This report discusses President Trump’s recent executive order directing federal agencies to take action against employers laying off American workers and replacing them with cheap foreign workers through the H-1B visa program, and evaluates the EO’s chances of success in light of a 1998 law giving most employers the green light to engage in this abusive practice.
Vice President Vance announced this week that as a consequence of petitioning for large numbers of foreign workers for H-1B visas at the same time they are laying off large numbers of American workers (or facilitating the ability of their clients to do so), companies including Microsoft, Adobe, Cognizant, Tata, and Infosys will be suspended from the ability to sponsor aliens for employer-sponsored green cards. This targeting of green cards is seeming acknowledgment of this report's conclusion – that laying off American workers and replacing them with cheaper H-1B workers is in most cases not prohibited by the H-1B program's statutory provisions imposed by Congress. In fact, 28 years ago, Congress refused to bar most employers from engaging in this pernicious process. However, it is not clear that the current regulations regarding the employment-based green card process actually allow for companies to be disbarred on the basis of their use of the H-1B program. I will have an upcoming piece on this question.
Summary
- President Trump has issued an executive order concluding that the H-1B visa program has “harmed the wages, working conditions, and job opportunities of skilled American workers”, and that “Many employers have laid off large numbers of highly skilled American workers, only to promptly hire large numbers of H-1B workers who are often lower-skilled and lower-paid … even forc[ing] laid off American workers to train their foreign replacements.”
- President Trump then directed federal agencies to “take into account” in adjudicating employer petitions for H-1B workers whether an employer “engaged in layoffs … or plans future layoffs that negatively affect the employment of similarly situated United States workers”. But does federal law allow the Trump administration to deny H-1B petitions on the basis of layoffs? Unfortunately, in the vast majority of cases, it does not.
- In 1996 and 1998, Congress had the opportunity to curtail H-1B-fueled layoffs, but in both instances voted down common-sense protections for American workers. In 1998, the House of Representatives was prodded to abandon American workers by Silicon Valley lobbying, the U.S. Senate, and House Republican leadership.
- In 1998, U.S. Rep. Lamar Smith, chairman of the House Judiciary Committee’s Immigration Subcommittee, introduced H-1B legislation including a provision prohibiting employers from laying off U.S. workers and replacing them with H-1B foreign workers. Despite intense lobbying by Silicon Valley, the Judiciary Committee approved the bill (including the layoff prohibition) by a bipartisan vote of 23-4. The Senate Judiciary Committee had earlier passed legislation brushing off concerns about layoffs of U.S. workers, which the Senate approved two days before the House Judiciary Committee vote.
- House Republican leadership set up negotiations between Rep. Smith and the Senate, with the outcome a forgone conclusion — a “compromise” that protected not American workers but predatory practices by H-1B employers.
- The leadership/Senate strategy was to blame Indian “job-shops” for any abuses of the H-1B program and make the layoff prohibition only applicable to them, leaving the vast majority of H-1B employers free to continue laying off American workers and replacing them with H-1B foreign workers. Additionally, the “compromise” excepted even these “H-1B-dependent” employers from the prohibition if they paid their H-1B workers at least $60,000 a year or the H-1Bs had master’s or higher degrees. But the compromise neglected to index the $60,000 wage floor for inflation. Over the ensuing decades, the floor lost more than half its real value, Congress never seeing fit to increase it. So it is now far lower than the average wage in occupations such as software development and computer engineering. Further, more than two-thirds of H-1B workers now have master’s degrees, many of dubious quality. No one can say with a straight face that even H-1B-dependent employers are barred from facilitating the layoff of American workers through the H-1B program.
- At long last, a president has decided to stand up for American workers — President Trump. But he won’t be able to curtail employers’ layoff of American workers and replacement with cheap H-1B labor without congressional action. Will Congress stand up for American workers? I am not holding my breath.
Introduction
On September 18, President Trump issued “Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program”, an executive order (EO) concluding that the H-1B temporary visa program for foreign workers in specialty occupations “has been widely abused by certain employers, third-party placement groups, and outsourcing firms to undercut and displace the supply of skilled United States labor” and has “harmed the wages, working conditions, and job opportunities of skilled American workers”.
No news here. Almost exactly a year ago, President Trump issued a proclamation concluding that the H-1B program “has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor” and that “Some employers, using practices now widely adopted by entire sectors, have abused the H-1B statute and its regulations to artificially suppress wages.”
In his EO, President Trump emphasized that:
Many employers have laid off large numbers of highly skilled American workers, only to promptly hire large numbers of H-1B workers who are often lower-skilled and lower-paid. For instance, technology sector employers have collectively requested H-1B visas for hundreds of thousands of workers, yet have also laid off somewhere between 800,000 to 1.3 million American employees from 2022 through 2026. Employers have even forced laid off American workers to train their foreign replacements.
Again, no news here. In last year’s proclamation, President Trump concluded that “many American tech companies have laid off their qualified and highly skilled American workers and simultaneously hired thousands of H-1B workers”.
What definitely is news is that President Trump directed that:
[T]he Secretary of State, the Secretary of Labor, and the Secretary of Homeland Security shall take into account in any labor condition application, petition, visa, and entry of aliens entering or attempting to enter the United States as H-1B nonimmigrants … whether the employer sponsor directly or indirectly engaged in layoffs within the previous year or plans future layoffs that negatively affect the employment of similarly situated United States workers. [Emphasis added.]
