U.S. employers, foreign residents and lawyers are reeling from the White House's surprise changes to the H-1B visa system.
Why it matters: H-1B visas play a crucial role in driving high-skilled workers to the U.S., fostering economic growth and innovation.
- The administration's actions could imperil that system.
Catch up quick: H-1B visas are issued through a lottery system to foreigners with at least a bachelor's degree or equivalent.
- Only about 85,000 are issued a year. The biggest users are tech giants like Amazon.com.
- Nonprofits, like universities, certain hospitals and research centers are exempt from the cap.
State of play: Last month, President Trump announced a $100,000 charge for an H-1B. There's still some confusion on how the system will work.
- On Friday, a coalition of labor unions, health care providers, schools and religious organizations filed suit against the Trump administration over the constitutionality of the order.
Zoom in: The plaintiffs, including progressive advocacy group Democracy Forward, say that the president does not have the authority to unilaterally change a system created by Congress. Among the plaintiffs are a health care business that helps staff hospitals with nurses from abroad.
- In a statement, White House spokeswoman Abigail Jackson said its actions are lawful: "Challenges by liberal groups, like Democracy Forward, who've made a habit over filing frivolous lawsuits should not be taken seriously."
- "President Trump promised to put American workers first, and his commonsense action on H1-B visas does just that by discouraging companies from spamming the system and driving down American wages, while providing certainty to employers who need to bring the best talent from overseas."
The intrigue: It's still unclear what the process is for actually paying the $100,000, explain researchers at the Economic Innovation Group, a bipartisan think tank.
- Those working at nonprofits also appear to be on the hook — potentially a blow for research and science in the U.S.
- The administration can grant exemptions from the fee if it's in the national interest, although it's not clear who would be eligible.
Zoom out: H-1B critics have long argued that companies use them to pay lower salaries to foreigners, instead of offering higher compensation to Americans.
- The changes are meant to encourage employers to use the visas only for truly high-skilled, high-cost labor.
- Even immigration proponents criticize the H-1B process.
Between the lines: Small businesses and startups say the changes will effectively block them from hiring foreign talent.
- Some bigger companies are talking about moving roles outside the country.
- Companies are already facing confusion over other White House policies canceling the immigration status of refugees and other foreign workers.
"We're talking to very significant companies that are reaching a point where they're realizing this is untenable — we cannot continue down this road with the uncertainty in the world of immigration," says Chris Thomas, an immigration lawyer at Holland & Hart.
- They're starting to talk about how to outsource or offshore work to India, Canada or Mexico, he says — "just take entire departments out of the United States."
The big picture: Workers on H-1B visas in the sciences and tech generally increase productivity and wages for native-born Americans, studies have found.
- Losing them is expected be a hit to economic growth and lead to a 'brain drain."
- Many of the country's top CEOs and entrepreneurs have held H-1B visas, including Microsoft CEO Satya Nadella and Alphabet CEO Sundar Pichai.
What's next: The lawsuit, filed in federal court in the Northern District of California, is asking the court to block the order.
