Executive Order Addresses Federal Contractors’ Use of Foreign Workers

Proskauer - Government Contractor Compliance & Regulatory Update

Quick Hit: On August 3, 2020, President Trump issued an “Executive Order on Aligning Federal Contracting and Hiring Practices With the Interests of American Workers” (the “Order”), which requires federal agencies to perform an internal audit of their contracting practices and the use of foreign workers by federal government contractors.  Further, the Order instructs the Secretaries of Labor and Homeland Security to ensure the employment of H-1B visa holders by contractors does not have “adverse effects” on United States workers.

More Detail: Within 45 days of the date of the Order (or by September 17, 2020), the Secretaries of Labor and Homeland Security are instructed to “take action, as appropriate and consistent with applicable law, to protect United States workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites (including third-party job sites), including measures to ensure that all employers of H-1B visa holders, including secondary employers, adhere to the requirements of section 212(1) of the Immigration and Nationality Act (8 U.S.C. [§] 1182(n)(1)).”

Among other things, section 212(1) of the Immigration and Nationality Act requires employers, in applying to offer an H-1B visa, to state:

  • “the employer did not displace and will not displace a United States worker . . . employed by the employer within the period beginning 90 days before and ending 90 days after the date of filing of any visa petition supported by the application”;
  • the employer “has taken good faith steps to recruit, in the United States using procedures that meet industry-wide standards and offering compensation that is at least as great as that required to be offered to H-1B nonimmigrants . . . United States workers for the job for which the nonimmigrant or nonimmigrants is or are sought”; and
  • the employer “has offered the job to any United States worker who applies and is equally or better qualified for the job for which the nonimmigrant or nonimmigrants is or are sought.”

The Order directs that federal government agencies to conduct audits of their contracting practices for contracts awarded in fiscal years 2018 and 2019. The head of the each agency is required, within 120 days of the Order (or by December 1, 2020), to “submit a report to the Director of the Office of Management and Budget summarizing the results of the [audit].”  If the audit reveals that corrective action is necessary, agency heads are required to “recommending, if necessary, corrective actions that may be taken by the agency and timeframes to implement such actions; and proposing any Presidential actions that may be appropriate.”  The head of each federal agency is directed to look at the following as part of the audit:

  • “whether contractors (including subcontractors) used temporary foreign labor for contracts performed in the United States, and, if so, the nature of the work performed by temporary foreign labor on such contracts; whether opportunities for United States workers were affected by such hiring; and any potential effects on the national security caused by such hiring”;
  • “whether contractors (including subcontractors) performed in foreign countries services previously performed in the United States, and, if so, whether opportunities for United States workers were affected by such offshoring”;
  • “any negative impact of contractors’ and subcontractors’ temporary foreign labor hiring practices . . . on the economy and efficiency of Federal procurement and on the national security”; and
  • “the employment policies of the agency to assess the agency’s compliance with Executive Order 11935 of September 2, 1976 (Citizenship Requirements for Federal Employment), and section 704 of the Consolidated Appropriations Act, 2020, Public Law 116-93.”

In remarks regarding the Order, President Trump stated “we’re finalizing H-1B regulations so that no American worker is replaced ever again.”  Secretary of Labor Scalia also spoke at the signing ceremony, indicating that Department of Labor and the Department of Homeland security will work together to investigate potential abuse of the H1-B program.  Specifically, Secretary Scalia remarked “[f]or more than 15 years, the Secretary of Labor has had the authority to initiate an investigation of abuse of H-1B program when he or she finds reasonable cause. . . .  That authority has never been used. . . . [We] signed a memo of understanding on Friday with the Department of Homeland Security . . . .  They’re going to now share information they have, which I can then use to bring cases.”

We will report any additional development related to the Order here.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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