Trump administration unveils sweeping changes to controversial H-1B guest worker program

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The Trump administration on Tuesday announced sweeping rule changes to the controversial H-1B guest worker program -- changes that the administration says will protect American wages, crack down on abuse and impact more than a third of the tens of thousands of applications filed each year.

“With millions of Americans looking for work, and as the economy continues its recovery, immediate action is needed to guard against the risk lower cost foreign labor can pose to the wellbeing of U.S. workers,” Deputy Secretary of Labor Patrick Pizzella said in a call with reporters.

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The H-1B visa, for high-skilled workers, has been dogged by accusations of abuse and fraud for years, with critics saying it has been used by tech companies in particular to replace American middle-class workers with cheaper foreign labor and to keep wages low in general. Those in favor of the program say it is used to attract talent to fill gaps that the domestic labor market cannot meet.

The Department of Labor’s interim final rule will change the methodology of the way in which the “prevailing wage” is set. The prevailing wage is what the DOL calculates to be the average wage of similarly employed workers in a specific occupation -- and employers must pay to H-1B workers to ensure wages of U.S. workers are not undercut.

“This rule the department is publishing this week is faraway one of the most significant reforms made to the H-1B program in the past 20 years,“ Pizzella said, emphasizing that the rule would still allow employers to use the program to fill gaps, while giving U.S. workers a “fair shake.”

Meanwhile, a rule from the Department of Homeland Security will narrow the definition of “specialty occupation,” allow the Department of Homeland Security to increase worksite compliance inspections before and after a H-1B petition, and require the petitioner’s employer to make the application directly -- a move to stop companies from bringing in H-1B immigrants and then contracting them to other companies.

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As an example of the change to “speciality occupation,” officials said that language that currently defines a speciality occupation as job where a degree might normally be required will be changed to outright require a degree.

“The H-1B program has been abused by some companies who seek to undermine American workers by bringing low cost or low paid foreign labor into our country,” Deputy Homeland Security Secretary Ken Cuccinelli said on a call with reporters. “The DHS rule will affect over one third of H-1B petitions -- I cannot overstate how big a deal this is.”

Typically, companies can bring in up to 85,000 workers in a year under the program, and applicants come predominantly from India and China.

The rule will go into effect in 60 days after it is published in the Federal Register. President Trump in June published a presidential proclamation banning new H-1B petitions, and this rule would be in place before that ended.

That proclamation, however, has suffered a legal defeat last week.

Business groups, which opposed Trump’s proclamation in June, were wary about the new rules announced on Tuesday.

“We’re still evaluating these proposals, but both of these rules have the potential to inflict serious harm upon many American companies," Jon Baselice, executive director of immigration policy at the U.S. Chamber of Commerce, said in a statement.

Meanwhile those calling for lower levels of immigration overall reacted with delight to the announcement, hailing it as a significant win for American workers.

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Dan Stein, president of the Federation for American Immigration Reform (FAIR), applauded the move and said it would "ensure that U.S. companies will use H-1B workers to augment our domestic labor force, not replace it."

“While the current unemployment crisis triggered these regulatory reforms to the H-1B program, we expect that these changes will be long-lasting,” he said. “Once these protections for American workers are firmly in place, it will be very difficult for any future administration to reinstate the ability of employers to deny jobs and undermine the wages of U.S. workers.”