Trump takes on outsourcing

President Trump plans to sign an executive order on Tuesday meant to rein in abuses in a visa program that lets some companies replace American workers with foreign ones.

The order would target so-called H-1B visas, which Congress created in 1990 as a way to help companies that can’t find highly skilled technical workers hire foreigners able to do the job. Many companies still abide by the intent of the program, but others seem to be using H-1B visas simply to replace American workers with foreigners willing to work for less.

“We’re taking a more vigorous stance in enforcing violations of the H-1B program,” a senior Trump administration official told reporters on Monday. “We want to make sure guest worker programs don’t become a way of replacing American labor at less cost.”

Big companies including Disney (DIS), Oracle (ORCL) and Cisco (CSCO) have generated controversy by using H-1B workers from countries such as India to do work previously done by Americans, which is not how the program is supposed to work. The law includes stipulations meant to assure that foreigners willing to work for less don’t put Americans out of a job. But there are loopholes, such as outsourcing work to an outside company, which might be the one employing the foreign workers on H-1B visas. So the American workers lose their jobs, the outsourcing firm pays foreigners less than the original workers earned, and the company outsourcing the work saves money.

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