How The Trump Administration Can Strengthen Its New H-1B Reforms

The Trump administration announced two changes at the end of September to reform the H-1B nonimmigrant visa program. On September 19, President Trump issued a proclamation that would add a $100,000 fee to initial H-1B petitions. Then, on September 22, the U.S. Department of Homeland Security (DHS) proposed a new regulation to change the way the U.S. Citizenship and Immigration Services (USCIS) selects H-1B registrations that are subject to the annual H-1B visa cap. This process would weigh higher-paid registrants above those who are offered lower wages, respective to the occupation and region in which they would be working.

The H-1B visa, created under the Immigration Act of 1990, was intended to allow U.S. employers to temporarily hire foreign workers in “specialty occupations” requiring advanced skills. The program was sold to the public as a legal mechanism to fill genuine labor shortages in high-skill jobs while ensuring the program would not disadvantage U.S. workers.

Loopholes in the program’s laws and regulations, however, allow employers to lawfully pay foreign workers below the prevailing wage, undercutting U.S. workers’ bargaining power. They also generally do not require H-1B petitioners (employers) to demonstrate that they attempted to recruit a U.S. worker before filing for an H-1B worker, making it even easier to disguise unfair labor competition between U.S. workers and their foreign peers.

Those who are required to because they are considered H-1B dependent employers can wiggle out of the law’s weak restrictions by attesting that they are either paying an H-1B worker at least $60,000 annually (well below the average wage that many occupations with high rates of H-1B workers offer) or that the worker holds a master’s degree or higher in a specialty related to the job.

The Trump administration’s recent actions demonstrate a clear desire to remedy some of these issues. Here is how I would strengthen them:

$100,000 H-1B Fee

In this case, the president is using his 212(f) authority to exclude “any class” of aliens he determines to be “detrimental to the interests of the United States” in a novel way: by putting his finger on the scale to favor the hiring of U.S. workers over foreign workers. CIS has written extensively about how the laws and regulations governing this visa program allow employers to lawfully pay foreign workers less than the average or prevailing wage in the same occupation/region.

First, I would amend the proclamation to make the payment an annual fee, rather than a one-time fee. As my colleague George Fishman explained last week, because H-1B visa holders may work in the United States for up to six years, employers in most industries will still obtain a significant cost savings by hiring an H-1B worker over a U.S. worker. That savings will only be about $16,000 less per year than they would have otherwise saved. It’s not nothing, but it’s not enough to make U.S. workers more competitive when it comes to businesses’ bottom lines.

Second, the president should require the fee to apply to all H-1B beneficiaries, not just those entering the United States from abroad. Currently, many H-1B workers are already in the United States at the time they convert to an H-1B status (they may have been foreign students in F-1 status, working under Optional Practical Training, for example). We predict that prospective H-1B workers will work around the $100,000 requirement by entering on another status, such as an L visa (for managers, executives, or workers with specialized knowledge) or B-1 or B-2 visas (for temporary business activities or for tourists, respectively). Once they are legally in the United States, under the current framework, the fee would not apply. This loophole needs to be closed if the administration wants this reform to have any effect.

The New H-1B Selection Rule

CIS strongly recommends that DHS resurrect the rule it finalized during the first Trump administration in 2021, which required USCIS to select the highest-paid H-1B petitions in years where the demand for H-1B workers exceeds the supply of visas. The new proposal weighs higher-paid petitions more heavily, but will still perform a more random lottery.

Prioritizing higher wage levels, rather than merely weighing them more heavily in the lottery, will be more effective at protecting U.S. workers from unfair competition on account of cheaper labor. The administration claimed that it was preserving the opportunity for workers certified at lower wage levels to obtain H-1B visas because some do present valuable contributions to U.S. business. The problem with this rationale, however, is that by using a lottery system, there is no way to distinguish a low-wage-level worker that provides a valuable skill to a business from one that adds nothing but costs savings.

Help Shape Administrative Policy

Because the new H-1B selection rule was issued a “notice for proposed rulemaking,” anyone can participate in the rulemaking process by submitting a public comment. The comment period of this proposal will be open until October 24. 

During this time, members of the public can submit feedback, including support, opposition, or relevant policy alternatives, through regulations.gov or directly on the federal register’s website. Generally, all comments are publicly available for review, and agencies must review and respond to all relevant comments before it can finalize the regulation.

Public comments give individuals, organizations, and experts the opportunity to provide the government with real-world perspectives, data, and feedback that agencies may not otherwise have considered. By highlighting potential impacts, gaps, or improvements, these comments can influence how final policies are written and implemented.