Bad News For Employers, Immigrants And H-1B Visas In Second Trump Term

A second Donald Trump term would bring new restrictions on legal immigration that would affect employers and likely drive more work and tech talent out of the United States. Trump’s actions during his first term, his rhetoric during campaign rallies and statements by allies signal unwelcome news for companies that rely on foreign-born scientists and engineers to grow and innovate. With Donald Trump winning the Iowa Caucus and leading Joe Biden in some polls, employers may wish to include the prospect of a Trump presidency in their contingency plans.

H-1B Visas Would Face New Restrictions

If Donald Trump becomes president again, companies should expect new restrictions on employing foreign-born scientists and engineers in H-1B status. After he took office in 2017, Trump’s immigration policies increased the denial rate for H-1B petitions for initial employment (typically new employees counted against the annual H-1B cap) to 24% in FY 2018 and 21% in FY 2019. In 2020, a legal settlement forced U.S. Citizenship and Immigration Services to end several practices, causing denial rates to plummet to 2% by FY 2022.

H-1B petitions for continuing employment rose to 12% in FY 2018 and FY 2019. Those petitions were usually extensions for existing employees at the same company. The denials caused employees who could not obtain extensions to leave the United States. The legal settlement resulted in H-1B petitions for continuing employment to decline to 2% by FY 2022.

If Trump officials in a new administration directed USCIS adjudicators to act more restrictively, denial rates would increase. Even successful lawsuits could leave employers with the policies in place for years, which happened after Trump officials restricted H-1B petitions in 2017.

 

In a second term, Trump’s team could return to its H-1B interim final rule published in 2020 (after solving its procedural issues). A lawsuit stopped the rule on procedural grounds. The administration tried to publish parts of the rule again before Donald Trump left office.

Trump 2020 DOL And DHS H-1B Rules

In October 2020, the Trump administration published two rules to limit H-1B visas for high-skilled professionals and their employers. The Department of Homeland Security rule included restrictive definitions of a specialty occupation and an employer-employee relationship and reduced H-1B approvals to one year for work at customer locations.

The Biden administration’s proposed H-1B rule contains a restriction on specialty occupations identical to a measure in the Trump 2020 interim final rule. That would give Trump officials a head start. The Trump and Biden H-1B rules narrowed which positions are specialty occupations by using the phrase “directly related specific specialty.” According to the rules, to be considered a specialty occupation, the position must require “A U.S. baccalaureate or higher degree in a directly related specific specialty or its equivalent” to enter the occupation.

Trump administration officials likely hoped to deal a death blow to companies employing H-1B visa holders who perform work at customer sites. In January 2021, the Trump administration posted a scaled-down version of the October 2020 interim final rule and focused on the term “employer-employee relationship.”

The administration posted online (but did not publish in the Federal Register) its “final rule” in mid-January. It informed the public the rule should be read in combination with a Department of Labor memo issued on January 15, 2021. “The new DHS rule significantly changes the definition of an employer to allow DHS to require the customers of information technology and professional services companies to submit labor condition applications and H-1B petitions as if they were employers of the H-1B professionals, which they are not,” according to a Forbes article.

The goal was to make it untenable for companies to send H-1B employees to customer sites. “These additional requirements would likely drive customers away from any IT services companies that send H-1B visa holders to a customer’s location since few customers want to (or can) take on legal obligations for individuals for whom they do not possess the ability to hire, fire or compensate,” the article noted.

The combination of the DHS rule and the DOL memo might have been unlawful. However, the issue became moot since DHS did not publish its revised H-1B rule before Donald Trump left office.

In October 2020, the Trump Department of Labor published a separate interim final rule designed to price most H-1B visa holders out of the U.S. labor market by significantly increasing the required minimum wage. “Under the new DOL mandated minimum salary, an employer in the San Jose, California area would pay an electrical engineer at Level 4 nearly $85,000 (or 53%) above the market wage, as indicated by a private wage survey, and 54% above the market wage . . . at Level 1,” according to a National Foundation for American Policy analysis.

The Likely Impact Of New H-1B Restrictions

Research shows H-1B restrictions lead to companies sending more jobs, resources and innovations outside the United States. “When U.S. firms are denied H-1Bs, they go abroad, setting up new foreign affiliates and hiring talent there instead of in the U.S.,” according to Britta Glennon, an assistant professor at the Wharton School at UPenn. “For most global multinational companies, this is at almost a 1:1 rate. The results demonstrate an important unintended consequence of immigration restrictions: the movement of jobs and talent abroad, with major implications for U.S. competitiveness.”

The Supreme Court is expected to rule this term on Relentless, Inc. v. Department of Commerce and Loper Bright Enterprises v. Raimondo. Both cases involve Chevron deference, which has granted significant leeway to federal agency interpretations of the law. Ironically, if Trump-appointed justices on the Supreme Court vote to limit Chevron deference, it could provide employers and others with greater legal recourse against highly restrictive immigration regulations drafted by Trump officials in a second term.

Using 212(f) To Block H-1B Visas And Employment-Based Immigrants

As president, Donald Trump extensively used the authority in 212(f) of the Immigration and Nationality Act to restrict the entry of immigrants and temporary visa holders. In April 2020, Trump used section 212(f) to issue a proclamation that suspended the entry of immigrants, including employment-based immigrants. Only the spouses and children of U.S. citizens were exempted.

In June 2020, Trump used his authority to issue a separate proclamation to suspend the entry of H-1B, L-1 and other temporary visa holders. A court ruled the proclamation exceeded the president’s authority, but the ruling did not have a significant practical impact because Covid-19 limited visa processing at U.S. consulates.

The 212(f) proclamations did not prevent employment-based immigrants from adjusting their status inside the United States, which the vast majority do, or stop H-1B visa holders who remained in America and changed status from F-1 student. However, such proclamations could block future H-1B and L-1 visa holders from entering the United States.

In Trump v. Hawaii, the Supreme Court gave wide latitude to the president’s use of 212(f), ruling the ban on the entry of individuals from several primarily Muslim countries did not exceed the president’s authority.

If Donald Trump wins the 2024 presidential election, employers should expect policies restricting H-1B visa holders and employment-based immigrants. They should also anticipate other policies, such as banning the entry of immigrants and temporary visa holders from many Muslim-majority countries. Company contingency plans focused on moving talent and resources outside the United States may accelerate as November 2024 approaches.

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