US President Donald Trump on Monday signed an executive order preventing federal agencies from contracting or subcontracting foreign workers from hiring.
Trump's executive order increases scrutiny of federal contractors' use of H1-B visa to bring in temporary foreign workers for high-skilled jobs, instead of relying on Americans.
The decision will impact a large number of Indian IT professionals who are seeking jobs in the US.
The H1-B visa is a non-immigrant visa that allows US firms to employ foreign workers in specialty occupations that require technical and theoretical expertise.
The move came after the Trump administration on June 23 suspended the H1-B visa, along with other types of foreign work visas until the end of 2020.
President Trump has said that his administration will not tolerate the firing of hardworking Americans in the pursuit of cheap foreign labour.
"As we speak, we're finalising the H-1B regulation so that no American workers be replaced ever again. H-1B should be used for top highly paid talent to create American jobs, not as inexpensive labour programmes and destroy American job," Trump said.
The COVID-19 recession has thrown millions of Americans out of work. In fact, a $600 jobless benefit paid weekly to millions of unemployed Americans got expired this week. Additionally, the US economy shrank by 9.5 per cent in the second quarter of 2020, compared with the preceding three months. This was equivalent to an annual rate of 32.9 per cent - US steepest contraction for decades.
The executive order requires all federal agencies to complete an internal audit and assess whether they are in compliance with the requirement that only US citizens and nationals are appointed to the competitive services.
According to the White House, Trump's actions will help combat employers' misuse of H-1B visas, which were never intended to replace qualified American workers with low-cost foreign labour.
Trump also said he was in favour of a merit-based immigration system that would bring in high-skilled people that creates jobs inside the US and not take jobs of Americans. He added that his administration is working on other changes to the H-1B visa programme that may be announced in the coming weeks.