The Trump administration has unveiled another measure aimed at tightening oversight of the H-1B visa programme, signalling that companies hiring foreign workers after conducting layoffs could face increased regulatory scrutiny.
The move is particularly relevant for Indian professionals, who represent a significant share of H-1B visa holders in the United States and are heavily concentrated in technology and specialised occupations.
Under a new executive order issued on 18 September, the US Departments of Homeland Security (DHS), Labor (DOL), and State have been directed to coordinate more closely when reviewing employer filings under the H-1B programme. According to the White House, the initiative is intended to strengthen programme integrity and address alleged abuses that may affect employment opportunities for US workers.
Layoffs become a new compliance signal
The executive order does not prohibit employers from hiring H-1B workers after layoffs. However, legal experts told Bloomberg Law that workforce reductions could become a more significant factor in enforcement reviews.
According to Edward Raleigh, partner at immigration law firm Fragomen, Del Rey, Bernsen & Loewy LLP, the administration's directive reflects a broader government-wide approach to H-1B enforcement.
"Employers that haven't traditionally had to consider displacement in the H-1B process should be thinking really hard about it and doing a risk analysis," Raleigh told Bloomberg Law.
The development arrives at a time when several major US technology companies have announced workforce reductions while simultaneously investing heavily in artificial intelligence and advanced technologies.
Part of a broader immigration crackdown
The executive order accompanies a presidential proclamation extending a controversial US$100,000 charge on certain H-1B hires from outside the United States. Bloomberg Law reported that the fee remains blocked by a court order but has been extended as legal proceedings continue.
The latest actions add to a growing list of policy changes affecting H-1B employers and workers.
Recent measures include:
- A proposed new six-figure fee for H-1B petitions subject to the programme's annual cap of 85,000 visas.
- Plans to eliminate the current 60-day grace period available to H-1B workers who lose their jobs.
- Increased focus on alleged visa programme fraud through the Department of Labor's Project Firewall initiative.
For Indian professionals working in the US technology sector, these developments indicate a regulatory environment becoming progressively more restrictive.
What the law currently allows
Despite the tougher rhetoric, immigration attorneys note that existing law still permits most employers to hire H-1B workers even if they have recently conducted layoffs.
Under the Immigration and Nationality Act (INA), employers sponsoring foreign workers for permanent residency through the PERM labour certification process face additional obligations if layoffs have occurred within the previous six months.
However, comparable restrictions apply to only a limited group of H-1B employers, including organisations where at least 15% of the workforce holds H-1B status.
Legal experts told Bloomberg Law that an outright denial of H-1B petitions solely because a company conducted layoffs would likely face legal challenges.
George Fishman, senior fellow at the Center for Immigration Studies, told the publication that companies would likely challenge such actions in court.
Meanwhile, immigration attorney Jonathan Wasden suggested the practical impact on many technology employers may ultimately be limited.
Greater scrutiny of employer filings
While the order stops short of introducing a layoff ban, attorneys expect regulators to intensify reviews of employer documentation.
The Department of Labor has been instructed to review previously submitted Labour Condition Applications (LCAs) within 30 days. These forms require employers to attest that hiring H-1B workers will not adversely affect US employees.
According to L.J. D'Arrigo, partner and chair of the immigration practice at Harris Beach Murtha, investigators could examine several potential warning signs, including:
- Extensive use of entry-level wage classifications.
- Employee work locations that differ from information submitted to immigration authorities.
- High volumes of filings by firms that place workers at third-party client sites.
D'Arrigo told Bloomberg Law that such patterns may not constitute violations on their own but could trigger wider investigations.
"An investigation rarely stays confined to the LCA that triggered it," he said.
More documentation likely for employers
Attorneys also expect the policy to result in additional requests for evidence from immigration authorities.
Anne Rowley, counsel at Grossman Young & Hammond LLC, told Bloomberg Law that layoff histories and inconsistencies in labour condition applications could prompt closer examination of future H-1B petitions.
Her assessment suggests employers will need to ensure documentation is highly accurate as agencies coordinate enforcement efforts more closely.
What it means for Indian professionals
For Indian workers already employed in the United States, the executive order does not alter visa eligibility rules. However, it could lengthen scrutiny of employer filings and increase compliance obligations for sponsoring companies.
For employers, particularly in technology and professional services, the message is clear: workforce reductions may now attract greater attention during H-1B reviews, even if layoffs alone do not prevent future hiring.
As US agencies implement the order over the coming months, businesses and foreign professionals will be watching closely to determine whether the administration's tougher stance translates into meaningful operational changes or primarily serves as a heightened compliance signal.