The Trump administration has ordered tighter scrutiny of H-1B visa applications where sponsoring employer companies have recently laid off, or plan to lay off, similarly situated US workers. The move could bring greater scrutiny to companies that the administration alleges have cut American jobs while continuing to hire foreign workers.An executive order signed by President Donald Trump on September 18 directs the Departments of State, Labor and Homeland Security to consider whether a sponsoring employer “directly or indirectly” laid off employees within the previous year or plans future layoffs that “negatively affect the employment of similarly situated” American workers when adjudicating an H-1B labour condition application (LCA), petition, visa application or application for admission to the US.The proclamation states: “Many employers have laid off large numbers of highly skilled American workers, only to promptly hire large numbers of H-1B workers who are often lower-skilled and lower-paid. For instance, technology sector employers have collectively requested H-1B visas for hundreds of thousands of workers, yet have also laid off somewhere between 800,000 to 1.3 million American employees from 2022 through 2026. Employers have even forced laid off American workers to train their foreign replacements.”The White House said the H-1B programme was created to bring in specialised foreign workers to “supplement” the US economy, but alleged that it has instead been used by some employers to “undercut and displace” American workers. The accompanying proclamation similarly says the programme has been exploited to “replace, not supplement, American workers with lower-paid labour”. The executive order also calls for greater sharing of wage, employment, industry and other labour-market data among federal agencies when H-1B cases are assessed.“One company even warned its shareholders that restrictions on cheap H-1B labour could force the company to use ‘local’ workers, which may only be available at higher wages,” the executive order illustrates.An employer seeking to sponsor a foreign worker under the H-1B programme must first file a Labour Condition Application (LCA) with the US Department of Labor before submitting the H-1B petition to US Citizenship and Immigration Services (USCIS). In the LCA, the employer makes legally binding attestations covering matters including the wage to be paid, occupation, work location and working conditions.The executive order now directs the Department of Labor, within 30 days, to review data from previously filed LCAs to determine whether further action against sponsoring employers is warranted. The review could trigger investigations potentially bringing greater scrutiny to wages, job conditions and compliance with H-1B requirements.Mitch Wexler, senior counsel at Fragomen, a global immigration law firm, said: “It is not yet clear how the immigration agencies will implement these provisions. Existing law obligates high-volume H-1B employers (known as H-1B dependent) as well as those deemed to have wilfully violated H-1B programme rules to attest that they have not laid off a US worker and replaced them with an H-1B worker in an essentially equivalent job within 90 days before and after the filing of an H-1B petition or the placement of an H-1B worker with a secondary employer; under current law these requirements do not apply beyond this narrow class of H-1B employers.”“It is also not yet known how the agencies will consider economic data in the adjudication of H-1B filings, though this could result in higher scrutiny of offered wages, job duties, and job requirements, particularly in light of USCIS’ recent expansion of job requirement disclosures on the H-1B petition,” he added.The proclamation also takes aim at the outsourcing model, stating that many jobs held by H-1B workers eventually leave the US entirely. “Employers with outsourcing business models use teams of H-1B visa holders to replace US workers at third-party client businesses and liaise with other individuals working off-site from their country of origin. As soon as practicable, much of their own work is transferred offshore,” it states.The issue of layoffs and H-1B hiring has been the subject of earlier debate. In 2025, US senators Chuck Grassley and Dick Durbin questioned companies including TCS, Cognizant, Amazon, Microsoft, Google, Meta and Apple about their hiring and layoff practices. According to media reports, these companies disputed or rejected aspects of the assertions. The executive order moves the issue from a political debate to a course of action.