But Trump clarified that in so “tak[in]g into account”, the secretaries have to act “consistent with” the relevant provisions of the Immigration and Nationality Act (INA). Which brings up the questions I intend to address: What are those provisions and do they in fact allow the federal government to take layoffs into account?
Layoffs of American Workers Facilitated by the H-1B Program
But first, what about President Trump’s layoff allegations? Do they stand up?
They most definitely do. The scale of layoffs in recent years by technology companies has been extraordinary. President Trump was apparently referring in his EO to Layoffs.fyi’s findings that technology companies laid off 130,519 employees so far in 2026, 122,606 in 2025, 152,922 in 2024, 265,660 in 2023, and 165,269 in 2022, for a total of 836,976 layoffs during this period, and TrueUp’s findings that the total number of such layoffs was approximately 1,340,000.
Of course, not all of these layoffs involved Americans in the same job categories as incoming foreign workers on H-1B visas (or, for that matter, jobs being outsourced overseas). But many are indeed in the same categories, and we have witnessed such H-1B-facilitated layoffs with depressing regularity over the years:
- In 1995, Clinton administration Secretary of Labor Robert Reich stated that “We have seen numerous instances in which American businesses have brought in foreign skilled workers [through the H-1B program] after having laid off skilled American workers, simply because they can get the foreign workers more cheaply.”
- In 1996, the House Judiciary Committee concluded that “in many instances American employees are being fired and replaced with H–1Bs at lower wages”.
- In 1998, the House Judiciary Committee noted that “Numerous articles in major newspapers have documented employers laying off American workers and replacing them with H–1B aliens,” reporting that “employers [are] actually firing American workers and going to H–1B ‘job shops’ for their replacements” and that “[w]ell-known employers have been cited for this abuse”.
- In 2015, Julia Preston reported in the New York Times that:
Last year, Southern California Edison began 540 technology layoffs while hiring two Indian outsourcing firms for much of the work. Three Americans who had lost jobs told Senate lawmakers that many of those being laid off had to teach immigrants to perform their functions.
Among 350 tech workers laid off in 2013 after a merger at Northeast Utilities, an East Coast power company, many had trained H-1B immigrants to do their jobs, several of those workers reported confidentially to lawmakers.
In 2016, Patrick Thibodeau reported in Computerworld that “Between 200 and 300 Disney IT workers were laid off in January 2015. Some of the workers had to train their foreign replacements — workers on H-1B visas — as a condition of severance.” Leo Perrero testified before the Senate Judiciary Committee’s Subcommittee on Immigration and the National Interest that:
I walked into a small conference room with about two dozen highly respected fellow IT workers. The Disney Executive made a harsh announcement to us all.
All of you in this room will be losing your jobs in the next 90 days. Your jobs have been given over to a foreign workforce. In the meantime you will be training your replacements until your jobs are 100% transferred over to them and if you don’t cooperate you will not receive any severance pay.
Perrero later said on a 2017 CBS News “60 Minutes” segment “You’re Fired” that this “was the most humiliating and demoralizing thing I've ever gone through in my life”. And he said at a Center for Immigration Studies panel discussion that: “The thing that shocked me the most was I didn’t know that it was possible to bring people into our country and physically replace us. … I couldn’t believe that it was possible. I’m just completely shocked that our lawmakers allow this to happen.” Perrero added that “[E]verybody that I tell the story to, whether it’s a hairdresser or my attorney, they’re all completely shocked that this is possible in our country.”
- In 2020, the Department of Homeland Security (DHS) stated that “U.S. companies such as The Walt Disney Company, Hewlett-Packard, University of California San Francisco, Southern California Edison, Qualcomm, and Toys ‘R’ Us have reportedly laid off their qualified U.S. workers and replaced them with H-1B workers.”
It is an uphill struggle for laid-off American information technology workers seeking new jobs. I have written about the rampant age discrimination they have to contend with. As the late Norman Matloff, professor of computer science at the University of California at Davis, explained, employers are attracted to “lower wages generally paid to younger workers (whether domestic or foreign)” and “when employers exhaust the supply of younger American workers, they turn to hiring younger, cheaper H-1Bs in lieu of older, more expensive Americans”. After all, when asked on “You’re Fired” “[W]hy are [H-1B workers] getting the jobs and the Americans … losing them? ... ‘[c]ause it’s cheaper[?]”, Mukesh Aghi, president of the U.S.-India Business Council admitted “That's one factor. Every company is out there to make money with the cheapest possible way itself.”
I have quipped that it certainly seems like Silicon Valley has rebooted the 60’s saying “Don’t trust anybody over 30” — turning it into the mantra “Don’t employ anybody over 35”, and that maybe our tech titans would even like to emulate the 70’s sci-fi classic Logan’s Run, set in a domed city where nobody’s allowed to live more than 30 years.
What Cards Have Congress and the Clinton Administration Dealt President Trump?
Does federal law allow the Trump administration to “take into account … whether the employer sponsor directly or indirectly engaged in layoffs within the previous year or plans future layoffs that negatively affect the employment of similarly situated United States workers”? Unfortunately, in the vast majority of cases, it does not, which is why I had to tell Bloomberg Law’s Andrew Kreighbaum that if DHS seeks to deny employers’ H-1B petitions on the basis of layoffs, or the Department of Labor (DOL) seeks to penalize H-1B employers who have engaged in such layoffs, “Companies are going to sue and most likely win in court.”
The House Judiciary Committee explained in 1998 that:
The most simple, most basic protection that can be given to an American worker is a guarantee that he or she won’t be fired by an employer and replaced by a[n H-1B] foreign worker. … [A]n employer should not in the same instance fire an American worker and bring on a foreign worker when the American worker is well qualified to do the work intended for the foreign worker.
