Trump administration's H-1B visa crackdown: Expect big hike in foreign worker wage costs

Ahead of the US election, the Trump administration wants new rules to raise the cost of foreign workers on H-1B visas.

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Tech companies on Tuesday were hit with major changes to the high-skilled worker H-1B visa program that will make them pay foreign employees much higher wages. 

The changes to the skilled visa program were announced by the White House as the Department of Labor announced an interim final rule that aims to bring wages of foreign workers in line with wages paid to US workers in similar roles. The department's rule takes effect once it's been published by the Office of the Federal Register.  

The administration has framed the H-1B reforms and foreign employee wage requirement as a way to protect American workers as the coronavirus pandemic pummels the US labor market. 

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The Department of Labor said the pandemic combined with potential abuses of the H-1B visa program required "immediate corrective action". 

"The US Department of Labor is strengthening wage protections, addressing abuses in these visa programs, and ensuring American workers are not undercut by cheaper foreign labor," said US secretary of labor Eugene Scalia

"These changes will strengthen our foreign worker programs and secure American workers' opportunities for stable, good-paying jobs."

The interim rule aims to improve the accuracy of the 'prevailing wage' methodology that the department currently uses to remove incentives for companies to hire foreign workers in the US rather than US workers. 

"The current wage-level computations may adversely affect the wages and job opportunities of US workers by allowing employers to pay wages to foreign workers at a rate below the market rate for similarly employed US workers," the interim rule states. 

"This can result in either employers preferring to hire foreign workers over US workers, or result in wage suppression for US workers. These problems, in turn, can also impede US workers' return to the workforce at income levels comparable to what they were making before the downturn."

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As reported by the New York Times, Kenneth Cuccinelli, the acting deputy secretary of homeland security, said he expects the new rules to reduce the number of petitions filed annually for H-1B visas by a third. The government issues 85,000 H-1B visas each year.  

Normally, for new rules like this to take effect, the department would be required to obtain feedback from the public. 

However, by bypassing the usual public consultation period, the department's new rules could be delayed by court challenges.