Right now, H-1B visas are awarded in a totally random lottery, and that’s wrong,” Trump said. “They should be given to the most skilled and highest-paid applicants and they should never, ever be used to replace American workers.”
Some tech employers and corporate immigration lawyers welcomed the idea of ending the lottery, which critics say can be gamed by outsourcing firms that flood the system with applications to increase their odds of winning a spot. In a 2014 study, the Boston Federal Reserve found that outsourcing companies made 13 percent of the H-1B visa requests in New England between 2010 to 2012, higher than the national rate.
“I do agree that the random lottery is just a bizarre situation,” said Punam Singh Rogers, an immigration and labor attorney at Foley Hoag in Boston. “It’s hard to explain that to clients without throwing your hands up and saying, ‘I’m sorry, this is just the crazy way this government does it.’ ”
As a candidate, Trump said he would “end forever the use of the H-1B as a cheap labor program.” This spring, as employers were sending in thousands of applications for the limited visas, officials from the departments of Labor, Justice, and Homeland Security announced plans to more aggressively target abuse by employers.
As a result, immigration lawyers have been advising corporate clients to make sure that their H-1B paperwork is in order and to give extra management attention to their foreign-labor applications, including the wages they’re paying overseas workers. Tuesday’s order just reinforces that guidance, lawyers said.
“The very low-level, junior positions that employers may be using H-1Bs for may be at risk,” said Elizabeth Espίn Stern, who leads the employment immigration practice at Mayer Brown in Washington. “But it also means employers can be at risk if they’re not reviewing how competitive the salaries are for their foreign workers.”
Trump’s attention to the H-1B system may already be dampening employer enthusiasm for the visas. This week, the government said it received 199,000 petitions for H-1B visas during the upcoming federal fiscal year, down from more than 236,000 last year and about 233,000 in 2015.
But Courtney H. New, who leads the global immigration practice at Nixon Peabody in Boston, said companies may simply be fed up with the long odds of getting a visa in the first place.
“There are employers out there who did try for multiple years, and they were unsuccessful,” she said. “I think there’s just a lot less appetite.”Curt Woodward can be reached at email@example.com. Follow him on Twitter @curtwoodward.