A new executive order directs federal agencies to weigh whether H-1B sponsors have conducted or plan to conduct layoffs of U.S. workers when adjudicating visa petitions, focusing enforcement efforts on potential links between workforce reduction decisions and an employer’s use of skilled foreign labor.
Why it matters: For the first time, recent RIF activity can impact an employer’s H-1B use eligibility. In general, employers that use H-1B visas can expect the administration to closely scrutinize layoffs for potential investigation and enforcement actions.
The executive order: The administration cites “large-scale, systematic abuse of the H-1B program to obtain non-qualifying foreign labor” by employers that places “downward pressure on domestic pay.” The order also alleges that employers lay off “large numbers of highly skilled American workers, only to promptly hire large numbers of H-1B workers who are often lower-skilled and lower-paid.”
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To remedy this alleged abuse, the order requires federal agencies to coordinate reviews of H-1B petitions to determine “whether the employer sponsor directly or indirectly engaged in layoffs within the previous year or plans future layoffs that negatively affect the employment of similarly situated United States workers.”
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Eligibility could be restricted or denied based on RIF activity.
Legal uncertainty: While the Immigration and Nationality Act already creates additional obligations for employers sponsoring green cards if they have recently conducted layoffs, these obligations generally do not apply for H-1B visas (unless the company uses them for more than 15% of their workforce).
Moreover, the INA does not actually prohibit employers from using foreign talent if they have conducted recent layoffs. For both reasons, the administration may face legal challenge if it tries to use this executive order to bar employers from using H-1B visas if they have recent RIF activity.
The bottom line: The administration will treat any substantial use of foreign talent as inherently suspicious and “anti-American.” Employers using high levels of foreign workers can expect potential investigative scrutiny from DHS, DOJ, EEOC, and DOL—each agency has their own enforcement initiative tied to high-skilled foreign talent. Recent RIF activity will make that target even bigger.
