‘We’re not going to let you...’: JD Vance issues fresh H-1B warning to US companies

US Vice President JD Vance has issued a fresh warning to American companies over the use of H-1B visas, saying the Trump administration will not allow firms to lay off US workers and replace them with lower-cost foreign labour. 

“Our message to corporate America is simple: We’re not going to let you lay off American workers so you can replace them with cheap foreign labor,” Vance said in a September 24 post, linking to the White House’s latest H-1B policy announcement.

The warning comes as the Trump administration moves to make employers’ treatment of US workers a more explicit part of H-1B scrutiny. 

What has changed? 

On September 18, President Donald Trump signed an executive order directing the departments of State, Labor and Homeland Security to consider whether companies sponsoring H-1B workers have recently laid off, or plan to lay off, similarly situated US employees. 

The agencies have also been directed to coordinate with Commerce, Education and the Small Business Administration and use information on wages, employment conditions and industry trends when assessing H-1B cases. The Labor Department has been instructed to begin reviewing previously submitted Labor Condition Application data within 30 days to determine whether further action is warranted.

This does not mean every company that conducts layoffs will automatically be barred from sponsoring H-1B workers. Rather, layoffs involving similarly situated US workers can now become a factor in the government's scrutiny of an employer's H-1B applications. 

Why is the administration targeting H-1B hiring? 

The Trump administration argues that parts of the programme have been used by outsourcing companies and other employers to obtain lower-paid foreign labour and reduce their US workforce. 

The White House has specifically alleged that some technology companies have laid off American workers before hiring H-1B employees, and that some workers were required to train their foreign replacements. These are claims made by the administration and form part of its justification for the new policy.  

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The administration also says outsourcing models can eventually result in jobs moving outside the US altogether. 

The White House estimates that technology-sector employers laid off between 800,000 and 1.3 million American employees between 2022 and 2026 while collectively seeking hundreds of thousands of H-1B workers. The figures are administration estimates and should be viewed in that context. 

H-1B workers are already subject to wage rules 

The debate over “cheap foreign labour” is important because H-1B employers are already subject to wage requirements. 

Under Department of Labor rules, employers generally must pay an H-1B worker the higher of the actual wage paid to similarly qualified employees or the prevailing wage for the occupation and location. Employers must also provide comparable working conditions and benefits.

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There are also existing restrictions on displacement of US workers for H-1B-dependent and certain willful-violator employers. Such employers can face penalties and, in certain cases, debarment from the programme for violations.

The new executive order therefore adds another layer of scrutiny rather than creating the first-ever restriction against worker displacement. 

What about the $100,000 H-1B fee? 

The latest action comes on top of the administration's separate financial restrictions on H-1B hiring. 

The September 18 White House announcement renewed the $100,000 fee requirement for certain H-1B visa applications, originally introduced in September 2025. The administration says the measure is intended to discourage the use of lower-paid foreign labour and shift hiring towards higher-skilled, higher-wage workers.

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The White House also says H-1B registrations from the largest IT outsourcing firms have fallen sharply since the 2025 measures were introduced. It reported a 92% decline in registrations from those firms and a nearly 40% overall fall in registrations for FY2027 after the move towards wage-weighted selection.

What does this mean for Indian IT professionals? 

The implications are significant because Indian professionals and Indian-origin technology companies have historically been major participants in the H-1B system. 

The latest policy direction could make employers more cautious about sponsoring H-1B workers when they are simultaneously cutting comparable US positions. Companies may face greater scrutiny of their workforce history, wages, job descriptions and hiring practices. 

For Indian professionals already working in the US, however, the announcement does not amount to a blanket cancellation of existing H-1B visas. Its immediate focus is on employer behaviour and the scrutiny of H-1B petitions and related applications. 

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The bigger effect could be on future hiring decisions, particularly in technology and outsourcing sectors where companies use large numbers of H-1B workers. 

Vance’s warning reflects a broader shift in the Trump administration’s approach to skilled-worker immigration: the question is no longer simply whether an H-1B position qualifies as a specialty occupation.