Earlier this month, President Donald Trump stopped the Tennessee Valley Authority from turning over 200 IT jobs to contractors. They were being replaced by "cheaper, foreign workers brought in from overseas," Trump said. The TVA rescinded the layoff.
Trump also said what he will do next. The administration is "finalizing H-1B regulations so that no American worker is ever replaced again," he said.
The proposed changes are expected to arrive in weeks, and the impact on businesses, including HR and legal departments, may be broad.
The IT industry already has some idea about what to expect. Among the possible changes: A makeover of what constitutes a "specialty occupation," or an occupation eligible for an H-1B visa. The changes could erase some occupations from the list. The ability of IT services firms to place workers at third-party sites could be hurt by some rule changes.
The administration may also curtail the Optional Practical Training (OPT) program, which enables STEM (science, technology, engineering and math) students to work on a student visa for up to three years.
Other possible effects: A bachelor's degree for an H-1B visa may become an absolute requirement. The administration could impose a new round of fees. It could also replace the visa lottery with a visa distribution system based on salaries, according to several industry sources, which would give priority to visa applicants on the basis of pay. A court challenge is expected.
These new rules may effect "how you advise your clients on who they can hire, how they can retain employees, what types of wage needs to be paid," said Sharvari Dalal-Dheini, director of government relations at the American Immigration Lawyers Association. "Are [businesses] going to have to change their hiring processes?"
Where Biden may take the H-1B work visa
With new actions, Trump may be raising the profile of the H-1B visa as an election issue. This could put pressure on Democratic challenger Joe Biden, who has already promised to reverse one of Trump's H-1B actions.
Joe Biden Former vice president
In June, Trump issued an executive order barring the issuance of any new H-1B work visas, and some others including the L-1 visa used for firm transfers, until year's end. Asked about that ban, Biden recently said, "that will not be in my administration."
More broadly, Biden pointed to the Senate's 2013 comprehensive immigration reform bill as a model, which included H-1B visa reforms.
The 2013 bill proposed raising the H-1B cap for visas issued, now at 85,000, to 205,000 over time. It would have increased visa wages and limited large users to having no more than 50% of a workforce on H-1B and L-1 visas.
The immigration reform bill was approved with bipartisan support in the Senate, 68-32, then controlled by Democrats, but it was not taken up by the Republican-controlled House.
Trump's approach gets mixed reviews
Trump's approach has been to attack the H-1B work visa program through administrative changes, and not always successfully. The administration, for instance, was using stringent regulatory interpretations to deny H-1B work visas to IT contractors. The administration lost a court challenge over its new interpretations.
Biden will make the H-1B work visa process easier to deal with and more accommodating, said Peter Bendor-Samuel, CEO at the Everest Group, an outsourcing advisory and research firm. Biden might also include reductions of some fees raised by the current administration.
The Trump administration is "looking to find reasons to deny" an H-1B work visa application, but "it's likely under a Biden administration that would be reversed," Bendor-Samuel said.
Hal Salzman, a professor of planning and public policy at Rutgers University, said the last four years "didn't lead to the dramatic reform of guest worker programs many had hoped for."
But Salzman is a critic of the visa program. He has testified in Congress about it and argued that the U.S. produces an ample supply of STEM workers who are undercut by lower visa wages and the use of the program to move work offshore. Nonetheless, Salzman gave some credit to the current administration's "incremental" efforts that are "perhaps the largest steps toward reform since these guest worker programs were created," he said.
"The administration has focused the agencies' attention on the abuses in the programs, even if enforcement is still weak," Salzman said.
"Presumably Biden is signaling to the technology companies that they can support his campaign with the promise that, even in the midst of record unemployment, there will be little labor market assessment of guest worker programs, little oversight of abusive guest worker programs and generally a continued erosion of what few labor market rights workers have remaining," Salzman said.
H-1B remains an issue
The TVA is a federally-owned corporation, which gave Trump leverage. The TVA had a contract to shift work to offshore firms, and some employees left their jobs before the order was enacted. About 140 IT employees would have been affected by the TVA's decision, according to one source.
Despite TVA's reversal, offshore outsourcing and the H-1B work visa remain issues, even during the pandemic.
This month, for instance, clothing and home décor retailer Lands' End filed an application for Trade Adjustment Assistance benefits for workers. The application was filed by Lands' End's HR manager and stated that 14 jobs were impacted.
Lands' End, according to its filing, is outsourcing work to Tata Consultancy Services (TCS), an IT services firm in India and a major H-1B user. TCS has filed Labor Condition Applications, one of the steps in the H-1B application process, for computer occupations at Lands' End. The retailer did not comment for this story.
Lands' End is not alone. In June, The Vanguard Group Inc., an investment management firm, said it was transferring 1,300 employees who supported record-keeping client administration, operations and technology to Infosys. This process is typically called re-badging, for those who accept the transfer.
Infosys operates its headquarters in India and is a major H-1B user. The Vanguard jobs will move Oct. 12, a spokeswoman said. Those who take the Infosys jobs will receive the same salary and comparable benefits for 12 months.
Silicon Valley likes Biden
In its handling of the H-1B program, the Trump administration has focused its visa restrictions on IT outsourcing firms.
For instance, in the 2018 federal fiscal year, IT services firm Cognizant Technology Solutions had only 68% of its H-1B applications approved; Infosys, only 74%. That same year, Microsoft, Facebook and Apple each had a 99% approval rate for their H-1B visa applications, according to government records.
Despite Trump's lighter visa touch on the tech giants, Silicon Valley is pouring its money in the direction of Democrats.
According to campaign finance watchdog Center for Responsive Politics, campaign contributors affiliated with internet firms such as Google's Alphabet Inc., Amazon, Netflix, Facebook, Microsoft and Salesforce had given more than 97% of their money to Democrats as of Aug. 21. That figure includes running totals for Democratic primary candidates, such as Sen. Bernie Sanders of Vermont.
The money doesn't come from the companies, but from employees and related individuals, including an employee's immediate family members.
Biden has received $3.8 million from campaign donors affiliated with internet firms, with the rest split among a large field of Democratic candidates. In contrast, Trump received $325,000 from this industry sector.