What’s the Meaning of Trump’s “Buy American and Hire American” Executive Order?

A little noticed executive order is starting to shake up employers who legally hire highly trained workers, such as computer analysts. On April 18, 2017, President Trump issued Executive Order 13788, “Buy American and Hire American.” Sounds like a stump speech. It’s much more than that.

“Hire American” means this: “In order to create higher wages and employment rates for workers in the United States, and to protect their economic interests, it shall be the policy of the executive branch to rigorously enforce and administer the laws governing entry into the United States of workers from abroad, including section 212(a)(5) of the Immigration and Nationality Act.”

The focus is on H-1B visas. Currently, U.S. law allows approximately 60,000 foreign-nationals with advanced degrees and high skills to work for three years in America. Often, these terms are extended three more years.

No H-1B visa can be issued unless and until an employer advertises for the job, and after finding no qualified candidates, submits a request for “labor certification” to a state labor department. The state determines the market rate for these jobs—a clear protection against undercutting U.S. wages.

I’ve had numerous H-1B students in my professional MBA class (these students are also full-time employees going to night school). 
Some are employed by Caterpillar—a company that hires many University of Illinois engineering undergraduates (Americans), but also hires Indian (and other nationality) engineers. 
One student was a full-time engineer working on the largest excavator made in the U.S. 
I had another H-1B student from Brazil. He was hired by ADM (a global food company) to help the company with its financial and hedging strategies in world grain markets.

Okay, so what does it mean that the regulation says to hire “United States workers”? That term is already defined by our immigration law as someone born in the U.S., or a naturalized citizen, or “Lawful Permanent Resident” (green card holder).

What’s the big deal here? The bottom line is that the Trump administration is gearing up this spring to bring ICE to places such as Microsoft, Apple, Caterpillar, ADM, large banks and so on, and start a rigorous process of seeing how many employees are on H-1B visas, is their paperwork in order, identify these workers to make sure that no more extensions are granted, and also see what American workers have been shut out of a job.

There is great irony here. Trump is a deregulator—but here, he is telling American employers to stop using a legal method for hiring people. It’s like the old days when unions told employers to hire their members or face dire consequences.

So, if you are an HR executive who uses H-1B, be prepared for a visit from ICE. Be prepared to open your files on the spot. And be prepared for frightened and intimidated employees.