Executive Order on Federal Contracting and Hiring Practices

A few days ago, Trump signed an executive order on “Aligning Federal Contracting and Hiring Practices With the Interests of American Workers”. This can impact H1B visa holders so it’s important to be informed about this executive order. What exactly does it say, and how are H1B visa holders being affected by it?

What Does the Executive Order Say?

The executive order that President Trump signed is meant to make those in charge of federal agencies look over federal contracts. According to the order, the agency heads will have to assess the negative way in which hiring foreign workers temporarily affects workers from the U.S. After performing a review, they should correct the situation if needed.

More than that, the Secretaries of Labor and Homeland Security are asked to act within 45 days. They are expected to “protect United States workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites (including third-party job sites), including measures to ensure that all employers of H-1B visa holders, including secondary employers, adhere to the requirements of section 212(n)(1) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(1)).”

Moreover, according to the order, the opportunities of American workers are being decreased when an employer considers temporary foreign labor instead of American jobs.

“It is the policy of the executive branch to create opportunities for United States workers to compete for jobs, including jobs created through Federal contracts.  These opportunities, particularly in regions where the Federal Government remains the largest employer, are especially critical during the economic dislocation caused by the 2019 novel coronavirus (COVID-19) pandemic.” the executive order says. “When employers trade American jobs for temporary foreign labor, for example, it reduces opportunities for United States workers in a manner inconsistent with the role guest-worker programs are meant to play in the Nation’s economy.”

Why Are Federal Agency Hiring Practices Being Reviewed?

One of the reasons the federal agency hiring practices are being reviewed is because apparently, having U.S. workers during the COVID-19 pandemic is very important. As such, the executive order brings up the fact that there should be jobs created for workers of the United States, and this doesn’t exclude the ones the Federal contracts have created. By hiring temporary workers like H1B visa holders, the opportunities for U.S. workers are instantly decreased.

The executive order is also asking the heads of the federal agencies to review things like the negative effect of hiring H1B visa owners as temporary foreign workers. Moreover, they are also asked to review the impact of offshoring and their hiring practices. Afterward, they have to review proposed actions that are meant to help make improvements to the efficiency and economy of the federal government.

The heads of the Executive Department are also required by the order to review the contracts they have offered to contractors or subcontractors back in fiscal years 2018 and 2019. Meanwhile, the Federal Government is asked the same thing, except the fiscal year for them starts in October, which means they have to review contracts from 2017 until 2019 instead.

The aspects that should be taken into consideration during the reviewing process include:

• The Offshoring Impact – The document specifies that it’s necessary to review the offshoring work that subcontractors and contractors have done. It has to be considered whether the offshore work impacted national security in any way, or if U.S. workers were eligible for assistance under the Trade Adjustment Assistance program if offshoring affected them.
• The H1B Worker Use – The executive order also asks for a review of the work subcontractors or contractors have done that involves H1B visa holders working in the U.S. temporarily. Other things that would require a review include the nature of the work the workers have done, as well as if hiring these temporary workers affected the opportunities of U.S. workers in any way. Furthermore, a review should also be made if national security was somehow affected by the employment of temporary foreign workers.

Aside from these things, the EO says that the U.S. Department of Labor and DHS need to take action in order to protect U.S. workers within 45 days from the date the EO was issued.

Apart from that, the heads of each agency are required to submit a report of the review and recommended actions within 120 days from when the executive order was released.

Overall, the message of the EO is that it should be checked whether the H1B LCAs are properly certified. The compliances that an H1B employer has to follow for LCA include:

• Having no strike or lockout in the employment spot
• The wages that H1B are receiving are not too different compared to similar experiences for the same job
• The prevailing wage for the employment area is being met
• Requirements for the LCA are posted at the employment place
• Similar requirements for LCA are followed normally

What Does This Mean for Visa Holders?

As expected, H1B visa holders are affected by this executive order. Here is how the workers are impacted:

1. Federal Agency Practices – The order that President Trump signed only applies to U.S. Federal Agencies. Therefore, if you work as a contractor under an H1B at a federal agency, things may change and you may have a 120-day runaway.
2. H1B Rules Stay the Same – H1B or LCA rules will not be changed, and this is essential to keep in mind. As such, the entire H1B program and approval process will remain the same.
3. 120-day Timeline Outcome – The timeline will be due only after the elections of the United States. So, if Democrats win the election, things may be different.
4. 45 Days for General H1B LCA Practices – According to the executive order, the H1B LCAs are approved depending on the general guidelines. So, it means you can expect the Dept of Labor to do more audits or expect more scrutiny. LCAs may be verified even more by the USCIS too.

Executive Order FAQs

Here are some commonly asked questions about the executive order:

How Does This Executive Order Affect PERM?

For now, there is no impact on PERM made by the executive order. In the entire document, there is no clause that mentions PERM in any way.

Will My H1B Visa Be Denied If I’ve Worked as a Contractor?

It’s not a certainty. In the executive order, it is stated that there should be reviews made, and opinions should be given for actions. Therefore, there will be no actions taken instantly.

Can the President Change H1B Rules with an Executive Order?

Not really. When it comes to the H1B program-related policies, the president isn’t powerful enough to directly change them. Although the program may become stricter, the H1B program fundamentals will stay the same. Something may only be changed when it goes through a regulatory process and Congress, which takes a lot of time.

Conclusion

If you’re an H1B worker for a federal agency, it’s important to know how this new executive order affects you. Hopefully, this article was comprehensive enough that you know what to expect.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

See author's posts