H-1B visa suspended: Trump eyes H-1B reform towards 'merit-based immigration'

US President Donald Trump has directed his administration to “reform” the H-1B visa system and move in the direction of merit-based immigration, White House officials have said.

“Moving to a merit-based immigration system,” the White House said in a statement soon after Trump issued a proclamation to temporarily suspend H-1B and other work visas till the end of the year. The Trump Administration will reform the immigration system to prioritise the highest-skilled workers and protect American jobs, it said.

Under these reforms, the H-1B programme will prioritise those workers who are offered the highest wage, ensuring that the highest-skilled applicants are admitted, the White House said. The Trump Administration will also close loopholes that have allowed employers in the US to replace American workers with low-cost foreign labour, it said. These reforms will help protect the wages of American workers and ensure that foreign labour entering our country is high skilled and does not undercut the United States labour market, the White House added.

“The more permanent actions that he is directing us to take include reforming the H-1B system to move in the direction of a more merit-based system. You hear the president talk all the time about getting the best and the brightest, and you also hear him talking about protecting American jobs. So, these reforms will do both,” a senior administration official told reporters during a conference call.

Under these reforms, the H-1B programme is going to prioritise those workers who are offered the highest wages as the best proxy for what they bring to the table to add to the American economy, the official said. Noting that there is a cap on H-1B visas of 85,000 every year, the official said that last year, 2,25,000 applications were received for those visas.

“Up until this year, those visas have been distributed through random lottery... The president has instructed us to get rid of the lottery and replace it with ranking the salaries -- so the top 85,000 salary offers among the 225,000 or so applicants will get visas,” the official said.

This will drive both the wage-level and the skill-level of the H-1B applicants up. It will eliminate competition with Americans, it will reduce American competition in these industries at the entry-level, and will do more to get the best and the brightest, the official asserted. According to the official, Trump has also instructed them to close the loopholes that have allowed employers to, essentially, domestically outsource their labour by replacing American workers with low-cost foreign labour.

“The way this loophole worked was the analysis of whether an incoming immigrant worker would displace an American worker was done at the company hiring the immigrant,” the official said.

If the company hires a bunch of immigrants and then subcontracts them out to another company -- say, Disney or AT&T, to just pick two historical examples -- then they end up displacing American workers at Disney and AT&T, both of which infamously had their American citizen employees training their H-1B replacements as their last act, the official said.

“The president has instructed us to end that practice and will do so by regulation as soon as we possibly can,” said the senior administration official.

Trump among other things has instructed to change the prevailing wage calculation and clean it up, with respect to H-1B wages.

“It is an old, crazy system from the Clinton era, with four tiers, and the prevailing wage calculation is done in a variety of bases,” the official said.

“The Department of Labor is going to fix all that, with the idea of setting the prevailing wage floor at the 50th percentile so these people will be in the upper end of earnings, so we’re getting the best and the brightest, we’re adding the most value to the economy, and we’re maximizing the opportunity for Americans to get jobs,” the official said.

The Secretary of Labor is going to commence using his statutory authority to investigate abuses in the H1B states, the official said.

“While this statutory authority has existed, I do not believe that any Secretary of Labor, prior to Secretary Scalia, has ever sought to use it. The President has directed him to do that. He’s enthusiastic to commence that,” the official said.