White House Orders Federal Contractors to Limit Their Use of Foreign Workers

President Trump signed an executive order on Monday that requires agencies to review their procurement practices to ensure that only U.S. citizens and nationals are working on federal contracts.

The order is aimed at protecting Americans’ jobs as the United States faces an economic recession as a result of the novel coronavirus pandemic. While it reflects the federal government’s increased reliance on contractors and the Trump administration’s priorities, some experts say there are lingering questions on how it will be implemented.  

“It is the policy of the executive branch to create opportunities for United States workers to compete for jobs, including jobs created through federal contracts,” the order stated. “These opportunities, particularly in regions where the federal government remains the largest employer, are especially critical during the economic dislocation caused by the 2019 novel coronavirus pandemic. When employers trade American jobs for temporary foreign labor, for example, it reduces opportunities for United States workers in a manner inconsistent with the role guest-worker programs are meant to play in the nation’s economy.” 

The order requires the heads of each agency and department to review the contracts they awarded in fiscal 2018 and fiscal 2019 to determine if contractors and/or subcontractors used temporary foreign labor and to what extent. The order specifically says to look for “any potential effects on national security” and/or  “negative impact” of hiring temporary foreign labor or offshoring of labor on the economy. 

The agency heads will also work with the Office of Personnel Management to review their employment policies. By December 1, they must submit a report to the Office of Management and Budget on their findings and potential proposed reforms to comply with the executive order.    

Additionally, by September 17, the Labor and Homeland Security departments must take action to “protect United States workers from any adverse effects on wages and working conditions” from contractors employing holders of H-1B visas, which are for temporary foreign workers in specialty occupations. It is not immediately clear how this will be done or how many contractors or employees could be affected. 

Contracting experts questioned how agencies will carry out the executive order and its merits.

The order “sounds more like a dog whistle to the president's base than a legitimate concern,” Steve Schooner, procurement law professor at The George Washington University, told Government Executive. He also said the actions DHS and Labor must take are extremely “pernicious” because “given this administration's heavy-handed approach to immigrants (and, more broadly, people of color), the potential for witch-hunting and capricious action looms large.”

Lawrence Lorber, senior counsel at the international law firm Seyfarth Shaw LLP, who specializes in labor law, told Forbes on Monday it's unclear how current contracts should be handled. “An individual not authorized to work in the United States cannot work on a federal contract, so the import of the order goes to temporary visas,” he said. “Those visas permit individuals to work. Precluding them raises issues as to whether they can be excluded.”

Vic Goel, managing partner of immigration law firm Goel & Anderson, told Forbes the order might be a harbinger of the administration imposing stricter restrictions on visa holders. “The devil is in the details, most of which are not addressed in this executive order,” he said. 

The Labor Department’s Office of Federal Contract Compliance Programs and DHS did not immediately respond for comment. 

Besides the pandemic, the White House said the decision to issue this order came after the Tennessee Valley Authority, a federal corporation established in 1933 for flood management, electricity generation and land management, said it plans to outsource 20% of its technology-related jobs. Also on Monday, Trump fired the TVA board chairman James "Skip" Thompson over the outsourcing and claims he is getting paid too much.