Trump Administration Announces Overhaul of H-1B Visa Program

The Trump administration announced significant changes on Tuesday to the H-1B visa program for high-skilled workers, substantially raising the wages that U.S. companies must pay foreign hires and narrowing eligibility criteria for applicants.

The new rules are expected to reduce the pool of skilled labor and raise costs for tech companies and other employers. Critics say that could force companies to move some operations outside the U.S.

Department of Homeland Security acting deputy secretary Ken Cuccinelli said a third of applicants would be denied under the new rules.

Advocates for skilled immigration attacked the administration’s changes to the H-1B program.

The announced changes involve new rules from both Homeland Security and the U.S. Department of Labor. Homeland Security said its rule, effective 60 days after it’s published in the federal register, would “combat the use of H-1B workers to serve as a low-cost replacement for otherwise qualified American workers.” 

The Homeland Security rule would fulfill a long-running Trump administration promise to revise the definition of which “specialty occupations” are eligible for the visa, according to a draft copy released late Tuesday. Also revised would be definitions of “worksite”, “third-party worksite” and “U.S. employer,” as well as clarifying how the government will determine whether an “employer-employee” relationship exists. Placements of H-1B workers at third-party sites — as staffing companies do — would last a maximum of a year.

The H-1B program has become a flashpoint in America’s immigration debate. Major tech firms employ foreign workers directly through the program, and also via staffing companies and outsourcers. The tech industry has pushed to expand the annual 85,000 cap on new visas, while critics have pointed to reported abuses and argue that the visa is used to supplant U.S. workers, drive down wages and facilitate outsourcing.

Research by Daniel Costa, of the left-leaning Economic Policy Institute, and Howard University political science professor Ron Hira, found that 60% of H-1B workers receive lower-than-average wages for their job and region, and that major tech companies pay some H-1B workers less than local median wages.

The Trump administration has targeted use of the visa by staffing and outsourcing firms, dramatically increasing denials. The administration, which has long promised to change the H-1B program, is pushing the rules ahead without the typical public-comment period, the agency said.

The Labor Department’s draft rule suggests visa approvals will require specific degrees for job types. If that change is made, it could lead to qualified applications being rejected. Some would also need to show how their studies provided “a body of highly specialized knowledge” for a potential job in the United States.

The changes will be published this week as interim final rules, meaning that the agency believes it has “good cause” to claim exemption from the normal requirement to obtain feedback from the public before completing them.

Immigration lawyers and experts predicted that the changes would be swiftly challenged in court because they bypassed the normal regulatory process.

The Labor Department rule, which takes effect upon publication, would increase wages across the board for foreign workers, based on surveys of salaries in each profession. Companies would have to pay entry-level workers in the program in the 45th percentile of their profession’s salary rather than the 17th percentile. Wages for higher-skilled workers would rise to the 95th percentile from the 67th percentile.

The Labor Department’s rule, according to a copy released Tuesday, would adjust prevailing wages required for the visa, and take effect Thursday.