US companies that laid off American workers and then started hiring foreign workers through the H-1B visa program are under fire. President Trump has signed an executive order instructing federal agencies to implement appropriate measures to protect American workers from abuse of the H-1B program when employers have recently laid off or plan to lay off US workers in comparable positions.
Employers who have recently cut American jobs, or who plan to, will face closer scrutiny the next time they try to bring in H-1B workers for similar roles. The order applies to employers sponsoring workers under the H-1B specialty occupation category, along with the outsourcing firms and third-party placement groups the order specifically calls out.
What does the order actually do?
The order, signed on September 18, 2026, and titled “Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program,” directs federal agencies to factor in an employer’s recent or planned layoffs when reviewing H-1B labor condition applications, petitions, visas, and entries.
If a company has laid off, or plans to lay off, American workers in comparable roles, that history now gets weighed against its H-1B requests.
It also pushes multiple agencies to work together rather than review applications in isolation. The Departments of State, Labor, and Homeland Security are directed to coordinate with Commerce, Education, and the Small Business Administration, pulling in wage, employment, academic, and industry data to check whether H-1B petitions actually meet the law’s requirements.
Why the order, and what’s the administration’s case?
The H-1B visa program has always been a contentious issue with Americans and gained ground during Trump’s presidency. The order leans on a familiar argument: that the H-1B program, originally meant to bring in uniquely skilled foreign workers, has instead been used by some employers, staffing firms, and outsourcing companies to undercut American wages and displace domestic workers.
A few specific numbers back that argument in the text itself. H-1B workers reportedly earn less than comparable US-born workers despite the law requiring equal pay, with the administration citing a wage gap starting around $9,000 and climbing as high as $20,000 in industries that lean heavily on the program.
The order also claims that between 2022 and 2026, technology employers requested H-1B visas for hundreds of thousands of workers, even as they collectively laid off somewhere between 800,000 and 1.3 million American employees.
What fraud cases does the order point to?
The order cites ongoing government investigations that have flagged a pattern of abuse among H-1B employers, including displacing American workers in favor of foreign hires.
The US employers have been seen misrepresenting job duties or working conditions to sidestep hiring Americans, falsely classifying roles as specialty occupations to qualify for the program. They were also accused of underpaying wages below what the law requires, and submitting questionable foreign degrees, some tied to diploma mills, to support visa applications.
The H-1B outsourcing-model employers use has been targeted more specifically in the order. The order states that in Fiscal Year 2026, the top six users of the H-1B program running outsourcing operations accounted for more than 25,000 H-1B cap registrations between them.
Bottomline
The order took effect on signing, September 18, 2026. There will be a 30-day window for the Labor Department to begin its review of past labor condition applications. The next few months, especially once the Labor Department’s 30-day review window closes, should make clear how aggressively this gets enforced.
Disclaimer: This article is based on the text of the September 18, 2026 executive order published by the White House and is for informational purposes only. It does not constitute legal or immigration advice.