H-1B Visa Executive Order Needs Companion Legislation

This past Friday, President Trump signed an executive order under which new H-1B foreign worker visas will cost employers $100,000. While loopholes and exceptions are likely to limit its effectiveness, it could spur Congress to pass strong legislation to curb H-1B abuses, leading to real benefits for U.S. workers.

As the executive order notes, “the H-1B visa program was created to bring temporary workers into the United States to perform additive, high-skilled functions, but it has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor.” An accompanying fact sheet from the White House discusses the evidence for this, including:

*  The share of IT workers on H-1B visas has risen from 32% in 2003 to over 65% in recent years.

*  Unemployment among recent computer science graduates has reached 6.1% and 7.5% for computer engineering graduates, much higher than the general unemployment rate.

*  The number of foreign STEM workers in the United States more than doubled between 2000 and 2019, while overall STEM employment only increased 44.5% during that time.

American companies are laying off American technology workers and replacing them with foreign workers. One company was approved for over 5,000 H-1B workers in 2025, while laying off 16,000 U.S. employees this year.

Limits of the New Executive Order

Clearly, this foreign hiring is being used to displace domestic labor, not just to “supplement” it. The new $100,000 surcharge is meant to disincentivize the use of foreign workers in roles where qualified U.S. workers are available, particularly for entry or mid-level jobs. However, it is unlikely to go very far in doing so.

First, the new fee only applies to workers entering the country from abroad. Foreign nationals already in the U.S., the majority of those receiving H-1Bs, will not be affected.

Second, each H-1B visa is good for up to six years of work. Initial claims that companies would have to pay $100,000 annually turned out to be false. So its deterrent effect will be much less than initially advertised.

Third, the Secretary of Homeland Security can grant fee exemptions for particular companies and even whole economic sectors. If the past is any indication, such favors are likely to be liberally dispensed, further eroding the fee’s effectiveness.

Finally, and most important, executive actions are not laws. They can and frequently are reversed by a new Presidential administration. That is why Congress must act with reciprocal legislation to make these reforms both stronger and more durable.

Congressional Action Needed

As Elizabeth Jacobs writes in a recent analysis from the Center for Immigration Studies: “the quickest and easiest reform the Trump administration (or for that matter, Congress) can make is to reinstate the rule it finalized on January 8, 2021, that requires USCIS to select the highest-paid H-1B petitions in years where the demand of H-1B workers exceeds the supply of visas.” Currently, the government conducts a random lottery, which wastes a lot of visas on unnecessary, relatively low-paid hires. Restricting H-1Bs to the highest paid employees would incentivize higher wages in tech, and decrease the programs’ harms to average American workers.

Even better would be for Congress to pass legislation to replace the H-1B lottery with a system where visas are awarded based on employers’ willingness to pay the highest wages. NumbersUSA’s Great Solutions bill S. 2821, the American Tech Workforce Act, would do just that. Visit our Action Board to ask your Senators and Congressional Representative to co-sponsor this pro-worker legislation.

Congress has capped H-1B visas at 85,000 a year, although more than 100,000 are issued every year due to exemptions. Another valuable reform would be to decrease the number of visas in this category — or to discontinue them altogether. With a population of 340 million and 800,000 STEM graduates annually from U.S. colleges and universities, American employers don’t need to look overseas for talented or specialized workers.