President Donald Trump signed an executive order Monday that bars federal government agencies from displacing American nationals and citizens with foreign workers. It also calls for prohibiting American employers from using H-1B workers to displace Americans in outsourcing contracts. Indians have been largest beneficiaries of the H-1B visa programme.
The White House said in a statement the order will "create a policy where Federal agencies will focus on United States labor in lucrative Federal contracts" as it will be :unfair" for federal government agencies to " replace perfectly qualified Americans with workers from other countries".
All federal agencies will conduct an internal audit following to order to ensure "only United States citizens and nationals are appointed to the competitive service.".
The executive order also enjoins upon the department of labor, which is responsible for ensuring the fairness of the process of hiring foreign workers, to "finalize guidance to prevent H-1B employers from moving H-1B workers to other employers' job sites to displace Americans workers", in what is called third-arty locations, essentially the practice of outsourcing using foreign workers on H-1B.
"President Trump's actions will help combat employers' misuse of H-1B visas, which were never intended to replace qualified American workers with low-cost foreign labor," said the White House.
The is a follow-up of the April 2017 "Buy American, Hire American" executive order that unleashed a series of ongoing steps and measures bringing unprecedented scrutiny and tightening of the H-1B visa programme that has been in the crosshairs of the administration's immigration hardliners.
Indian hired by US companies such as Facebook, Google, Microsoft and Amazon and US subsidiaries of Indian IT forms Infosys, TCS and Wipro are the largest beneficiaries of the H-1B visa programme, accounting for more than 70% of the 85,000 that are issued every year.
A response is awaited from Nasscom, which represents the Indian IT industry.
The immediate provocation for the Monday order is the decision in May for the Tennessee Valley Authority (TVA), the largest federally owned power provider, to outsource 20% of its highly skilled tech workers to Accenture, Capgemini and CGI, that are based in Ireland, France and Canada respectively.
The White House said TVA's action could lead to the firing of 200 highly-skilled American tech workers, who will be replaced by "low-wage, foreign workers hired on temporary work visas." and cost the local economy tens of millions of dollars in the coming 5 years.
"So let this serve as a warning to any federally appointed board," Trump said at a White House event to sign the order, where he also said he was pushing for the firing of the TVA CEO Jeff Lyash. "If you betray American workers, then you will hear two simple words 'you're fired. You're fired'."
The Trump administration said outsourcing of hundreds of workers was "especially detrimental in the middle of a pandemic", which has led to millions of job-losses. Trump has also suspended the H-1B visa programme — as well as Green Cards — to ensure Americans get the first shot at jobs becoming available now as the economy struggles to get back to normalcy, from record job losses.
It also sought to frame the practice of outsourcing, with a new twists, asa "national security risk", if linked to IT jobs that involve sensitive information. The reference was probably to the country's growing estrangement from China, which the Trump administration has accused of theft of intellectual property rights.