But, as the Committee concluded, “The H–1B program currently contains no such guarantee.” It didn’t then and it doesn’t now.
On April 21, 1998, John Fraser, DOL’s acting administrator for the Wage and Hour Division, Employment Standards Administration, testified before the House Judiciary Committee’s Subcommittee on Immigration and Claims that:
The current H-1B program … does not require U.S. employers who want access to foreign temporary workers to promise not to lay off or displace U.S. workers to fill those jobs with temporary foreign workers. That is why, since 1993, the [Clinton] administration has urged the Congress to include th[is] reform[]. …
[Our proposed legislation] would require employers which seek access to temporary foreign “professional” workers to … attest that … they have not laid off or otherwise displaced U.S. workers in the occupations for which they seek nonimmigrant workers in the periods immediately preceding and following their seeking such workers.
In 1996 and 1998, Congress had the opportunity to protect American workers, but in both instances the House of Representatives voted down common-sense safeguards against H-1B-fueled layoffs. In 1998, the House was prodded by high-tech industry lobbying, the U.S. Senate, and House Republican leadership. I should know — I had a front row seat to Congress’s shocking display of callousness toward American workers while working for the House Judiciary Committee’s Immigration and Claims Subcommittee.
1996
In the 104th Congress (1995-96), I served as a counsel for the House Judiciary Committee’s Subcommittee on Immigration and Claims, working for Chairman Lamar Smith (R-Texas). Chairman Smith, always a champion of protecting American workers from the negative impacts of immigration, was quite exercised about the H-1B program. His omnibus immigration reform legislation (H.R. 2202) contained a provision (that I worked on) to protect American workers from the deleterious impact of the H-1B reform.
The bill as introduced provided that an employer petitioning for an H-1B worker must attest (promise, subject to penalty for noncompliance) that if “within the 6 months preceding the date the [H-1B] alien begins employment” and “within the 90 days following the date the alien … begins employment and for so long as … [the H-1B] visa remains in effect”, the employer has “laid off any protected individual [generally, U.S. citizens, lawful permanent residents, refugees and asylees] with substantially equivalent qualifications and experience in the specific employment for which the [alien] is being sought”, then the employer must “pay an actual wage to the [H-1B worker] that is at least 110 percent of the arithmetic mean of the last wage earned by such laid off employees”. The bill also provided that “In the case of an employer that is a job contractor … the contractor will not place the employee with any other employer unless such other employer has executed an attestation that the employer is complying and will continue to comply with th[is] requirement[] … in the same manner as they apply to the job contractor.”
The Judiciary Committee’s report on H.R. 2202 explained the provision’s goal: to “curtail any possible incentive which may exist currently for employers to lay off Americans because of the lure of cheap foreign labor”, as “If an employer is willing to pay an H–1B a premium wage, then this is evidence that the H–1B is being recruited for reasons of superior skills.” Committee Democrats would have gone farther, urging in the report that “There must be a flat prohibition against laying off American workers and replacing them with H–1B foreign workers.”
H.R. 2202 as reported by the House by the Judiciary Committee included this provision, but limited the protective time frame to “within the period beginning 6 months before and ending 90 days following the date of filing of the application or during the 90 days immediately preceding and following the date of filing of any visa petition supported by the application”.
Why the change? It seemingly makes no sense, because H-1B petitions can be filed as early as “6 months before the date of actual need for the beneficiary’s services”. Thus, the no lay-off protection for American workers would usually expire while an H-1B worker was still employed, opening up the opportunity to lay off American workers. Be that as it may, in negotiations with other nations over the General Agreement on Trade in Services (GATS), the Clinton administration agreed to strictly limit the executive branch’s — and Congress’s — ability to institute additional safeguards for U.S. workers in the H-1B program. The Clinton administration’s specific commitments included that the time span of layoff protection could be no more than “the previous six months” and “the 90-day period following the filing of an application or the 90-day periods preceding and following the filing of any visa petition supported by the application”.
H.R. 2202 as reported modified the job contractor provision to provide that “an H–1B-dependent employer … shall not place [an H-1B worker] with another employer where … the [H-1B] performs his or her duties in whole or in part at one or more worksites owned, operated, or controlled by such other employer, and … there are indicia of an employment relationship between the [H-1B] and such other employer” unless “the other employer has executed an attestation” that it itself will comply with the no-layoff attestation.
The Judiciary Committee’s report explained that the provision was “designed to make sure that employers do not evade the no-layoff provision by simply firing American workers and replacing them with H–1Bs who are technically employees of job contractors.” It further explained that:
Some businesses may likely refuse to sign such an attestation with potentially severe legal consequences for noncompliance just for the privilege of doing business with a job contractor. It is for this reason that the additional attestation is only required with an H-1B dependent job contractor, where the provision, in this limited form, is necessary to prevent wholesale abuse.
What was an “H-1B-dependent” employer? In H.R. 2202 as introduced, it was generally an employer where 10 percent or more of whose (full-time equivalent) workforce was composed of H-1B workers; in the bill as reported, 20 percent (for employers with between 21 and 150 employees) and 15 percent (for employers with more than 150 employees).
Smith’s H-1B reforms died when the entire legal immigration reform title of H.R. 2202 was defeated on the House floor.
