Earlier this month, we reported on a number of press articles suggesting that the Trump Administration would issue a new Executive Order negatively impacting H-1B workers and their employers. Last week, Forbes and other well-known news outlets published reports on a measure that the White House is purportedly designing to further restrict U.S. companies ability to hire foreign workers. These reports suggest that the Trump Administration may limit new H-1B sponsorship to positions that pay the highest level of prevailing wage, as published by the Department of Labor (DOL), which for many professional positions is well above actual market conditions.
The Forbes article contends that this measure would worsen the unemployment condition in the United States, and further contribute to the loss of more U.S. jobs to other countries. We agree with this assessment, which is also supported by most economists, and a broad range of research organizations and think tanks. A recent article published by the Cato Institute, for example, discusses the impact of imposing further restrictions on H-1B workers on innovation and future job growth.
Press reports like the one in Forbes however may also be causing more undue panic for H-1B workers and their employers. The reported discussions within the White House suggesting that the Administration may impose new prevailing wage requirements are only rumors of new policies that are being considered. As of today, there is no official announcement, or presidential tweet, indicating that such action has or will be taken.
These rumors are also not entirely new. In the past few years, there has been proposed legislation that would have similarly imposed higher prevailing wage requirements on certain kinds of employers – namely software consulting firms that place their employees at third party worksites. Such employers have been a favored target of the USCIS and many lawmakers in Congress from both sides of the aisle, since well before Trump took office. It is unclear from the press reports if the latest rumors are limited to restrictions on consulting companies, or all employers of H-1B workers. The Administration would undoubtedly face immense pressure from the business community if it were to attempt to impose such restrictions on non-consulting companies. As also mentioned in our recent alert, such measures would almost certainly be challenged in Federal Court, as an unconstitutional infringement on Congress’ legislative power and a violation of the Administrative Procedures Act.