On Wednesday, the Trump administration announced a rule that will likely curb US companies’ use of skilled foreign workers, particularly in the tech industry, which officials said was necessary to protect American jobs amid mass unemployment triggered by the corona virus pandemic.
The joint rule from the US Department of Labour and the Department of Homeland Security will significantly increase the minimum wage companies must pay to workers enrolled in the H -1B visa program. It also will narrow the definition of “specifically occupations” eligible for H – 1B visas.
The rule is going to come in effect in early December, is likely to face criticism from trade groups such as the US Chamber of Commerce, who say the H -1B program is necessary because of a shortage of skilled American workers. More than two-thirds of H – 1B visa holders come from India, and they are disproportionately employed by tech firms, according to government statistics.
Acting director of Homeland Security, Kenneth Cuccinelli, said in a call with reporters on Wednesday that the new rule was largely designed to deny visas to third-party contractors who provide workers to US companies. He said the contractor exploit loopholes in existing regulations allowing them to pay h – 1B holders far less than their American counterparts.
Cuccinelli said, “Companies have been incentivized to avoid hiring Americans or even lay off their own qualified, better-paid American workers and replace them with cheaper foreign labour.”
President Donald Trump in June banned H -1B workers and some other visa holders from entering the US through the end of the year, citing the economic crisis caused by the pandemic.
The Chamber and other business groups have sued the administration over the entry ban, saying it has created unnecessary hurdles for employers.
The H – 1B program was created under President George HW Bush to help companies fill specialized jobs as the tech sector began to boom and it was harder to find qualified workers. Many companies insist they still need the program to fill critical positions.
Critics include labour advocates as well as people who seek limits on legal immigration. But supporters argue that H -1B holders fill critical needs and don’t necessarily take jobs from Americans, but rather help expand the economy and create more opportunity.
The US can issue up to 85,000 H – 1B visas per year in technology, life sciences, health care, and other sectors. They are typically issued for an initial period of three years and can be renewed.
Officials said the Department of Labour rules would take effect immediately after publication in the federal register later this week while those that fall under the Department of Homeland Security would be adopted after a public comment period.