President Donald Trump will sign an executive order Tuesday that revamps the H-1B skilled worker visa program and puts IT outsourcing giants like Tata Consultancy Services, Infosys and Cognizant in the crosshairs.
The random lottery H-1B system has violated the principles of the H-1B visa program by allowing employers to bring in lower-skilled workers at well below market rates to replace American workers, according to the Trump administration.
The executive order from President Trump will shift the H-1B visa program away from a lottery system weighted toward lowest wage workers to a system that prioritizes higher-skilled, higher paid workers. That shift would make it much more difficult for outsourcing giants to replace American workers, according to the Trump administration.
The use of the skilled worker visa program is dominated by a handful of outsourcing giants with ties to India.
President Trump will announce the H-1B executive order Tuesday during a visit to Kenosha, Wisc.-based tool manufacturer Snap-On Inc. Trump will also instruct federal agencies to examine their purchasing systems to more effectively favor buying American goods in federal contracts.
Some 80 percent of H-1B workers are paid less than the median wage in their fields, according to the White House, while just 5 percent of H-1B visas go to the workers in the Labor Department's highest wage tier.
"People, probably in their heads, think most H-1B visas are going to these romanticized, high-skilled firms that are pioneering the technology of the future – [and] not [to] contract workers," a senior Trump administration official said late Monday, according to a transcript of the briefing.
"Companies like Tata, Infosys, Cognizant will apply for a very large number of [H-1B] visas … by putting extra tickets in the lottery raffle," the Trump administration official said. "You have contracting firms that are not skills employers, that often times use workers for entry-level positions, and they capture the lion's share of H-1B visas."
The official told reporters that those three companies have an average wage for H-1B visas of between $60,000 and $65,000, well below the $150,000 earned by the median Silicon Valley software engineer. The remarks weren't intended to be a criticism of Tata, Infosys and Cognizant, the official said, but rather a criticism of the current the H-1B visa program.
"We're going to switch away from a random lottery system in which it's weighted toward the lowest wage workers towards a system that prioritizes higher-skilled, higher-paid workers, which would make it much more difficult to use it [the H-1B program] to replace American workers," said the official, who gave the briefing on the condition of anonymity.
Tata, Infosys and Cognizant didn't immediately respond to requests for comment. Infosys and Tata were the two biggest users of the H-1B visa program in the U.S. government's 2016 fiscal year, which ended Sept. 30, applying for 25,405 and 13,134 visas, respectively, and offering an average salary of $81,705 and $76,099, respectively, according to U.S. Department of Labor data compiled by Myvisajobs.com.
Cognizant, meanwhile, was the ninth biggest user of the H-1B program in 2016, applying for 5,370 visas and offering an average salary of $74,628. All told, 236,000 H-1B applications were submitted for 85,000 available slots in 2016.