New Executive Order Calls for Review of Federal Contracts and Directs Agencies to Take Action to Protect U.S. Workers

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

On August 3, 2020, the Trump Administration issued an executive order  (EO) directing the secretaries of the Departments of Labor and Homeland Security to “take action … to protect United States workers from any adverse effects on wages and working conditions caused by the employment of H-1B [workers].” The Executive Order on Aligning Federal Contracting and Hiring Practices With the Interests of American Workers also requires the heads of federal agencies to evaluate the contracts (including subcontracts) awarded by their agencies during fiscal years 2018 and 2019 to assess whether  contractors or subcontractors used temporary foreign labor in fulfilling those contracts, and if so, what effect it had on U.S. workers and the economy.

The EO requires the secretaries of labor and homeland security to take action within 45 days of the date the order was issued. The EO authorizes the secretaries to implement measures to ensure that all H-1B employers adhere to the Labor Condition Application (LCA) requirements specified in the Immigration and Nationality Act. By signing the LCA, employers certify that they will pay H-1B employees at least the prevailing wage for the given position in the given area; working conditions will not adversely affect U.S. workers; and hiring H-1B visa holders will not displace U.S. workers.

Analysis and Impact

The Trump administration appears to be seeking to create a policy where federal agencies will focus on U.S. labor in lucrative federal contracts, including subcontracts. Additionally, the Department of Labor and the Department of Homeland Security have been tasked with finalizing guidance that would prioritize high-wage workers and “prevent H-1B employers from moving H-1B workers to other employers’ job sites to displace [U.S.] workers.” It is important to note that the EO does not have an immediate impact on H-1B employees. However, due to the 45-day deadline imposed by the EO, it is likely that new measures focused on H-1B visas will be introduced in the coming weeks.

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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