1998
Chairman Smith did not give up on his desire to add protections for American workers to the H-1B program. In 1998, when pressure by industry to increase the H-1B cap became inexorable, Smith endeavored to ensure that the increase was temporary and that sufficient safeguards were included. Smith, still chairman of the Immigration and Claims Subcommittee, introduced legislation (H.R. 3736) that accomplished both these things. I worked on the legislation.
The House Judiciary Committee’s report on H.R. 3736 explained that:
The bill provides that an employer cannot lay-off or otherwise displace an American worker and, within a set period (stated in GATS) either before or after the layoff, apply for or petition for an H-1B nonimmigrant who has substantially equivalent qualifications and experience as the American worker in the American’s specialty occupation and for employment in the same geographic area.
Further:
The no-lay off attestation must be designed so that it cannot be evaded by an employer who fires American workers and replaces them with H-1B aliens who are technically employees of the job contractor. The bill thus provides that the contracting firm, as well as the job contractor, must execute a no-lay off attestation.
The no layoff attestation in H.R. 3736 as introduced provided that:
The employer has not laid off or otherwise displaced and will not lay off or otherwise displace, within the period beginning 6 months before and ending 90 days following the date of filing of the application or during the 90 days immediately preceding and following the date of filing of any visa petition supported by the application, any United States worker [U.S. citizens or nationals, lawful permanent residents, and aliens authorized to work] … who has substantially equivalent qualifications and experience in the specialty occupation, and in the area of employment, for which H–1B nonimmigrants are sought or in which they are employed.
Further:
[I]n the case of an employer that employs an H–1B nonimmigrant, the employer shall not place the nonimmigrant with another employer where … the nonimmigrant performs his or her duties in whole or in part at one or more worksites owned, operated, or controlled by such other employer; and … there are indicia of an employment relationship between the nonimmigrant and such other employer[ unless] the other employer has executed an attestation that it satisfies and will satisfy the [attestation’s] conditions.
Committee members James Rogan (R-Calif.) and Chris Cannon (R-Utah) contended that the no-layoff attestation “will add onerous and unnecessary burdens on American businesses” and that “A vast array of employers oppose [it] because it would place them under the scrutiny of the Department of Labor every time they have to make decisions regarding their personnel. This alone would effectively eliminate the use of H–1Bs by many employers.” They further argued that “there is a lack of evidence that there are widespread cases of companies laying off U.S. workers and hiring H-1B replacements”, that “Although anecdotes abound, often it is the same cases that are reported over and over, making the problem seem much larger than it actually is.” Rogan and Cannon also warned that “the decision of one division to layoff U.S. workers at a facility in a metropolitan area, could prevent another division from hiring an H-1B worker at another facility in the same area”.
Silicon Valley engaged in heavy lobbying to strip out the no layoff attestation, along with another attestation requiring employers to recruit for American workers before petitioning for H-1B workers. The American Immigration Lawyers Association proclaimed that H.R. 3736 “would make it so difficult to hire [H-1B workers] that companies would no longer be able to use them to meet short-term, critical needs” and warned that “if the Smith legislation is passed, the [H-1B] program is effectively over”. As my colleague John Miano put it, “I remember in the trade press reading … industry lobbyists saying, over my dead body will this pass. They were saying that — the industry lobby was saying, if we can’t replace Americans with foreign workers, we don’t even want an expansion of H-1B.”
But to the Valley’s astonishment and dismay, on May 20, 1998, the Committee handily defeated by a vote of 7-24 Rep. Rogan’s amendment to strike the no-layoff attestation, with Republicans voting 7-13 and Democrats voting 0-11. The Committee then approved the bill on final passage by a vote of 23-4, with Republicans voting 13-3 and Democrats voting 10-1. The Committee-reported bill’s no-layoff attestation was almost identical to that in the bill as introduced.
Two days earlier, the Senate had passed Sen. Spencer Abrahams’s (R-Mich.) H-1B bill (S. 1723) containing no layoff protections (other than an enhanced penalty for an employer that willfully fails to meet a condition of the H-1B program or makes a willful misrepresentation of a material fact in the course of which the employer lays off a U.S. worker “at the specific place of employment and in the specific employment opportunity”). The Senate Judiciary Committee had earlier defeated on a party-line vote of 10-8 an amendment in the nature of a substitute offered by Sens. Ted Kennedy (D-Mass.) and Diane Feinstein (D-Calif.) containing layoff protections. The bill’s Senate Judiciary Committee report proclaimed that “there is no evidence that H-1B visas are in fact being used” to “lay[] off an American worker in order to hire an H–1B worker with the same skills at a lower salary”. The Congressional Quarterly Almanac reported that no-layoff and recruitment of American worker attestations “were met with something close to revulsion by Smith’s Republican colleagues in the Senate”.
What happened next? Robert Pear reported in the New York Times on July 24, 1998, that “the [Senate-passed] legislation bogged down in the House, prompting Speaker Newt Gingrich [R-Ga.] and other Republican leaders, from both chambers, to meet this week and help work out a compromise”. That’s one way of putting it, “help work out a compromise”. Gingrich — who proclaimed during a 2025 PBS interview that “I am totally for H-1B visas” and “I think you have to almost be willfully rejecting the modern world to be against them” (video at 13:44) — and House Majority Leader Dick Armey (R-Texas) set up negotiations between Smith and Sens.s Abraham and Phil Gramm (R-Texas).
The outcome of the negotiations was a forgone conclusion — Smith would have to reach a “compromise” that protected not American workers but Silicon Valley. The strategy: Blame the Indian “job-shops” for any abuses of the H-1B program and craft statutory safeguards to apply only to them.
