On April 18 2017 President Donald Trump signed an executive order entitled "Buy American, Hire American".

Scrutiny of H-1B programme

In the 'Hire American' part of the order, Trump announced that he was directing the Department of Labour (DOL), the Department of Justice (DOJ), the Department of Homeland Security (DHS) and the Department of State to review the existing laws governing the H-1B programme and suggest changes to prioritise the most skilled and highest paid positions. The president also indicated he was directing federal agencies to review all visa programmes and to take prompt action to crack down on fraud and abuse in order to protect US workers. This follows the notices in memoranda from the DOL, the DOJ and the DHS, which announced that the agencies would impose greater scrutiny on the H-1B programme.

No immediate impact

The executive order will have no immediate impact on H-1B visas. The order makes no concrete changes, but simply articulates a desire to create higher wages and economic rates for US workers and to do so, the executive branch will rigorously enforce immigration laws governing entry to the United States. Rather than listing specific changes, the order states that the secretary of state, the attorney general, the secretary of labour and the secretary of homeland security should propose new rules and guidance to protect the interests of US workers, including preventing fraud or abuse. This is consistent with the three memoranda and announcements issued by the DOJ, the DOL and the DHS in early April announcing that the agencies would be taking a targeted approach to prevent fraud within the H-1B programme. Following the executive order, additional updates are anticipated from these agencies in the near future.

Potential merit-based system

Some bills in Congress have discussed the possibility of a merit-based system for allocating H-1B visas rather than the current lottery. The executive order follows this concept. The order states that:

"In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries."

These types of change to the H-1B programme contemplated by the administration would require legislative action or rulemaking and it would take time to go through the necessary processes.

Impact on outsourcing companies

The potential outcomes of the order could hurt outsourcing companies, most of which are based in India. These companies file the most visa applications. If the H-1B process moves away from a lottery-based system to a process where visas are awarded based on who pays the highest salary or the foreign national's background, it is possible that fewer visas would be accepted from the outsourcing firms and would instead be distributed to other companies.

For further information on this topic please contact Melissa B Winkler at Fakhoury Law Group PC by telephone (+1 248 643 4900) or email (melissa@employmentimmigration.com). The Fakhoury Law Group PC website can be accessed at www.employmentimmigration.com.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.