The Labor Department announced sweeping new punishments Thursday against major tech companies that it said are laying off American workers and replacing them with lower-paid foreign guest workers.
Vice President J.D. Vance said the department also has opened investigations into nine major universities that seemed to prefer foreign graduate students and researchers over Americans.
The targets include some of the biggest and most iconic players.
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Two of them, Microsoft and Adobe, have been suspended from a program that lets companies convert guest workers into permanent immigrants.
The Labor Department said that was a response to abuse of the system: hiring foreign workers at lower wages to hold jobs that used to be done by Americans.
Meanwhile, Harvard, Yale and Stanford top the list of nine universities under investigation for relying too heavily on foreign researchers.
Federal officials said more than 60% of the postdoctoral researchers at the schools were foreigners, or roughly double the average at other colleges.
“They’re using these visas way too much. They’re using them to undercut the wages of American grad students and American researchers, and it simply has to stop,” Mr. Vance said. “This is a fundamental insult to the American worker and the American way of life.”
The two programs at issue are the J-1 visa, which allows schools and institutions to bring in foreign researchers, and the H-1B visa, which is intended to be reserved for highly skilled workers who cannot be found in the U.S.
The H-1B is a non-immigrant visa, meaning the workers are supposed to return home after their time in the U.S. Yet the Program Electronic Review Management system allows businesses that employ H-1B workers to convert them to permanent legal residents.
Mr. Vance said the intent was to let companies bring in truly exceptional foreign workers, but it has become a source of cheap labor. He said businesses are supposed to certify they cannot find a qualified American, but firms are playing fast and loose with that requirement, which he said amounts to fraud.
He particularly targeted Microsoft, saying it laid off 6,000 Americans and replaced them with 6,300 foreign H-1B workers.
Suspending Microsoft from the PERM program is a way to get the company’s attention, he said.
“Our message to Microsoft is, ‘You’re a great American company, but you’ve got to hire great American workers,’” he said.
Microsoft said in a statement that the “vast majority” of its U.S. employees are already Americans and that most of the H-1B visas it applied for last year were to retain or hire foreigners already in the U.S. — not to bring in new ones.
“Microsoft only files H-1B petitions for those who meet the rigorous standards of this visa category,” the company said. “We pay our H-1B employees the same as any other employees doing comparable work.”
The Labor Department had previously announced suspensions of six “visa mills,” or companies that recruit and outsource H-1B workers, from the PERM program.
The colleges facing investigation over J-1 visa use are Harvard, Yale, Stanford, Brown, the University of Pittsburgh, the California Institute of Technology, Arizona State University, the Massachusetts Institute of Technology and the University of California, Davis.
Labor Department Inspector General Anthony D’Esposito said the schools’ deep pockets and connections would not protect them.
“Nobody will be getting a free pass because their name is carved into an expensive building,” he said.
Mr. D’Esposito said subpoenas have been issued in the investigations.
He said a particular worry over relying on foreign researchers was whether China was using America’s visa system to gain access to technology and research.
Yale and Stanford said in statements that they comply with the law.
Stanford said it will cooperate with the federal investigation. Yale said it was awaiting documents.
Harvard did not respond to an inquiry.
Mr. Vance said the H-1B users targeted by the Labor Department had collectively filed 3 million petitions for foreign workers since 2009 and had been approved for 230,000 spots.
Another 100,000 had converted to full legal permanent status through PERM.
He decried the “pernicious idea” that permeated some American organizations that “Americans are not good enough for the jobs in their own country.”
“This visa fraud is a frontal assault on the idea that you deserve to inherit the jobs and the positions in your own country,” the vice president said.
Mr. Vance said there was room to bring in “a genius” — he cited examples such as Tesla CEO Elon Musk or Lisa Su, president of Advanced Micro Devices.
Yet he said that for a more basic job, such as an accountant making $70,000 a year, who is replaced with a foreign worker making $40,000, “you are committing fraud.”
He said Congress should overhaul the program at the root, but the administration has some tools available.
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