But as Norman Matloff wrote in the Huffington Post on February 3, 2017:
A popular tack taken by industry lobbyists and their congressional allies is to blame Indian firms that hire H-1Bs and “rent” them out to mainstream companies. The message is that the Indian outsourcing firms abuse the visa while the mainstream firms use it responsibly. This is pure scapegoating and a veiled appeal to xenophobia. It’s an attempt by Silicon Valley firms to distract attention from their own abuses of the system. The data show that the Silicon Valley firms do indeed underpay their H-1Bs, and individual examples of abuse by household-name firms are disturbing, to say the least.
Even apart from that, the job-shops did and still do much of their business with major American corporations, including major Silicon Valley corporations. Laura Francis and Jasmine Ye Han reported in Bloomberg Law on a Bloomberg Law analysis of 2019 DOL data revealing that “Apple is notable for its heav[y] reliance on H-1B workers brought in from consulting firms. More than a quarter — 4,395 — of the total 15,754 H-1B workers slated to work for the tech giant are employed by outside staffing and consulting companies rather than Apple itself.” Other major corporations contracting for large numbers of H-1B workers included Wells Fargo (5,742), Verizon (4,762), AT&T (4,433), Citigroup (4,065), and Cisco System (2,818).
The job-shops were and are simply catering to the desires of their clients for cheap labor. Thus, the logic of only applying safeguards to the job-shops falls apart. If employers were unable to procure H-1B workers through job-shops, it stands to reason that they would go through the hassle of petitioning for and hiring them directly. They could satisfy their thirst for cheap labor without having to worry about a no-layoff attestation since few would ever reach the proportion of H-1Bs needed to be considered H-1B dependent. As Matloff explained, “The 15-percent threshold applied to all employees, not just programmers and engineers. Most employers would have enough nontechnical workers (marketing people, secretaries, janitors etc.) that even if their programming staff were, say, 50 percent H-1B, they would still not fit the definition of H-1B dependency.”
The compromise laid out that the attestation would only apply to an “H–1B-dependent employer … or by an employer that has been found … to have committed a willful failure or misrepresentation”. Even if the attestation applied, all the employer would have to do would be to “inquire[] of the other employer as to whether, and has no knowledge that … the other employer has displaced or intends to displace a United States worker employed by the other employer”. No need to get the contracting employer to make its own attestation — just make an “inquiry” of the contracting employer’s future plans!
Robert Pear wrote that “Congressional aides said this requirement would not apply to big companies like Microsoft or Sun Microsystems Inc., where foreign workers perform important jobs but account for a small proportion of the work force.”
As bad as this was, it was not enough for Sen. Gramm. He insisted on the inclusion of language exempting even H-1B-dependent employers from the attestation with regard to an H-1B worker “who … receives wages … at an annual rate equal to at least $60,000; or … has attained a master’s or higher degree (or its equivalent) in a specialty related to the intended employment”.
$60,000? That figure was at least facially defensible in 1998. In that year, the Bureau of Labor Statistics (BLS) estimated that 1,624,740 persons were employed either in “computer occupations” normally requiring at least a bachelor’s degree (and thus qualifying for the H-1B program) or as computer engineers. Computer programmers accounted for 573,850 of these jobs (35.3 percent), systems analysts accounted for 552,530 (34.0 percent), computer engineers accounted for 300,830 (18.5 percent), and database administrators accounted for 89,680 (5.5 percent). According to BLS, in 1998, the median annual wage:
- For computer programmers was $49,570 ($30,510 for those at the 10th percentile and $89,860 for those at the 90th percentile);
- For systems analysts was $52,180 ($32,470 for those at the 10th percentile and $87,810 for those at the 90th percentile);
- For computer engineers was $61,910 ($37,150 for those at the 10th percentile and $92,850 for those at the 90th percentile); and
- For database administrators was $47,980 ($28,320 for those at the 10th percentile and $86,200 for those at the 90th percentile).
So, at least H-1B dependent employers would generally have to pay their H-1Bs more than the median wage for these occupations in order to escape the no-layoff attestation.
But there were two flies in the ointment. First, Sen. Gramm did not index his $60,000 figure for inflation. Today, almost three decades later, it remains $60,000 — even though it took $122,764 in July 2026 to equal the buying power of $60,000 in July 1998. According to BLS, by 2025, the median annual wage:
- For computer programmers was $100,390 ($57,710 for those at the 10th percentile and $160,460 for those at the 90th percentile);
- For systems analysts was $105,850 ($67,340 for those at the 10th percentile and $167,710 for those at the 90th percentile);
- For computer engineers was $161,740 ($92,940 for those at the 10th percentile and $225,330 for those at the 90th percentile); and
- For database administrators was $104,620 ($60,230 for those at the 10th percentile and $163,320 for those at the 90th percentile).
Thus, instead of $60,000 generally being higher than the median wage for relevant occupations, $60,000 is now far less than the median — generally about what a worker at the 10th percentile earns! No one can say with a straight face that a $60,000 requirement represents a bulwark against cheap labor.
I should note that by 2025, BLS’s universe of “computer occupations” normally requiring at least a bachelor’s degree plus computer engineers represented 4,041,000 jobs in the American economy. But computer programmers, system analysts, computer engineers, and database administrators accounted for only 758,410 — 18.8 percent — of those jobs (computer programmers accounted for 92,230 jobs (2.3 percent), systems analysts accounted for 519,530 (12.9 percent) computer engineers accounted for 76,660 (1.9 percent), and database administrators accounted for 69,990 (1.7 percent)). In 2025, a newly defined occupation — software developer — accounted for a plurality of the jobs: 1,687,890 (41.8 percent). And the median annual wage for software developers in 2025 was $135,980 ($82,460 for those at the 10th percentile and $214,670 for those at the 90th percentile).
