What is an H-1B Visa, How Did Trump Reform It, & Who’s Affected?

What is an H-1B Visa, How Did Trump Reform It, & Who’s Affected?

H-1B Visas in the U.S. are granted to U.S. employers as a means to hire talent overseas, longterm and legally. H-1B visas are allotted to foreign workers that are qualified for specialty positions and occupations. Until Trump’s H-1B reform, an H-1B served as one of the only means to hiring a high-skilled foreign national to work for extensive periods of time in America. The recent and dramatic changes that the Trump Administration evoked on H1-B’s has put staffing companies, working immigrants and their families into turbulence. Tech companies have been especially damaged by this reform, as a substantial amount of their employees are foreign and working under H1-Bs. 

The major adjustments made to the H1-B visa program will greatly challenge a U.S. employer’s ability to hire qualified workers from overseas. Firstly, the H1-B revision draws up a new understanding of “specialty occupations”, narrowing what used to be a broad definition into something that: A) Limits the number of degrees that qualify for the H1-B program, B) Raises the wages paid to H-1B workers, and C) Shortens the length of certain contract worker’s visas. Until now, foreigners who earned a bachelor’s degree were eligible for specialty occupations, but now they’re required to be specialists in the exact field of work. This revision will effect employers across the nation, especially tech companies who receive a substantial number of H1-B’s every year to provide their foreign hires. According to acting deputy DHS secretary Ken Cuccinelli, about one out of every three of the recent year’s H1-B visa applicants would be denied under the new rules.₁ 

Secondly, the H1-B reform discourages the use of H-1B workers by refusing employers the ability to hire foreign talent as low-cost replacement for otherwise qualified American workers. President Trump claims that this alteration safeguards American employment opportunities by ensuring “real” offers are made to “real employees”, however, it is more accurately understood as an attempt to price qualified H-1B workers out of the U.S. labor market. This new rule neglects to acknowledge the existence of a global market in labor, and instead artificially raises the price of H1-B labor in order to push employers away from hiring people from other countries. Prior to this reform, the Department of Labor (DOL) methodology was based on the average wage paid to similarly employed workers in a specific occupational field. The new DOL regulation dismisses statistics from the table, instead inviting politics to sit at the head of the table to control the prevailing wage. This new DOL regulation is problematic for more reasons than one, but it is particularly troublesome because it pushes the prevailing wage well above what data evidences it to be. By artificially raising the prevailing wage, the labor market is completely disrupted and the entire essence of the prevailing wage is lost. Employers will be forced to make the impossible decision upon whether to comply with the new H1-B wage requirements, or to comply with law enforcing equal, nondiscriminatory pay.

Work Cited:

1. Anderson, Stuart. “Trump Administration Issues Two New Rules To Restrict H-1B Visas.” Forbes, Forbes Magazine, 9 Oct. 2020, www.forbes.com/sites/stuartanderson/2020/10/07/trump-administration-issues-two-new-rules-to-restrict-h-1b-visas/?sh=70299a125120.

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FAQs

What is an H-1B visa and who qualifies for it?

The H-1B visa is a nonimmigrant visa that allows U.S. employers to hire foreign workers in specialty occupations requiring a high level of expertise. To qualify, the foreign worker must typically hold at least a bachelor's degree in a relevant field.

How did the Trump Administration change the definition of "specialty occupation"?

Trump’s reforms narrowed the definition of "specialty occupation," requiring that foreign workers have a more direct correlation between their degree and job role. Previously, a broader range of degrees was acceptable, but now the job and educational background must align more specifically.

How did Trump's H-1B reforms impact wage requirements for foreign workers?

The reforms significantly increased the minimum wage that U.S. employers must pay H-1B workers, in an effort to prevent companies from hiring foreign workers as a lower-cost alternative to American workers.

What effect did the reforms have on the length of H-1B visas?

Some of the reforms reduced the duration of H-1B visas for certain contract workers, making it harder for employers to retain foreign talent long-term without going through repeated renewals.

How are tech companies affected by the H-1B reforms?

Tech companies are particularly affected as they employ a large number of H-1B visa holders. The restrictions on specialty occupations and higher wage requirements make it more difficult and costly for tech companies to hire and retain foreign talent.

What was the rationale behind the wage increase for H-1B workers under the Trump reforms?

The wage increase was intended to prevent U.S. employers from using H-1B workers as a cheaper alternative to U.S. employees, ensuring that foreign workers were paid wages that reflect their high skill levels and discourage displacement of American workers.

How did the changes impact the number of H-1B approvals?

The reforms made it harder for applicants to be approved. According to estimates, nearly one out of every three H-1B applicants under the new rules would be denied due to stricter eligibility criteria and wage requirements.

How do the reforms affect U.S. employers' ability to hire foreign workers?

The reforms make it more challenging for U.S. employers to hire qualified foreign workers, as they must navigate stricter requirements for specialty occupations, higher wage thresholds, and shorter visa durations.

Why did critics argue that the reforms disrupt the labor market?

Critics argue that by artificially inflating the prevailing wage for H-1B workers, the reforms disrupt the labor market, making it harder for employers to afford foreign talent, and potentially driving talent and jobs out of the U.S.

What is the long-term impact of the H-1B reforms on immigrants and their families?

The reforms create uncertainty for H-1B workers and their families, as the changes may limit job opportunities, reduce visa durations, and increase costs, making it more difficult for them to live and work in the U.S. long-term.