A new Executive Order imposes tightened scrutiny and oversight of H-1B filings, requiring federal agencies to consider recent layoff activities and other economic and wage data during the adjudication process.
Citing technology-sector layoffs from 2022 through 2026 and an asserted wage gap between H-1B workers and comparable U.S. workers, the executive order Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program seeks to protect U.S. workers by increasing scrutiny of H-1B filings and coordination among federal agencies.
The order takes direct aim at third-party placement and outsourcing firms, asserting that these entities leverage H-1B cap registrations to displace local labor and eventually offshore job opportunities.
Major Requirements of the Executive Order
1) Expanded Interagency Coordination
Historically, the administration of H-1B petitions has primarily rested with the Department of Homeland Security (DHS) and the Department of Labor (DOL). This new order mandates that DHS and DOL closely coordinate and consult with other agencies such as the The Secretary of Commerce and The Secretary of Education to collect and review relevant wage, employment, academic, industrial, and economic data to ensure petitions align strictly with statutory intent.
2) Increased Scrutiny on Employer Layoffs
The governing agencies must now take into consideration whether the sponsoring employer directly or indirectly engaged in layoffs within the previous year, or plans future layoffs, that negatively impact similarly situated U.S. workers when evaluating Labor Condition Applications (LCAs), petitions, visas, and entries.
3) Immediate DOL Audits and Data Reviews
The order directs the Secretary of Labor (through the Wage and Hour Division) to initiate a review of data related to previously submitted LCAs within 30 days to determine if further enforcement actions or investigations against sponsoring employers are warranted under existing statutory provisions.
Impact for Employers and Foreign Professionals
- There will be stricter scrutiny for sponsoring companies: Companies with recent domestic layoffs should expect their H-1B petitions to face much higher hurdles. Demonstrating a clear, direct need for specialized talent that cannot be met locally will be more important than ever.
- A Heavy Burden for Third-Party and Outsourcing Models: Businesses relying on third-party placement or consulting models are squarely in the crosshairs. The administration's focus on these structures suggests an impending wave of audits and heightened rejection rates for off-site deployments.
- Rigorous Documentation: Employers will need to meticulously document their recruitment efforts, wage structures, and the exact nature of the "specialty occupation" duties to mitigate the risk of DOL investigations or visa denials.
