The Trump administration is increasing scrutiny of companies that hire foreign workers, with federal officials warning that employers could face action if they discriminate against American applicants in favour of foreign labour.
The broader push is focused not simply on whether companies hire H-1B or other foreign workers, but on whether their recruitment and hiring practices comply with federal anti-discrimination laws.
The US Equal Employment Opportunity Commission says Title VII protects workers and applicants from national-origin discrimination, including discrimination against Americans.
It specifically notes that preferring foreign workers or applicants with a particular visa status over American workers can, depending on the facts, amount to unlawful discrimination.
The Justice Department has also stepped up enforcement in this area. In recent cases, its Civil Rights Division has accused employers of using PERM recruitment or other hiring practices in ways that allegedly disadvantaged US workers.
In April, the Justice Department sued Cloudera, alleging that the company intentionally discouraged or excluded US workers while favouring temporary-visa workers for certain technology jobs.
In August, the department also announced a $3.2 million settlement with OpenAI and Statsig over allegations that the companies discriminated against US workers during PERM recruitment by preferring temporary visa holders.
What It Means for Employers
The administration’s position does not mean companies are automatically barred from hiring foreign workers whenever an American applicant is available.
Nor does the H-1B programme generally require every employer to prove that no qualified American worker exists before sponsoring an H-1B employee.
The key issue is whether companies use discriminatory recruitment, hiring or employment practices.
For example, federal guidance says potentially unlawful practices can include job advertisements stating “H-1B preferred” or “H-1B only,” making it harder for US workers to apply, or favouring foreign workers because they are perceived as cheaper labour.
H-1B and PERM Under Greater Scrutiny
The tougher enforcement environment is placing additional attention on companies that depend heavily on H-1B workers and PERM-based green card sponsorship.
Federal agencies are increasingly examining not just immigration paperwork, but also job advertisements, recruitment procedures, wage practices and how American applicants are treated.
For employers, this means compliance now extends well beyond ensuring that a foreign worker has valid immigration status.
Companies may also need to show that their recruitment and hiring practices do not unlawfully favour foreign workers based on nationality, national origin, citizenship or visa status.
The message from federal agencies is becoming increasingly clear: hiring foreign workers remains lawful, but discriminating against American workers in the process can trigger investigations, penalties and lawsuits.
