Trump Executive Order – H1B Jobs in Federal Govt (LCA, PERM Affected?)

Trump executive order to make H1B hiring tough in Federal agency. DOL will make approval of LCA and PERM tough. More scrutiny and Audits expected.

Written by Anil Gupta
  Anil Gupta    Updated 4 Sep, 20

A new executive order has been signed by Trump on Aug 3, 2020, which makes it difficult to hire H1b workers in federal agencies or their sub-contracts even if there are multiple layers of contracting.

The main points:

  1. Federal Government company’s contracts and H1B hiring to be reviewed from Oct 1, 2017, to the current day.
  2. DOL will have to check and reinforce the H1B LCA to see if any American workers were displaced due to H1B foreign worker hiring.
  3. This includes all FTE (Full-time employee), third party company project contracts, IT company sub-contracts, and projects.

This Executive Order has been signed after the federally-owned Tennessee Valley Authority’s (TVA) announcement that it will outsource 20 percent of its technology jobs to companies based in foreign countries.

See one of the TVA’s employees citing his own story where he was being replaced by one of the H1B contracting companies. They have been training H1B people:

Open video in new Window >

TVA’s action could cause more than 200 highly-skilled American tech workers in Tennessee to lose their jobs to low-wage, foreign workers hired on temporary work visas.

Everything in the election season becomes a huge issue and this is probably one of them.

Fragomen thinks that this could lead to an increase in H-1B investigation (like site visits), requests for information (RFE), and case denials.


The Department of labor was asked to review all LCAs within 45 days of this order and they have submitted it for OMB approval on Sep 4, 2020.

Employment of H-1B visa holders at job sites (including third-party job sites), including third party companies like TCS, HCL, Infosys, etc. are following all rules for H1B LCA filing.

There are no new explicit LCA rules framed as part of this executive order but it is expected that DOL will make the interpretation stricter than normal.

What this means:

  • Your H1B LCA where the end client is a federal government can now be denied.
  • You may be asked to recertify the LCA even if the old one is already approved. This is a bit of an extreme scenario though as it opens up the option of a lawsuit. We will know as the time moves and we see real-life cases.
  • Third-party consulting companies will be affected even if you work in EVC or EVCC or any other model as long as the end client is a federally funded organization.

The Trump’s executive order has asked to verify that the current rules for Labor Condition Application written in the National immigration act under section 212(n)
(1) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(1))
are followed strictly.

The main points which need to be tested before approving an LCA as per current law are:

  1. H1B employer is offering appropriate wages.
  2. There is not a strike or lockout in the place of employment.
  3. LCA has been posted at a public place of visibility and no American worker has claimed that they can do that job.
  4. No American worker was removed in the period beginning 90 days before and ending 90 days after the date of filing of an H1B visa petition supported by the LCA.


What H1B workers will be affected?

All H1B workers employed directly or indirectly with a Federal company will be affected.

The H1B LCA may not be renewed.

The language specifically talks about outsourcing which means that third-party IT consulting projects will be affected.

It seems that projects handled by third-party companies like TCS, Infosys, HCL, etc are the target.

What all federal agencies hire H1B workers?

There are many federal agencies that outsource the IT work to consulting companies like Accenture, Capgemini, Cognizant, etc and their projects may be put on hold as Trump is aiming to push to hire American workers.

A complete list of Federal companies is available on the website.

DOL will make it tough to get the LCA approval for these positions.

Will PERM approvals be affected?

It does seem like DOL will raise the bar and requirements to approve the PERM for jobs where the end client is a federal agency.

Your pending PERM may be audited and the interpretation may be made strict.

In most audit cases DOL asks to perform a managed hiring process (supervised recruitment) where they ask all job seekers to send the resumes directly to the DOL officer.

This is done to make sure that the employer is not bypassing or cheating on the hiring process just to get the PERM or LCA approval.

What if H1B is working in a Federally owned Hospital?

If someone is doing a job in a hospital as a doctor or researcher using an H1B visa for a federally funded or owned hospital company, your LCA is part of the executive order.

The chances are higher that you will get approval if DOL does not find any discrepancy.

Does it impact State/City/Township Govt. projects that hire H1Bs?

Many state governments engage H1Bs through third party/Vendors.

If the state/City govt. do receive Federal funding in one way or the other, then it is possible that they may be asked to comply with this order.

Concrete details are not available at this time.

Are L1, J1 visa workers also affected?

The order specifically mentions H1B workers. It is possible that J1 and L1 visa workers may also be affected but there is no direct impact visible at this time.

Are H4 EAD, L2 EAD workers affected if they are working in Federal companies?

H4 and L2 EAD workers do not need an LCA posting. They should not be affected by this order.

But, the focus of this order is on foreign worker hiring and replacement of an American worker.

So, it is possible that the overall hiring of H4 EAD or L2 EAD is reduced unofficially.


Written by Anil Gupta
  Anil Gupta           

Recent discussion on forum

  1. anonymous

    This would have huge impact for H1B workers I know many of my friends around VA, DC, MD on H1B working for Federal Projects on H1B.

  2. anonymous

    State governments jobs won’t be part of federal entities right? Any thoughts?

  3. anil_am22

    State government jobs should not be affected as long as they are not federally funded. The EO specifically asks federally owned and funded companies.

    It is possible that some state owned companies also follow the suit. It’s not known yet.

    We have given the link to check the list of federal companies in the article. You can check if you work for one of them or have them as a client.

  4. anonymous

    Well step by step he is peeling off the whole H1B program.

  5. anonymous

    Also this is more troubling.

    “The Department of Labor will also finalize guidance to prevent H-1B employers from moving H-1B workers to other employers’ job sites to displace Americans worker”

    The above statement js generic.

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