President Trump’s immigration executive orders may have a dramatic impact on businesses. However, we won’t know the full impact until his immigration policies are finalized or the courts reach adjudications.
In January, Trump issued an executive order about 15 minutes before the close of business on Friday. It caused chaos at the airports the next day and led to legal action.
The so-called “travel ban” suspended all refugee admissions for 120 days and blocked citizens of seven mainly Muslim countries – Iraq, Iran, Somalia, Sudan, Yemen, Syria, and Libya from traveling to the United States. After legal setbacks, a new order was issued in March that removed Iraq and softened some parts of the original ban.
The original orders were resisted and fought in the courts where they were blocked.
These executive orders and other immigration policies may have an impact on businesses. The main impacts could be.
1 Restricting the Ability of Businesses to Hire Foreign Talent
Technology and financial institution leaders were quick to condemn the travel ban in January. They included Facebook CEO Mark Zuckerberg, Lloyd Blankfein, the chief executive at Goldman Sachs and Google CEO Sundar Pichai.
The business community fears the ban, whatever form it takes, may impact its ability to attract and retain talent. If global leaders are denied the world’s best talent, the U.S. may suffer and companies could relocate to other countries.
Michael Useem, Wharton management professor and director of the Center for Leadership and Change Management, said many companies hire refugees and people who are on non-immigrant visas. He said.
“So many companies hire refugees, people who are on special visas. It’s just who we are, and this seems to knock the air out of us.”
2 Impacting America’s Reputation for Being “Business Friendly.”
While Donald Trump’s proposals to restrict free trade are not directly linked to immigration there is a clear correlation. At one point, the White House appeared to float a 20 percent tariff on imports from Mexico to finance the building of the border wall to keep out immigrants.
Notwithstanding the trade deficit the U.S. has with Mexico, American companies export approximately $270 billion to its southern neighbor, reported Salon. The article said the idea of steep tariffs is alarming both business leaders and some lawmakers who fear the United States could become a more difficult place to do business.
Texas benefits from a large chunk of the cross-border trade with Mexico.
3 The Need for Greater Vetting of Workers
The president wants businesses to step up their enforcement of immigration laws to ensure they are not hiring undocumented workers. The system of E-Verify may become compulsory.
E-Verify allows employers to obtain electronic verification from the government of an employee’s authorized work status.
It is voluntary but became compulsory in places such as Arizona. In Texas, a bill to require Texas businesses to use E-Verify as a precondition to receiving state contracts, was earmarked as a priority by Lt. Gov. Dan Patrick.
However, E-Verify proved burdensome and bureaucratic when Arizona and Alabama brought it in more than four years ago, reported the Huffington Post.
The Chinese restaurant P.F. Changs used E-Verify. It was still sanctioned for hiring workers who successfully beat the system and was forced to close eight stores in Arizona.
Some experts claim mandatory use of the system could significantly slow down businesses’ efforts to hire employees.
Immigration Policies May Impact Texas Economy
4 Creating A Disincentive to Overseas Investors
The importance of overseas investors to the U.S. economy is illustrated in recent data from the National Foundation for American Policy as we noted last year.
More than half of U.S. businesses valued at $1 billion or more were started up by immigrants, stated the nonpartisan public policy research.
NFAP said immigrants make up over 70 percent of the key members of management or product development teams. By stemming the flow of investment, the United States could lose out on foreign funding.
5 Posing Obstacles for Future Hiring
The initial travel ban instructed federal agencies to consider more in-person interviews. These were to be held at U.S. consular posts and immigration offices in the United States.
Agents were to be instructed to evaluate whether employer-sponsored foreign workers would become a contributing member of society and make a positive contribution to the national interest.
This would have been a “nebulous” test that gives considerable power to officials, stated an article in FastCompany.com.
Restrictions in H1-B visas will also impact hiring. A recent CNN report said the Trump administration is considering restricting spouses and children of H-1B visa holders from coming to the United States. The administration cut the fast-tracking procedure out of the visa program.
It remains to be seen what final shape Trump’s immigration policies and travel bans will take. However, a hostile and suspicious climate for overseas workers coupled with new restrictions to the visas system could exacerbate uncertainties in future hiring for Texas companies.
If your company is facing uncertainties in hiring foreign workers to fill a skills gap, we can help. Please call our Austin immigration lawyers at (512) 474-4445.