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What the “Buy American, Hire American” Executive Order Could Mean for the Tech Industry

Tech companies, specifically in the cyber security space, are preparing for stricter regulations in light of the new order.

Last week, the White House issued the “Buy American, Hire American” executive order. The executive order encourages both the government and American businesses to buy American-made products and hire American workers.

Although the intent might be to have companies invest more in hiring US workers, many experts are fearful of the unintended negative consequences the executive order may have, especially on the tech industry. In addition, many experts point out the language of the executive order almost seems to counteract Title VII, which prohibits discrimination of applicants by national origin. A well-meaning, but uninformed, hiring manager might see the prompt to “hire American” and begin asking applicants if they are American, which would be an illegal interview question under Title VI.

Workforce expert Jon Hyman finds the language in the executive order especially disturbing.

“If you read the fine print—that is, the actual language of the Executive Order—you learn that #HireAmerican isn’t really ‘Hire American’, but instead it’s ‘hire any American citizen or anyone else legally authorized to work in the United States under our current immigration laws,’” says Jon Hyman on WorkForce.com. “But that’s not how the White House is promoting this Order. It’s being promoted as #HireAmerican, which sends a certain signal to certain xenophobically and/or racistly inclined Americans, who might use this Executive Order to discriminate on the basis of national origin, or race, or religion. ‘Trump says Hire American, so I’m not hiring that one with the turban, or hijab, or funny accent.’ And that’s the exact type of discriminatory misconduct that Title VII is supposed to protect against.”

The order also includes a call to immediately review and reform the H1-B, which may even include a suspension or discontinuation of the program. Although many agree there are issues with the H1-B program, including cases of fraud and abuse, hasty changes to the program could be disastrous to the current tech industry.

In fact, companies are already considering outsourcing or moving offices overseas due to existing talent shortages and additional hiring restrictions could simply push companies to expedite taking jobs elsewhere.

“And if they can’t hire locally or import it, the jobs will leave,” said Sam Curry, chief product officer at Boston-based Cybereason to CIO. “What matters is that the right policy exists to give Americans a chance to train in the skills they need and have access to jobs without hamstringing companies who can’t wait for those skills.”

Some tech jobs are so in-demand there are significant talent shortages. In cybersecurity, for example, Cybersecurity Ventures reports there were over 1 million unfilled jobs in 2016 with a 0% unemployment rate in the US.

“Anyone with cybersecurity experience can find immediate employment” says Steve Morgan, founder and CEO at Cybersecurity Ventures. “There may be a small percentage of the cyber workforce who are in between jobs, some who have resigned to pursue new opportunities, and others who are unrealistic about which positions they qualify for (and the compensation commensurate with their experience) — but there’s a job available for everyone with cybersecurity experience.”

A shortage of development talent is one thing; however, a shortage of cybersecurity professionals has the potential to severely impact the overall security profile of US businesses. Data breeches already cost US business billions of dollars annually and a single breech can cost thousands, if not millions of dollars, per instance.

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The ability on foreign companies being able to continue to support US customers might also be negatively affected, which can also be a drag on innovation.

“As a foreign company, we sometimes have to apply for visas and work permits for people we need to send over to the US, to help our customers there,” said Rafael Laguna, CEO at Nuernberg, Germany-based Open-Xchange to CIO. “From that experience we know how hard this is, how expensive and lengthy. I can’t see a need for making this even harder. It is already putting too much sand into the gears that drive the tech industry.”

Although one might argue this is a good thing because it forces US-based companies to choose software developed by US-companies, it is not quite so simple. Innovative tech solutions come from all corners of the globe, and restricting access to important tools and services can be harmful to innovation in the long-run.  In fact, Cuba’s antiquated technology infrastructure is a good example of what happens to technology in a bubble – it stagnates.

The upside to the new executive order might be encouraging US workers to pursue degrees in IT, specifically cybersecurity. With a current upward trend toward outsourcing, many IT workers are fearful of their job security and having better policies to retain US workers could be a step in the right direction.

