The Anti-Immigration Wave Makes It To Government Contracting—E.O. 13940

“Not every story started off big enough to notice.”
― Tom Clancy, Executive Orders

President Donald Trump has kicked off the usually slow season of August by issuing a series of Executive Orders.  Most of them focus on the economy and taxation, but one of them is specifically focused on labor and government contracts issues. That would be his August 3, 2020, Executive Order No. 13940, entitled “Aligning Federal Contracting and Hiring Practices With the Interests of American Workers.” The Order is another piece of a continuing set of anti-immigrant actions taken by the President, with this one pointed at government contractors who hire  temporary foreign labor or workers on H-1B visas to work on their government contracts.

The Order declares it is the “policy of the executive branch to create opportunities for United States workers to compete for jobs, including jobs created through Federal contracts….” United States workers are not defined, but presumably Mr. Trump means citizens and legal residents with work permits.

The Order actually directs very little be done. It simply requires a report by each federal agency to review the extent to which “contractors” and “subcontractors” – also undefined in the Order – utilize temporary foreign labor for contracts performed in the United States, and requires contracting agencies to examine whether services previously performed in the United States are being outsourced for performance in foreign countries. The point is to review the practice of using foreign labor and/or offshoring work and the impact that has on “opportunities for U.S. workers, the eligibility of affected workers for Trade Adjustment Assistance, and national security interests.” Agencies have 120 days from the issuance of the order to report to the Office of Management and Budget the results of their review and to make recommendations for corrective actions, if necessary, including  setting up timeframes for implementation of such corrective actions. Given the timing of the order, this agency reporting deadline will happen in early December 2020.

If Trump loses the election, it is unclear what if anything will become of those recommendations in the short time remaining for his presidency. If Trump wins the election, however, government contractors should look for more formal efforts to impede the use of foreign labor on U.S. Government contracts.  

In addition, the Order also directs both the Secretaries of the Department of Labor and the Department of Homeland Security to act to protect U.S. workers from adverse effects which may be caused by contractor employment of H-1B visa holders. This can include requiring employers to file certifications required by the Immigration and Nationalization Act (“INA”). Basically, the Order discourages contractors from hiring an H-1B visa holder. The Order also extends to “secondary employers” but its scope is unclear.

The Order is unlikely, at least here in the initial stages, to have much impact on government contracting.  It is just another hoop to jump through for the contractor, and more burden on contracting agencies to report on what contractors are doing. But presumably it tees up more possible actions should Mr. Trump have a second term of office.

To see a copy of the Executive Order 13940 , go to https://www.federalregister.gov/documents/2020/08/06/2020-17363/aligning-federal-contracting-and-hiring-practices-with-the-interests-of-american-workers.