The second fly in the ointment is the master’s degree — or its “equivalent” — exception. An H-1B employer would not even have to pay an H-1B $60,000 to escape the no-layoff attestation if the H-1B had a master’s degree (or its equivalent).
In fact, the large majority of H-1B workers have master’s or higher degrees. U.S. Citizenship and Immigration Services reports that 69.4 percent of the alien beneficiaries of H-1B petitions approved in FY 2025 had master’s or higher degrees (71.5 percent for approved petitions for initial employment). This is up from 40.8 percent in the period from May 11, 1998, to July 31, 1999, which leads one to wonder whether the master’s degree exemption has induced H-1B dependent employers to flock to workers with master’s degree to take advantage of the exemption, regardless of the quality of those degrees.
And many master’s degree programs, in the U.S. and overseas, are of dubious quality. Nancy Sambaiew, deputy assistant secretary for visa services, Bureau of Consular Affairs, at the U.S. State Department, testified at a May 1999 hearing of the Judiciary Committee’s Subcommittee on Immigration and Claims that “a school in the United States can be found for even the poorest academic achiever”, and thus “schools that actively recruit foreign students for primarily economic reasons, and without regard to their qualifications or intentions, may encourage such high-risk underachievers to seek student visa status as a ticket into the United States”.
In 2011, Rep. Smith, then chairman of the House Judiciary Committee, stated during a hearing of the Committee’s Subcommittee on Immigration Policy and Enforcement, that:
[A]ll graduate degrees are not the same. It takes an average of over 7 years in graduate school for STEM students to receive a doctorate. A master’s can be earned in 2 years.
And when it comes to the proportion of persons who have applied for patents, those with doctorates far outpace those with bachelor’s and master’s degrees. Sixteen percent of scientists and engineers with doctorates working in STEM fields have applied for patents, compared to only 2 percent with bachelor’s degrees and 5 percent with master’s degrees.
What was the Clinton administration’s position on the House and Senate legislation? As I have mentioned, Labor Secretary Robert Reich had expressed his concern regarding H-1B-facilitated layoffs, DOL’s John Fraser testified that the administration had been advocating for layoff protections in the H-1B program since 1993, and the administration secured the U.S.’s ability to institute such protections in the GATS treaty (though only for an extremely circumscribed duration). Then, on July 16, 1998, President Clinton’s press secretary issued a statement warning that:
If Congress sends the President a bill that increases the cap on H-1B visas but does not contain (1) a significant training component and (2) meaningful reform to the H-1B program that ensures that employers recruit U.S. workers before applying for an H-1B worker and not lay off a U.S. worker in order to hire an H-1B worker, the President’s senior advisors will recommend that he veto the bill.
However, at the same time, the Clinton administration did not want to alienate Silicon Valley. The Congressional Quarterly Almanac reported that “The [H-1B] visa issue was a difficult one for the White House because it had the potential to alienate key Democratic constituencies on opposite sides of the issue. The administration has traditionally been allied with organized labor but has not wanted to alienate its supporters in Silicon Valley.”
Republicans tried to take advantage of Clinton’s dilemma. On August 6, 1998, John Simons reported in the Wall Street Journal that:
High-tech executives … have met with House Speaker Newt Gingrich … to push the issue. Some GOP strategists see the situation as an opportunity to drive a wedge between politically influential Silicon Valley and the White House — particularly Mr. Gore, the administration's leading high-tech proponent and a likely presidential candidate in 2000.
The Congressional Quarterly Almanac reported that “[s]cheduled for a vote in both [the House and the Senate on] July 31, the [compromise] measure … was pulled from the calendar under threat of a veto” and that “The administration objected to the compromise on the same grounds that it opposed a version … passed by the Senate on May 18: that it would not provide enough protection for American workers.”
The H-1B negotiations were restarted, this time with the inclusion of the Clinton administration. Sufficient changes were then made to assuage the administration, but the White House did not insist on robust layoff protections, and the feeble layoff protections in the bill were not made robust.
The revised compromise was brought to the House floor on September 24, 1998. Many House and Senate Democrats were upset with the Clinton White House. U.S. Rep. Ron Klink (D-Pa.) complained on the House floor that “The White House worked this out. They did not talk to those of us in the House, except to advise us what the deal was that they had made. No one consulted us, no one asked us what we thought, what we needed. We were not a part of putting this legislation together.” He further stated that “This is about catering to high-tech industries, and a very formidable political voice, right before we have an election. If it is bipartisan, then both parties are guilty of doing it.” U.S. Rep. Peter DeFazio (D-Ore.) criticized the compromise, stating: “You are screwing the[ American people] going and coming. You are going to bring in people to fill the jobs [of the future] you promised them when you took away their [industrial base jobs, the family wage jobs, the jobs with benefits].”
U.S. Rep. Dana Rohrabacher (R-Calif.) also opposed the compromise, stating that “This is not about a shortage of qualified American workers; it is about pacifying a powerful big business interest who is trying to secure cheap foreign labor.” Rohrabacher added that “we cannot really blame” high-tech corporations for attempting to “hire cheaper foreign labor” through the H-1B program as “[t]hat will add to their profit” and “they represent[] the interest of their stockholders”. But he admonished the House that Congress is “not supposed to be representing the interest of their stockholders, we are supposed to be representing the interests of the American people and the United States”.
