The presidential executive order, “Buy American and Hire American,” will have an impact on Minnesota businesses. The “Hire American” part of the order focuses on the H-1B visa, which is an integral part of the Minnesota workplace. The H-1B classification, created by statute in 1990, allows U.S. businesses to hire highly skilled foreign-born workers for jobs that require “specialized knowledge.” H-1B visas are heavily used in the finance, tech, science, and healthcare industries.

While the executive order doesn’t change any requirements for obtaining H-1B visas, it calls on federal agencies to review the H-1B program, tighten rules, and propose changes in order to protect U.S. workers. One of those proposed changes is to award H-1B visas to foreign workers with the highest skill levels rather than rely on the lottery system, which is the current means for awarding these visas. The H-1B annual quota for approved petitions is capped at 65,000 for regular applicants and 20,000 for applicants who hold advanced degrees.

The existing H-1B program has built-in protections for the U.S. worker, such as paying the foreign-born worker the same wage as a U.S. worker holding a comparable position in the same geographic area. This number is based on prevailing U.S. Department of Labor wage data. The goal of this policy is to ensure that hiring an H-1B worker will not drive down wages for the U.S. worker. 233,000 lottery applications were filed nationwide in fiscal year 2016. More than 21,000 H-1B positions were requested by Minnesota employers in 2015. Demand exceeds supply. Minnesota is among the top 20 states pursuing H-1B visas.

H-1B workers contribute to the U.S. economy and create new opportunities for economic expansion, including job creation for U.S.-born workers. Minnesota employers seeking to hire H-1B workers include not only both large and small businesses across the state but also medical and academic institutions. The Mayo Clinic and the University of Minnesota, for example, have integrated the H-1B program into their hiring practices.

Looking ahead, the call for reform will affect Minnesota businesses and will be closely watched by employers and employees alike. The executive order is sure to have an effect on the Minnesota labor market. Contact the law firm for advice and further information.