What Really Is The ‘Buy American, Hire American’ Order And Will It Impact Indian Professionals?

Srikanth Ramakrishnan

Apr 20, 2017, 07:03 PM | Updated 07:03 PM IST

Donald Trump (Scott Olson/Getty Images) 
Donald Trump (Scott Olson/Getty Images) 
  • The ‘Buy American, Hire American’ order would not have any direct effect on H-1B visas in the short term, but is rather being enforced to encourage government agencies to give priority to American companies when awarding contracts.
  • A lot has been said about United States President Donald Trump’s new executive order titled ‘Buy American and Hire American’ (BAHA) order. There is a lot of apprehension about its impact on H-1B visas and employment of foreign nationals in the United States (US). So what exactly is happening?

    Here is a short guide to the entire issue.

    What is an H-1B visa and how is it issued?

    The H-1B visa is a non-immigrant visa that allows an employer in the US to employ foreigners in speciality professions for a period of up to three years. In case the employee is no longer employed with the employer who sponsored the visa, he/she must either change the visa type or find another employer or leave the country.
    Speciality professions are defined as those which require theoretical and practical application of a body of highly specialised knowledge in a field. About 85,000 H1-B visas are released in a year, often running out in no time. As per the Department of Homeland Security (DHS), 69.7 per cent of H1-B visas are issued to Indian nationals.

    Of the total number of visas issued, 65,000 are issued to skilled workers with a college degree and the remaining 20,000 to those with higher training. The selection of applicants is done randomly using a computerised lottery system.

    Now, what does Trump’s BAHA order state?

    The order clearly defines ‘American’ and what can be classified as American when buying and who can be classified as ‘American’ while hiring. (Full text of the order is here)

    Buy American refers to goods, products and materials produced or manufactured in the United States. It pertains to goods produced in the United States, especially iron and steel products, and goods that are entirely processed within the US - right from the melting to the application of the final coating, as defined in the order.

    Petition beneficiaries are foreign nationals hired under the H-1B visa. Workers in the US and US workers are defined as either US citizens or foreign nationals who have permanent residency, seek asylum, have been granted refuge or those who have been authorised to work.

    The policy to be followed under BAHA requires federal departments of the US government to create jobs for the American middle class and support domestic manufacturing and defence establishments. Further, it seeks to enforce laws that bar skilled and non-skilled aliens from entering the US unless they are certified to work under Section 212 (a)(5) of the Immigration and Nationality Act.

    The Secretary of Commerce would have to develop guidelines within 60 days for agencies to assess compliance levels of the order within 150 days of it being passed, as well as assess free-trade agreements.

    Will BAHA have any impact on H-1B visas or the number of visas issued?

    No. Trump has not capped the number of visas, or made any alterations there. What the order will do is merely ask government bodies to look at domestic employees as well as procure domestic goods and materials. There is no direct action to effect in this direction, but there is an invitation for reform proposals from US agencies in view of the programme. The goal is said to be an eventual move away from the existing random lottery system to one that favours higher-skilled, higher-paid workers.

    The Bottom Line

    The bottom line here is that BAHA would not have any direct effect on H-1B visas in the short term, but is rather being enforced to encourage government agencies to give priority to American companies when awarding contracts, with a review of waivers and exemptions that allowed the use of foreign-made products.

    However, the United States Citizenship and Immigration Services (USCIS) passed a new policy earlier this month that will take effect from 1 October 2017. Under the new policy, techies do not qualify by default for an H-1B visa. Only those who can demonstrate that their skill-set can be considered a speciality occupation will qualify for the H-1B visa.

    Srikanth’s interests include public transit, urban management and transportation infrastructure.

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