H-1B Visa Halt: How Will Trump’s Decision Impact Your Business Goals?

It is a well-known fact that certain US business sectors have more job vacancies than they can fill with domestic talent, forcing companies to cast their recruiting nets farther abroad. But H1B visa abuse by some tech companies has caused the current administration to freeze the H1B, at least through the end of 2020.

The freeze could have serious repercussions for businesses relying on filling critical vacancies with foreign workers. But there are ways to get around the freeze and hire foreign workers, despite the changing laws and regulations.

H1B Visa Requirements

The H1B is a specialty visa granted on a temporary basis to workers with exceptional skills, abilities, or merits. It is not intended for long-term immigrants, although many H1B holders use their status to put down roots in the US and later apply for a green card.

To qualify for the H1B, foreign workers must meet certain requirements:

  • The job must demand highly specialized skills and knowledge
  • The employer must require job candidates to hold a bachelor’s degree or higher
  • The applicant must have the equivalent of a US bachelor’s degree or higher in the specific occupational specialty

Ironically, fashion models also fall under the umbrella of the H1B visa. To meet eligibility requirements, the model must possess “distinguished merit and ability.”

Why the Trump Administration Targeted H1B Visas

It is no secret that President Trump has conservative views on immigration. His campaign slogan, “Make America Great Again,” highlights his America-first philosophy. And after decades of outsourcing by US companies who sent hundreds of thousands of American jobs overseas to exploit low-paid foreign labor, many Americans support Trump’s position.

In particular, a disproportionate number of H-1B visas are granted to tech workers from India who are willing to work for much less than their American counterparts. In 2019, 225,000 H1B applicants competed with US workers for a mere 85,000 jobs.

Silicon Valley tech companies are especially guilty of prioritizing foreign tech workers over domestic employees. And as recently as June of this year, just days before the freeze went into effect, a Facebook employee leaked an internal HR document that exposed FB’s policy of prioritizing H1B workers over US citizens.

On June 22, 2020, the White House released its proclamation suspending H1B visas until the end of the year, citing high unemployment in the US. In an election year, US jobs are always a political talking point, so it is no surprise that the H1B visa news is being used by the Trump campaign to garner political support from disgruntled voters.

Covid-19 and H1B

Massive job losses in the US due to Covid-19 lockdowns give additional impetus to the President’s immigration policies. With American businesses taking a hard hit and Wall Street facing record lows, it seems counterintuitive to open US borders to foreign workers when so many American workers are unemployed.

Moreover, travel restrictions have been put in place to prevent the spread of the virus. Allowing foreign workers to enter the US heightens the threat of Covid-19 to a nation that has already registered widespread infections and suffered thousands of deaths.

How the H1B Freeze Affects US Businesses

The freeze, which also covers H1A visas and J1 short-term visas, is projected to impact as many as 525,000 foreign applicants, including 170,000 permanent resident green card applicants. In addition to highly skilled tech workers, the freeze applies to non-agricultural seasonal labor, nannies and au pairs, and high-level business executives.

Many American businesses are already hiring more US citizens to offset the freeze on H1B visas. Because the halt is temporary, most companies see it as a short-term inconvenience whose impact will be minimal in the long run. Nevertheless, certain businesses will feel the pinch more than others, and some will look for ways to circumvent the new regulations imposed by the Trump administration.

Employment sectors that are most likely to be affected by the H1B visa restrictions include:

  • The medical sector, that predicts a potential shortage of nearly 140,000 doctors over the next decade.
  • The IT industry that typically relies on foreign employees to fill the qualification gap in skilled US tech jobs.
  • Companies with key US employees located abroad, that may experience retaliation from foreign governments.
  • Companies that currently employ H1B workers whose families are banned from joining them in the US due to the visa freeze.
  • Research ventures, including the US Department of Defense (DOD), that collaborate with foreign scientists and researchers.

Getting Around the H1B Freeze

When it comes to getting a visa, H1B is attractive to educated foreign workers, but even more so to businesses, enabled to hire savvy experts from outside the country.

For businesses, H1B applicants provide a motivated pool of skilled and educated workers. Not to say they become unavailable after the events of 22nd June, 2020, when the Trump administration blocked work visas, five of them altogether. This is the case when a global PEO provider comes into play, letting businesses keep their pace and avoid losing momentum by hiring the same talent overseas.

If hiring globally was an option in the past, it is a business imperative today. One of the most effective solutions for getting around the H1B freeze is to partner with an international employer of record (EOR) like Acumen International. While the visa block shuts down your access to highly skilled talent, an international PEO solution opens a new opportunity window for you in the form of limitless access to a vast variety of global expert talent.

A global PEO solution enables your company to support and employ skilled remote professionals without the limitation of proximity or geography. Retain employees that were denied the H1B visa, whether it is their home country or any other of the 190 countries we support.

We simply draw a tax and law-compliant employment contract that allows your worker of choice to continue operating as usual. We deal with related benefits, payroll, tax, and accounting issues accordingly. Once your employees get the H1B visa again, in the future, we will transfer them off our service and you’ll hire them directly.

Acumen International, Your Global HR Partner

In addition to H1B visa restrictions limiting entry to the USA for foreigners, the ever-evolving and changing laws, regulations and requirements in multiple countries pose enormous challenges for international employers. Acumen International is a global employment service provider in over 190 countries. We manage legal issues, payroll, benefits, taxes, and other HR challenges faced by businesses with a growing global workforce.

Partnering with Acumen ensures your company remains compliant with the multitude of regulations and requirements that affect businesses, so you can confidently continue to facilitate your business and hire the very best talent to meet your needs.

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