Amid mass layoffs being announced by several companies, the Donald Trump administration came up with a new executive order that directly links layoffs with H-1B hiring. H-1B is a visa program that allows companies to hire skilled workers from foreign countries. It is a common allegation that companies fire their workforce while continuing to hire for H-1B as that would cost them much less. In the new executive order, the government is now telling the agencies to look at an H-1B sponsoring company’s layoff record when deciding whether to approve or process H-1B-related applications.
What changes?
Previously, an employer’s layoffs were not generally a broad standalone factor considered in every H-1B case. There are already anti-displacement rules for certain H-1B-dependent employers and willful violators, but those rules are narrower.The new order directs DOL, DHS and State Department to consider whether an H-1B sponsoring employer recently laid off US workers; plans to lay off US workers; particularly where those workers are “similarly situated” to the H-1B position being sought.
What does “similarly situated” mean?
It essentially means US workers whose jobs are sufficiently comparable to the H-1B position — considering things such as the job duties, qualifications, experience and location. H-1B visa program is for skilled professionals but if equally skilled Americans are fired to make space for H-1B workers, this becomes a problem now.However, the new order does not yet spell out exactly how agencies will define “similarly situated” for this broader review. Implementation guidance is still expected.
Does a company having layoffs automatically mean the H-1B will be denied?
No. The order does not say that. It says the agencies should consider recent or planned layoffs that negatively affect similarly situated US workers. It does not say that any layoff automatically makes an employer ineligible to sponsor H-1B workers. The precise implementation and evidentiary standards remain to be established.For example, if a company lays off marketing employees but is sponsoring H-1B software engineers for positions that haven’t been eliminated, the relevance of those layoffs would be different from a situation where it lays off software engineers and simultaneously seeks H-1B workers for comparable engineering positions.
Why this matters for Indian H-1B workers
A majority of the H-1B workers every year come from India. The new executive order will not impact individual H-1B visa workers. The scrutiny will be on the companies hiring them.The Trump administration cited figures that 800,000 to 1.3 million American employees have been fired in the tech sector from 2022 through 2026. But the tech companies are requesting for hundreds of thousands of H-1B workers.“One foreign country’s foreign minister even publicly admitted that H-1B ‘has become the outsourcing visa’,” the order said, referring to a former Indian minister.