President Donald Trump signed an executive order Friday requiring all federal agencies to determine whether H-1B sponsors have laid off, or plan to lay off, American workers when reviewing visa filings.
The order, titled "Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program," declares the obvious. The H-1B visa program, designed to bring "uniquely skilled and highly specialized foreign temporary workers to strategically supplement the United States economy," has gone off the rails. Instead, we have a system that is replacing American workers with cheaper, and perhaps incompetent, foreign labor; see Trump Dept. of Justice Nails OpenAI for Hiding Jobs From Americans to Hire Foreigners – RedState.
Instead, the program has been widely abused by certain employers, third-party placement groups, and outsourcing firms to undercut and displace the supply of skilled United States labor. The large-scale, systematic abuse of the H-1B program to obtain non-qualifying foreign labor has undermined the additive purpose of the program and harmed the wages, working conditions, and job opportunities of skilled American workers.
Between 2022 and 2026, the executive order alleges that as many as 1.3 million American workers were displaced by cut-rate foreign labor.
The order quotes from the annual report of an unnamed company, which "warned its shareholders that restrictions on cheap H-1B labor could force the company to use 'local' workers, which 'may only be available at higher wages.'” As I said, the quote isn't attributed, but it reads like a version of a warning Cognizant Technology Solutions issued to investors in a December 2025 SEC filing:
In addition, changes in immigration laws or policies, or varying applications of immigration laws and policies, have limited the availability of certain work visas in the U.S., which could exacerbate competition for skilled labor. Our business has experienced in the past and may experience in the future employee attrition at levels which could cause us to incur increased costs to hire new employees with the desired skills. We may not be successful in recovering through price increases or other mechanisms any increases we make to compensation, which could adversely affect our profitability and operating margin.
I posted on this issue earlier in September: Inspector General Promises 'Handcuffs Await' for Massive Corporate Visa Fraud for Foreign Labor – RedState.
The executive order tells the Departments of State, Labor, and Homeland Security to take into account layoffs in the prior year, or planned cuts that would hurt similarly situated U.S. workers, including those carried out indirectly. That review applies across labor condition applications, H-1B petitions, visa applications, and admission at the border. Agencies are also directed to pull wage, employment, and industry data from other federal departments when they assess those cases; see Labor Dept. IG Launches Probe on Criminals' Big Business Through H-1B Program – RedState.
This is so critical. For over a decade, we've heard of U.S. companies, and some states (let's hear it for the great state of Iowa), laying off American workers, then contracting with a body shop to fill the slots with foreign labor paid a fraction of what the former workforce earned. Often, workers are forced to train their replacements and sign a "non-disparagement" agreement as the price of being given a severance payment.
For instance, Lee Perrero, an employee of Walt Disney Parks and Resorts' information technology department, was told his job would end in 90 days and he had to train the person taking it. Replacements arrived through an outsourcing firm using H-1B labor. He described sitting next to the new worker while they recorded his screen. Disney reportedly tied his severance package to “satisfactory” performance during that handoff.
A Los Angeles Times report interviewed several Southern California Edison IT workers who said they had to teach Tata/Infosys staff their jobs. They stayed "anonymous because severance forbade disparaging the company." One recalled management saying they could get several Indian contractors for the price of one American.
Let's take a quick look at what the order does.
- It requires interagency cooperation on whether H1B visa holders are replacing Americans.
- It is not an outright ban on companies that have “directly or indirectly engaged in layoffs within the previous year or plans future layoffs that negatively affect the employment of similarly situated United States workers.” That said, would you want three federal agencies, and probably Justice and Internal Revenue, crawling up your... I'm sorry, this is a family website.... I mean digging through your books trying to find a link between your layoffs and H-1B hiring?
- A retrospective analysis of H-1B employment is required within 30 days of any H-1B hiring. This review may include Commerce, Education, and the Small Business Administration to assess impacts on wages and the labor market.
- The order extends until September 21, 2027, the $100,000 fee imposed on new H-1B visa applications on September 19, 2025. That fee has been blocked by a federal judge because, of course, it has; see Court Knocks Down Trump’s H-1B Fee, So He Builds It $3,265 Taller – RedState. Even with the block, it has had an impact because no one is going to sponsor 10,000 H1B visa holders and end up paying $100K each.
The $100K fee has had a significant impact; see President Trump's New Order on H-1B Visas Sends Shockwaves Through Immigrant Communities – RedState. H-1B visa registrations by the largest outsourcing firms cratered, going from nearly 25,000 to barely 2,000.
This is not a panacea; plenty of loopholes still need to be plugged, but for the first time in decades, the U.S. government has come down solidly on the side of the American worker and against Corporate America.