US President Donald Trump has signed an executive order to tighten oversight of the H-1B nonimmigrant visa programme. The administration has accused some employers, outsourcing companies and third-party placement firms of misusing the system to replace skilled American workers with lower-paid foreign labour. The White House issued the order, titled “Enhancing Program Integrity and Interagency Coordination in the Administration of the H-1B Nonimmigrant Visa Program", on September 18, 2026. The order calls for greater coordination among federal agencies and closer scrutiny of companies that sponsor H-1B workers. It also directs authorities to examine whether employers have laid off American workers while seeking H-1B visas for foreign employees.

US Cites Wage Gap and American Job Losses

The order states that the H-1B programme was originally designed to help US employers bring in foreign workers with highly specialised skills that are difficult to find domestically. However, the Trump administration claims some employers have “widely abused" the programme to reduce labour costs and displace skilled American workers. According to the White House, lower-paid H-1B workers can put pressure on wages earned by US employees. The administration claims H-1B workers earn between $9,000 and $20,000 less than comparable US-born workers in industries that depend heavily on the visa programme. The order points out that US law requires employers to meet specific wage requirements for H-1B workers. Despite those requirements, the administration cited what it described as a significant wage gap between H-1B workers and comparable American employees. “The abuse of cheaper H-1B labor places downward pressure on domestic pay. H-1B visa holders earn far less than comparable United States-born workers, despite the statutory mandate that H-1B workers be paid equally to their domestic peers, with the estimated wage gap starting at $9,000 and climbing as high as $20,000 in H-1B reliant industries," read the order. The administration also highlighted employment trends in the technology sector. It said technology companies sought H-1B visas for hundreds of thousands of foreign workers while laying off between 800,000 and 1.3 million American employees between 2022 and 2026. The order further alleged that some companies required American employees who had lost their jobs to train the foreign workers who replaced them.

Outsourcing Companies Face Greater Scrutiny

The executive order also focuses on outsourcing companies that rely heavily on H-1B workers. According to the White House, some outsourcing firms bring foreign workers into the US to replace American employees working for third-party clients. The firms may then move a significant portion of that work overseas. The order said the six largest H-1B users operating under this type of outsourcing model accounted for more than 25,000 H-1B cap registrations in fiscal year 2026. It also cited a foreign minister who described H-1B as “has become the outsourcing visa". The administration has linked what it describes as systematic misuse of the programme to national security concerns. The order said US law enforcement agencies have investigated some H-1B-dependent outsourcing companies over allegations involving visa fraud, conspiracy to launder money and other illegal activities. The White House also warned that widespread misuse of the programme could discourage American students and workers from pursuing careers in science and technology. According to the order, this could eventually affect US leadership in these important fields.

Federal Agencies to Examine Employer Layoffs

The new order requires several federal agencies to work together when reviewing H-1B petitions, labour condition applications and visa requests. The Secretaries of State, Labour and Homeland Security will coordinate with the Secretaries of Commerce and Education and the Administrator of the Small Business Administration. These agencies will share information related to wages, employment, education, industry and other economic factors. The goal is to improve compliance with the Immigration and Nationality Act. Immigration authorities will also examine the employment record of companies sponsoring H-1B workers. Under the order, officials must consider whether an employer has directly or indirectly laid off workers during the previous year. They must also examine whether the company plans future layoffs that could negatively affect similarly situated American workers. The order gives the Labour Department’s Wage and Hour Division 30 days to begin reviewing information from previously submitted labour condition applications. The review will determine whether additional action should be taken against employers that sponsor H-1B workers.

Government Agencies Cite Multiple Forms of Abuse

The order said several federal departments and agencies have identified what they consider widespread abuse involving employers seeking lower-paid and lower-skilled foreign workers through the H-1B programme. The administration cited several alleged violations. These include replacing American workers, providing inaccurate information about job duties and working conditions, and incorrectly classifying jobs as specialty occupations. Officials also pointed to cases involving attempts to reduce the applicable wage requirements. The order further cited the use of questionable foreign degrees from diploma mills to support H-1B applications. The administration said these practices undermine the purpose of the visa programme and can negatively affect American workers. Trump said additional steps were necessary to protect and prioritise the US workforce. He also said the H-1B programme must operate in a way that serves the national interest.

New Rules and Guidance to Follow

The executive order gives the Secretaries of State, Commerce, Labour and Homeland Security authority to issue or adopt rules, policies and operational guidance required to implement the new measures. The White House said the order will be carried out in accordance with existing law and will depend on available funding. It also clarified that the executive order does not create any enforceable right or benefit against the US government, its departments or agencies. The administration's stated aim is to increase oversight of the H-1B programme, examine employers' hiring and layoff practices and prevent what it describes as misuse of the visa system.