How President-Elect Trump’s Immigration Plan Would Impact Employers & Entrepreneurs

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There’s been a lot of forceful soundbites from Donald Trump on immigration during his Presidential campaign but it’s yet to be determined how much of that rhetoric will transform into actual policy.

From a logistical perspective, the Department of Homeland Security, who issues immigration benefits and enforces immigration rules, may be faced with changing course on how they evaluate immigration cases.  It’s not uncommon for Presidents to issue guidance and directives to federal agencies, including the Department of Homeland Security, on what priorities to focus.  While a President can issue executive orders, executive orders that unilaterally alter existing federal regulations might be challenged in court as an abuse of power.

  • Immigration laws require Congressional approval to amend
  • Immigration regulations issued from federal agencies require public notice and comment before being finalized as regulations. Any regulatory reversals would also require public notice and comment before being finalized.

As of today, November 9th, here’s what we do know in terms of where Trump stands on immigration that would significantly impact U.S. employers and foreign entrepreneurs based on his August 31, 2016 10-Point Speech on Immigration.  (Keeping in mind that these policies were largely crafted by conservative-leaning immigration reform groups.)

 

NAFTA and TN Visas

Trump has lambasted NAFTA as a terrible trade agreement that hurts the U.S. and has promised to renegotiate better terms for the U.S. or otherwise withdraw if those new terms aren’t met.

Under the North American Free Trade Agreement entered into by Canada, Mexico and the U.S., in 1994, a new professional visa category (TN visa) was created to enable Canadians and Mexicans to enter the U.S. and fulfill certain occupational work here. The Agreements allows for any party to withdraw under Article 2205, by providing written notice six months in advance to all parties.

Impact to Employers: If the U.S. pulls out of NAFTA, it is possible employers may have to find alternative work options for TN employees in the U.S. (and for U.S. employees working in Canada or Mexico in TN status).  The timeline could be as early as 2017Q3 but more will be revealed….

 

H-1B Visas

As I previously indicated here, Trump wants to impose new requirements for all immigration-related visas, particular for the H-1B, by requiring employers to first test the labor market by 1) attempting to fill any open positions with U.S. workers first before hiring foreign workers and 2) by requiring employers to pay a certain prevailing wage level.  This is consistent with the 10th point of his 10-Point Ideal discussed in his August 31, 2016 speech:

We will reform legal immigration to serve the best interests of America and its workers

…The time has come for a new immigration commission to develop a new set of reforms to our legal immigration system in order to achieve the following goals:

  • To keep immigration levels, measured by population share, within historical norms
  • To select immigrants based on their likelihood of success in U.S. society, and their ability to be financially self-sufficient. We need a system that serves our needs – remember, it’s America First.
  • To choose immigrants based on merit, skill and proficiency
  • And to establish new immigration controls to boost wages and to ensure that open jobs are offered to American workers first.

Employers currently already must meet prevailing wage standards in order to be approved for an H-1B visa for an employee.  While this new labor market test would be an added requirement, it must first jump through a few hurdles.  It’s unknown exactly how the labor market test will be structured, but if it’s anything like the current process for PERM, the Department of Labor may have to get involved in evaluating the sufficiency of each employer’s labor market test.  In this scenario, we’re talking months of delay due to increased backlogs and more work for any federal agency will likely mean more funding will have to be diverted to fund those operations.

It would be interesting to see, logistically, how these new requirements would be implemented; either via federal regulatory change (requiring public notice and comment) or congressional amendment to the Immigration and Nationality Act.

Impact to Employers: If Congress gets involved and passes an amendment to the law, then employers may have to follow these new requirements very quickly.  New requirement to meet certain wage requirements may actually end up producing a law that would pay foreign workers more than actual U.S. workers!  Additionally, the requirement to advertise for U.S. workers before being able to apply for the H-1B petition may delay innovation and corporate expansion.  As a result, multinational companies may consider offshoring jobs if the burden to hire qualified workers in the U.S. is too high.

 

Update 11/10/2016: H-4 Spousal EADs

Part of President Obama’s Execution Action involved enabling spouses of certain H-1B visa workers to apply for work authorization.  H-4 spouses, as they are called, could receive employment authorization documents (EADs) that would enable them to work for any U.S. employers of their choosing.  At that time, USCIS had proposed a change in regulations, made the rule available for public notice and comment, reviewed the comments and then issued a final rule as required by the Administrative Procedures Act.  In May 26, 2015, the rule went into effect.

President-Elect Trump has stated he would “cancel every unconstitutional executive action, memorandum and order issued by President Obama” within his first 100 days in office.  If he orders USCIS to reverse course on EADs for H-4 spouses, then USCIS would have to follow the same procedures it did two years ago in notifying the public, requesting comment, reviewing comment and therefore issuing a final rule.  This may take time and likely any rule eliminated the EAD category for H-4 spouses may likely be prospective and not retroactive.

Impact to Employers: Workers who hold an EAD based on their qualified H-4 status may possible lose the ability to continue to work after their EAD expires.  Employers may have to evaluate staffing needs in the next six – eight months, in preparation for this potential outcome.

 

DACA Employees

Trump has not been shy about wanting to reverse much of President Obama’s executive actions, including the Deferred Action for Childhood Arrivals (DACA) program that enabled eligible undocumented children who entered the U.S. before their 16th birthday to apply for work authorization.

It would be within a new President’s powers to reverse the previous Executive Action as quickly as January 20, 2017, when the new President is sworn into office.

Impact to Employers:  Employers who currently employ DACA workers may find themselves short-staffed as early as late January 2017 if DACA is rescinded by President-Elect Trump.  This is particularly alarming, as U.S. Citizenship & Immigration Service has received more than 1.54 million applications since the inception of the DACA program in 2012 and has approved more than 1.45 applications since then.  It’s unclear how many U.S. employers would be impacted by this policy change but data will likely reveal itself in the upcoming months.

 

Startup Visa for Entrepreneurs

President-Elect Trump has voiced little about a start-up visa for entrepreneurs.  As a serial entrepreneur himself, one would imagine he would appreciate the values and benefits that entrepreneurship carries with it.  Not so, as it appears at odds with his stance on isolation and populism. Further, even if entrepreneurs were allowed to enter the U.S. via a special visa,  if the entrepreneur stems from a country that has been historically (or is now) affected by terrorism, that that entrepreneur might now be subject to aggressive “vetting” despite their efforts, desires or ability to create U.S. jobs.

As an aside, the U.S. Citizenship & Immigration Service had announced on September 1, 2016, the Parole for Entrepreneurs as a means to allow certain eligible, high-growth entrepreneurs to enter the U.S. to operate their business.  Comments had closed on October 17, 2016 and it’s still up in the air whether USCIS can review the public comments quickly enough to enact a final rule for the regulation to go into effect before January 20, 2017. If the regulation were to go into effect that quickly (although unlikely), the regulation could still be reversed in the future, but not without first having to go through various administrative hurdles.

Impact to Entrepreneurs: We won’t know if the Parole for Entrepreneurs will go into effect, only to be later reversed, or if it will go into effect at all.  We also won’t know if the President-Elect will push forward a startup visa bill for Congress to pass that would jump-start innovation.  We’ll have to have wait and see what the next administration brings.

***

As a general aside, the rhetoric from Trump about deporting millions of undocumented immigrants in the U.S. is not typically a topic that is discussed on this website.  However, it’s important to understand that a policy of this magnitude and impact would require significant taxpayer funding; funding that would need to be appropriated by Congress to support and execute.  It’s yet to be seen if the U.S. has room in its budget to finance this policy endeavor.

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