U.S. Rep. David Dreier (R-Calif.), chairman of the House Rules Committee’s Subcommittee on Rules and Organization of the House, explained that under rule (H. Res. 513), “[i]n lieu of the amendment recommended by the Committee on the Judiciary … [an] amendment in the nature of a substitute” would “be considered as adopted”. Rep. Dreier stated that the amendment “consists of the text of the compromise agreed to last night by [Sen. Abraham] … who has worked tirelessly on this issue, the Clinton administration, and [Lamar Smith] … chairman of the Subcommittee on Immigration”, a compromise that was “crafted through intense bipartisan negotiations over the past 2 weeks”. While Dreier labeled the substitute “a very, very good compromise”, in fact the only group being compromised was American workers.
Rep. Dreier emphasized the job shop focus of the layoff protection “addresse[d] the very legitimate concerns raised about the actions of a tiny minority of companies that abuse the H1B program” (emphasis added) and added that “Companies that hire a significant number of H1B workers will be subjected to unprecedented scrutiny by [DOL] to ensure that … H1Bs are not taking jobs from Americans.” Rep. Rogan added that the compromise “protects American workers from abuses such as being laid off or being replaced by a foreign worker, and it achieves this without creating a huge enforcement bureaucracy at [DOL]”. Rep. Tom Campbell (R-Calif.) argued that:
[The substitute] cuts the compromise just about right. It realizes that the people who are laid off in categories are different from the categories where the H-1B visas are being hired. They are simply not the same. … [T]he layoffs tend to be in the fabrication side, and the H-1Bs tend to be in the engineering side.
U.S. Rep. Zoe Lofgren (D-Calif.), a member of the Judiciary Committee who represented Silicon Valley, asserted that the compromise contained “the toughest enforcement that has ever been devised … oriented towards those who are the wrongdoers primarily in abusing American workers”, including “[v]ery heavy attestation requirements”.
There was no validity to any of these claims. Under the compromise, many companies could hire a significant number of H-1Bs without reaching the 15/20 percent thresholds, and even H-1B-dependent companies could simply hire aliens with master’s degrees or at $60,000 a year to avoid the no-layoff prohibition. Many American workers had indeed been laid off and replaced with H-1B workers in the same occupational categories.
As Rep. Klink stated on the House floor, the “compromise provides protection for only a small percentage, about 1 percent, of the H-1B workers that are going to be brought into this country”.
U.S. Rep. Mel Watt (D-N.C.), also a member of the Judiciary Committee, stated that the compromise “requires th[e no layoff and recruitment] attestation of only a very small group of employers … [while e]verybody else in the world can bring in their H–1B employees without making those certifications”.
U.S. Rep. Howard Berman (D-Calif.), also a member of the Judiciary Committee, stated that:
[T]o say that huge numbers of the employers who will utilize these H-1B workers … do not have any meaningful constraints on their ability to displace a U.S. worker in order to bring in a temporary nonimmigrant visa is wrong fundamentally. … [A] company that employs 5,000 people but has only 600 H-1B workers would not be obligated to provide any of the attestation requirements. … That makes no sense to me. … We could be talking about some enormous employers with substantial numbers of H–1B employees.
And U.S. Rep. Xavier Becerra (D-Calif.) stated that “[W]e are going to have a vast number of companies that will be able to skirt the law, bring in foreign workers, and deny American workers the opportunity to get good paying jobs.”
U.S. Rep. Louise Slaughter (D-N.Y.), member of the Rules Committee, argued against the rule, which “thr[ew] out the crafted consensus bill reported by the Committee on the Judiciary by a 23 to 4 vote; that is right, a 23 to 4 vote”. She stated that “One might have thought that the legislative process had worked [in the Judiciary Committee], producing a bill that addresses a problem and it could be enacted into law. But … the Committee on Rules majority decided that [Judiciary’s] work … could be discarded at its whim.”
Rep. Watt then put on a masterclass in minority-party House floor maneuvering. Since the Republican-controlled Rules Committee was only going to allow Democrats one amendment, Watt convinced Democrats to coalesce around an amendment offering the Lamar Smith-written/Judiciary Committee-passed bill as a substitute (along with a new H-1B fee to fund “assisting States in providing grants to eligible students enrolled in a program of study leading to a degree in mathematics, computer science, or engineering” and for DOL “demonstration programs or projects to provide technical skills training for workers”). And that was the Democrat amendment that the Rule permitted.
As the saying goes, this was rich in irony. Rep. Watt stated that:
[I]nstead of me being the minority opposing what the majority of our committee did, I find myself in the very unique position of being on the floor of the House defending what the Committee on the Judiciary did by a 23 to 4 vote, bipartisan, with the chairman of the subcommittee having gone on and being told to support some other bill. …
We had [an] attestation that 23 Members of the Committee on the Judiciary said was a good way to protect against abuses, and we are throwing it in the trash can.
Rep. Watt argued that:
[I]f we are going to expand the numbers of authorized people who can come in under th[e H-1B] program, then we also ought to expand the protections for U.S. workers and the guarantees that employers have to provide that they are neither displacing a U.S. worker, laying off a U.S. worker or having not sought to obtain a U.S. worker.
He concluded that “And that is exactly what the Committee on the Judiciary set out to do, and it did it masterfully.” Mr. Watt, if you are reading this, I want to say that while I was never in a position in the past to thank you for that comment, I am doing so now!
