By Radhika Balaji, Associate Attorney
On August 3, 2020, President Donald Trump signed an Executive Order (EO 13940) on “Aligning Federal Contracting and Hiring Practices With the Interests of American Workers.” This EO directs heads of federal agencies to review federal contracts and assess any negative impact on U.S. workers stemming from the use of temporary foreign labor or offshoring of work, and to take corrective action within 120 days.
The EO also directs the Secretaries of Labor and Homeland Security to take appropriate actions within 45 days to protect any adverse effects on wages and working conditions caused by H-1B visa holders including work at 3rd party worksites.
The Details of the Executive Order
Below we have outlined the scope of the key sections of the Order.
“Section 2 – Review of Contracting and Hiring Practices”
Within 120 days (by December 1, 2020) of this Executive Order, heads of each federal agency and department are under order to submit a report to the Director of Office Management and Budget upon review of federal contracts with a recommendation of corrective actions that have to be taken. This report will be based on:
- FY 2018/2019 Federal Procurement Contract – Review of federal procurement contracts awarded in the fiscal years 2018 and 2019, whether services were performed in the United States or in foreign countries for services previously performed in the US.
- Employment Policies – Review employment policies of the agency in coordination with Director of the Office of Personnel Management to determine if all employees hired under the competitive service are US Citizens, lawful permanent residents seeking citizenship, refugee and asylum recipients who intend to seek citizenship or a person who owes allegiance to the United States in compliance with the Executive Order issued on September 2, 1976 by then President Gerald Ford and Public Law 116-93
These reviews will determine
- any negative impact of hiring any foreign labor or offshoring of labor or
- any potential effects on national security.
“Section 3 – Review of Contracting and Hiring Practices”
Within 45 days (September 17, 2020) of the Order, the Secretaries of the Labor Department (DOL) and Homeland Security (DHS), must take appropriate actions on adverse effects on wages and working conditions caused by H-1B visa holders including work at 3rd party worksites. in compliance with the Labor Condition Application (LCA) Regulations outlined in 212(1)(n) of the INA/8 U.S.C. 1182(n)(1).
The Order generally seeks to keep checks and balances on negative economic impact of foreign workers in Federal Contracts while Section 3 specifically addresses the compliance of H-1B terms by foreign workers. It is anticipated that the two departments (DOL and DHS) are expected to work together to ensure that the H-1B workers are being employed pursuant to the terms and conditions of their H-1B visas including when they are placed at a third party work site.
Effect of the Order
At this time, the federal agencies have not announced how the order will be implemented. But given that President Trump has already targeted H-1B workers in his June 22 Presidential Proclamation, it appears this is a furtherance of that motive.
Moreover, this order seems to stem over an isolated concern related to the Tennessee Valley Authority (TVA) which had planned to outsource some its technology work to companies with foreign workers. The EO seems to be an overreaction.
 Executive Order published on the White house Presidential Actions webpage – https://www.whitehouse.gov/presidential-actions/executive-order-aligning-federal-contracting-hiring-practices-interests-american-workers/
 Executive Order 11935 – Citizenship Requirements for Federal Employment – https://www.presidency.ucsb.edu/documents/executive-order-11935-citizenship-requirements-for-federal-employment
 Consolidated Appropriations Act, 2020 – https://www.congress.gov/116/plaws/publ93/PLAW-116publ93.pdf
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Radhika Balaji is an Associate Attorney with MPLG’s immigration practice. She manages the firm’s PERM practice and focuses on immigrant petitions, adjustment of status applications, as well as employment-based non-immigrant visa petitions. She also specializes on a variety of family-based immigration matters, including green card applications through marriage, removal of conditions on residence and naturalization.