Companies that want to fill positions with non-U.S. workers on H-1B visas will end up having to pay them more — and they’re likely need to be better educated in general — under a new executive order signed by President Trump on Tuesday, potentially making the business model of tech outsourcing firms less viable.
The executive order is very light on details but one crucial phrase could signal its intent. Government agencies are to suggest reforms that ensure H-1B visas go to the “most-skilled or highest-paid.”
“Right now, H-1B visas are awarded in a totally random lottery, and that’s wrong,” Trump said at the signing ceremony at Snap-On Tools in Kenosha, Wis.
How that might be implemented is not addressed in the order. Options might include moving from the current lottery model to something more like an auction, said experts.
For example, it could mean “if a company is offering $140,000 for one position and another is offering $70,000, the $140,000 is going to be selected,” said Ted Ruthizer, a partner and expert in immigration law at the New York firm of Kramer Levin.
In the educational realm, it might mean putting Ph.D. holders above those with Masters of Science who would be above those with simply Bachelors degrees.
The largest impact would likely be on often-reviled outsourcing companies such as Tata and Infosys which have built lucrative businesses by bringing computer professionals, often from India, into the United States on H-1B visas.
“The real abusers of H-1B are Indian offshoring companies. They obtain a large number of H-1B visas, they bring people in for relatively short periods of time, they pay them below market rate, and their job is to send work back to India,” said Edward Lazowska, the Bill & Melinda Gates Chair in Computer Science & Engineering at the University of Washington in Seattle.