The second half of 2022 has not been kind to tech workers in Silicon Valley. By now, it's no longer news that rising interest rates, inflation, and gloomy economic forecasts are causing many U.S. tech companies to implement massive layoffs. Amazon and Meta, Facebook's parent company, are two of the most recent companies to announce plans to let go tens of thousands of workers, following big layoffs at other major American tech companies in recent weeks, including Salesforce, Twitter, and Google.
Troublingly, nearly all of these companies are major users of foreign work visas, including the H-1B visa. Amazon currently ranks first in the number of H-1B visa approvals. Meta, which is also a top H-1B employer, is listed by the U.S. government as an H-1B dependent employer, meaning at least 15 percent of its workforce are H-1B visa holders (this percentage must be higher for smaller companies). And that doesn't even include other foreign workers, such those in the Optional Practical Training program, a legally questionable arrangement which lets foreign students stay and work for years after graduating. As my colleague David North reported, while there is evidence that most of these layoffs have involved both U.S. and foreign workers, the exact mix of those two work forces are unknown.
Generally-speaking, federal laws and regulations require employers to certify that they will not displace an American worker in the 90 days before or after petitioning for an H-1B worker. On its face, this sounds like a reasonable measure to prevent the replacement of U.S. workers with (often cheaper) foreign equivalents. But considering that petitions for an October 1 start of the fiscal year are often made about 180 days in advance in April, it becomes apparent that these protections are designed to protect no one.
Congress created the H-1B program to allow employers to hire temporary foreign workers to fill gaps in labor shortages, specifically in positions requiring highly specialized knowledge. A key goal of the program at its inception was to help U.S. employers meet their business needs where it is "unlikely that enough U.S. workers will be trained quickly enough to meet legitimate employment needs," and thereby remain competitive in the global economy.
However, companies that are laying off a sizable percentage of their staff cannot in good faith claim to need large numbers of temporary foreign workers. This is especially true in the tech industry, where data shows that more than a third of American graduates in science, technology, engineering, and math ("STEM") do not obtain employment in a STEM field after graduation.
If Congress is serious about protecting American workers—i.e., its constituents—it needs to act now to protect workers from unfair displacement.
Current rules are ineffective at protecting American workers from unfair competition, wage suppression, and displacement in the workplace. These minimal protections include limits on the duration of H-1B visas as well as labor certification requirements, under which employers pledge to the U.S. Department of Labor that hiring foreign workers will not negatively impact their current workforce and that the foreign workers they are seeking will be adequately paid. Too often, however, one or both of these assurances are never realized.
If federal law already requires companies to confirm that they will not displace U.S. workers on an H-1B hire's way in, it should also require companies to prioritize the retention of their American workforce (i.e., U.S. citizens and green card holders) over temporary visa workers in similar occupations when workers are forced out.
Additionally, the 90-day period of protection should be eliminated in favor of protecting U.S. workers for the duration of an H-1B worker's employment with a U.S. business.
The Labor Department must also correct its regulations to require that foreign workers are paid at least the regional prevailing wage for each occupation, as is already mandated by law. Current regulations allow employers to petition for lower-skilled but still, somehow, "high-skill" foreign workers and pay them significantly below the region's median wage, in many cases undercutting qualified U.S. workers.
The Labor Department must also implement additional safeguards to ensure that foreign workers are not exploited while U.S. workers are unfairly stripped of economic opportunity and high-quality working conditions in their own country.
Once a company is designated as "H-1B dependent," the Labor Department scrutinizes it (a little) more carefully. It's is right to raise an eyebrow at businesses claiming to be so unable to find American workers that they have to import a significant portion of their workforce. Lawmakers must empower the Labor Department to act on that suspicion in a more meaningful way.