Watt did express sympathy for Rep. Smith, stating:
I understand the predicament that [Mr. Smith] is in. I suspect he would rather be supporting my substitute than the bill that he is on the floor with, so I do not envy his position. He has worked hard on this bill. … I want to just empathize with my friend, the gentleman from Texas. He has gotten a bill shoved down his throat, just like we are having a bill shoved down our throats.
U.S. Rep. John Boehner (R-Ohio), future speaker of the House and then Republican Conference chair, also expressed sympathy for Smith (if possibly of dubious sincerity), stating that “The gentleman from Texas really does deserve a big pat on the back for laboring through a lot of slings and arrows from a lot of different directions over the course of this year.” Rep. Campbell stated (with complete sincerity) that “Lamar Smith is a friend of mine, and he has gone farther than perhaps he wished to go. I know how far he has gone in order to bring a bill to the floor that will meet the approval of a majority of this body and the President of the United States.”
What did Smith say? He was gracious as ever, the consummate gentleman:
[W]ith the assistance and support of the House leadership, we wrote a workable compromise.
The measure we are considering today … of course, … is a negotiated agreement. That is the nature of any legislative process. What is important is that we have come up with a bill that both responds to the needs of the high-tech industry and adds protections for American workers.
[T]his is a bill that is supported by both the Republican leadership and the administration.
He stated that:
[T]he bill we are considering on the floor today represents a good faith compromise between differing H-1B measures, one passed by the Senate and one passed by the House Committee on the Judiciary. It is not perfect, but compromises seldom are. What the bill does do is take a middle role between varying viewpoints as to the H–1B visa program.
Smith continued:
The H–1B program is being abused by firms known as job shops or job contractors. These companies do not bring in a few H-1B aliens a year to plug skill gaps in their work forces. Instead, many, and sometimes all, of their personnel are in fact H-1B workers. Job contractors make no pretense of looking for American workers. They are in the business of contracting out their H-1Bs to other companies. The companies to which the H-1Bs are contracted benefit by paying wages to the H-1Bs often well below what comparable Americans would receive. In order to achieve this benefit, they have been known to lay off American workers and replace them with H-1B foreign workers from job contractors. In order to stem this abuse, H.R. 3736 requires job contractors … to not lay off Americans and replace them with foreign workers, and to not contract H–1Bs to other companies who use them to replace other American workers.
Other employers who use a relatively small number of H-1Bs will not be affected, unless they have been found to have willfully violated the rules of the H-1B program.
We are going to protect American workers, and, in fact, we are going to target the companies that have in fact been the abusers in the past. So there are lots of protections for the American workers in the bill.
As to the Watt amendment, Rep. Smith stated “I urge my colleagues to vote against this amendment”.
The House did defeat the Watt amendment by a vote of 177-242, with Republicans voting 21-201, Democrats voting 156-40, and independent Bernie Sanders (I-Vt.) voting nay. The House then approved the bill by a vote of 288-133, with Republicans voting 189-34, Democrats voting 99-98, and independent Bernie Sanders (I-Vt.) voting nay. In order to avoid a Senate blockade by Sen. Kennedy, the bill was placed in H.R. 4328, ‘‘Making Omnibus Consolidated and Emergency Supplemental Appropriations for Fiscal Year 1999’’, which was signed into law by President Clinton as Public Law 105–277.
The Aftermath
In 2017, Edward Hugler, the Trump administration’s acting secretary of Labor, responded to a letter sent by Sen. Charles Grassley (R-Iowa) and other senators following the airing of “You’re Fired”, a letter that had inquired as to whether “an investigation into the companies highlighted … and their abuse of the H-1B visa program [had] been initiated”, whether “a review of [DOL] policies and procedures … that allows for this kind abuse has been initiated”, what “loopholes and ambiguities … can be fixed by regulation or other executive action”, and “What steps are you taking … to initiate necessary administrative action to fix the worst abuses in the H-1B visa program?”
In his response, Acting Secretary Hugler explained that federal law “only prohibits H-1B dependent employers from displacing U.S. workers employed by the secondary entity within the statutorily set period” and further that “a dependent employer may displace U.S. workers employed by the secondary entity regardless of the timing of the H-1B worker’s placement, provided the H-1B replacement … will receive at least $60,000 per year or has attained a relevant master’s degree”.
Acting Secretary Hugler concluded that “This limitation will have to be carefully considered in determining whether reasonable cause exists for an investigation.” Of course, Hugler’s assessment accurately reflects the handcuffs that a Republican-controlled Congress and a Democrat-controlled executive branch placed on DOL in 1998, handcuffs that exist to this day. Hugler’s assessment accurately reflects that Congress and the Clinton administration had sided with employers seeking cheap foreign labor, no matter what proportion of their workforces were composed of H-1B workers, and sided against American workers.
As Shakespeare might say the fault is not in our stars, but in our Senate and House (though this does not apply to Sen. Grassley, who has long been a stalwart advocate for H-1B reform and has, along with Sen. Dick Durbin (D-Ill.), long championed legislation imposing a no-layoff prohibition on all H-1B employers).
At long last, a president has decided to stand up for American workers. It could have been President Clinton, but that was not to be. I guess Clinton would defend himself by saying that it depends on what the meaning of “getting laid-off” is. It is President Trump who is standing up for American workers. As he stated in his EO, “the policy of the United States” will be for “all relevant agencies [to] implement appropriate measures to protect American workers from abuse of the H-1B program and ensure that the program serves the national interest”. Maybe at long last Congress could stand up with him. I am not holding my breath.