Trump makes it more expensive for U.S. companies to hire H-1B visa holders over American workers

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The Trump administration has overhauled the H-1B visa program in a way that will require U.S. companies to pay foreign workers more in a bid to get them to hire equally skilled Americans instead.

The plan, which was announced Tuesday, will require U.S. companies to significantly bolster wages for any H-1B visa holder, the Daily Mail reported.

Crafted by the Department of Homeland Security and the Labor Department, the new rules, which affect who can obtain the visas and how much they must be paid, will be released soon as a means of restricting the H-1B program.

Ken Cuccinelli, the acting deputy secretary for DHS, said officials estimate about one-third of H-1B applicants will be denied under the new rules, which will also restrict the number of occupational specialties open to foreign workers.

Officials with both agencies said the new rules were an important tool amid millions of job losses in the U.S. which were caused by shutdown policies in response to the COVID-19 pandemic.

The rules are also reflective of the Trump administration’s efforts to cut both legal and illegal immigration, which is part of the president’s broad focus on putting American workers and companies ahead of others.

In terms of wages, the new rules will contain a requirement that U.S. firms must pay higher prevailing wages to foreign workers, which is linked to helping the job market overall improve as more regions recover from the pandemic and reopen their economies, according to Deputy Secretary of Labor Patrick Pizzella.

“With millions of Americans looking for work, as the economy continues its recovery, immediate action is needed to guard against the risk lower-cost foreign labor can pose to the well-being of US workers,” he said.

The H-1B program was created by President George H. W. Bush in response to American companies’ needs for specialized workers especially as the tech sector began to ramp up. A lot of companies insist they still need the visa program to fill jobs in the U.S.

But Cuccinelli and Pizzelli say that the program has been abused by American companies who utilize cheaper H-1B participants to supplant U.S. workers who have the same skills.

“U.S. workers are being ousted from good-paying, middle-class jobs and replaced with non-U.S. workers,” Pizzella said. “It has also caused US wages in some instances to stagnate. That is wrong.”

Included in the new rules is a provision that significantly limits “offsite” companies that bring in scores of H-1B visa holders only to farm out those workers to other firms for a fee. That, officials say, is a loophole in the program that has long been subjected to abuses and fraud.

In addition, Cucinelli said, the rules include additional workplace inspections and more oversight of the program.

Up to 85,000 H-1B visas per year can be issued in a number of fields including technology, health care, and life sciences.

Normally, the visas are issued for an initial three-year period but they can be renewed. Workers from China and India make up the majority of an estimated 500,000 visa holders currently in the U.S.

The Labor Department rules will take effect immediately after they are published in the Federal Register. Those that come under DHS, however, will not take effect until after a required public comment period.

In June, as job losses due to pandemic-related business closures and other work slowdowns peaked, the Trump administration announced it would consider suspending the H-1B visa program to allow Americans an opportunity to fill positions.

Jon Dougherty

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