Read the full executive order below:

The White House
Office of the Press Secretary
For Immediate Release

Presidential Executive Order on Buy American and Hire American

EXECUTIVE ORDER

– – – – – – –

BUY AMERICAN AND HIRE AMERICAN

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to ensure the faithful execution of the laws, it is hereby ordered as follows:

Section 1.  Definitions.  As used in this order:

(a)  “Buy American Laws” means all statutes, regulations, rules, and Executive Orders relating to Federal procurement or Federal grants    including those that refer to “Buy America” or “Buy American”    that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods.

(b)  “Produced in the United States” means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.

(c)  “Petition beneficiaries” means aliens petitioned for by employers to become nonimmigrant visa holders with temporary work authorization under the H-1B visa program.

(d)  “Waivers” means exemptions from or waivers of Buy American Laws, or the procedures and conditions used by an executive department or agency (agency) in granting exemptions from or waivers of Buy American Laws.

(e)  “Workers in the United States” and “United States workers” shall both be defined as provided at section 212(n)(4)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(4)(E)).

Sec. 2.  Policy.  It shall be the policy of the executive branch to buy American and hire American.

(a)  Buy American Laws.  In order to promote economic and national security and to help stimulate economic growth, create good jobs at decent wages, strengthen our middle class, and support the American manufacturing and defense industrial bases, it shall be the policy of the executive branch to maximize, consistent with law, through terms and conditions of Federal financial assistance awards and Federal procurements, the use of goods, products, and materials produced in the United States.

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(b)  Hire American.  In order to create higher wages and employment rates for workers in the United States, and to protect their economic interests, it shall be the policy of the executive branch to rigorously enforce and administer the laws governing entry into the United States of workers from abroad, including section 212(a)(5) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(5)).

Sec. 3.  Immediate Enforcement and Assessment of Domestic Preferences According to Buy American Laws.  (a)  Every agency shall scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law.

(b)  Within 150 days of the date of this order, the heads of all agencies shall:

(i)    assess the monitoring of, enforcement of, implementation of, and compliance with Buy American Laws within their agencies;

(ii)   assess the use of waivers within their agencies by type and impact on domestic jobs and manufacturing; and

(iii)  develop and propose policies for their agencies to ensure that, to the extent permitted by law, Federal financial assistance awards and Federal procurements maximize the use of materials produced in the United States, including manufactured products; components of manufactured products; and materials such as steel, iron, aluminum, and cement.

(c)  Within 60 days of the date of this order, the Secretary of Commerce and the Director of the Office of Management and Budget, in consultation with the Secretary of State, the Secretary of Labor, the United States Trade Representative, and the Federal Acquisition Regulatory Council, shall issue guidance to agencies about how to make the assessments and to develop the policies required by subsection (b) of this section.

(d)  Within 150 days of the date of this order, the heads of all agencies shall submit findings made pursuant to the assessments required by subsection (b) of this section to the Secretary of Commerce and the Director of the Office of Management and Budget.

(e)  Within 150 days of the date of this order, the Secretary of Commerce and the United States Trade Representative shall assess the impacts of all United States free trade agreements and the World Trade Organization Agreement on Government Procurement on the operation of Buy American Laws, including their impacts on the implementation of domestic procurement preferences.

(f)  The Secretary of Commerce, in consultation with the Secretary of State, the Director of the Office of Management and Budget, and the United States Trade Representative, shall submit to the President a report on Buy American that includes findings from subsections (b), (d), and (e) of this section.  This report shall be submitted within 220 days of the date of this order and shall include specific recommendations to strengthen implementation of Buy American Laws, including domestic procurement preference policies and programs.  Subsequent reports on implementation of Buy American Laws shall be submitted by each agency head annually to the Secretary of Commerce and the Director of the Office of Management and Budget, on November 15, 2018, 2019, and 2020, and in subsequent years as directed by the Secretary of Commerce and the Director of the Office of Management and Budget.  The Secretary of Commerce shall submit to the President an annual report based on these submissions beginning January 15, 2019.

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Sec. 4.  Judicious Use of Waivers.  (a)  To the extent permitted by law, public interest waivers from Buy American Laws should be construed to ensure the maximum utilization of goods, products, and materials produced in the United States.

(b)  To the extent permitted by law, determination of public interest waivers shall be made by the head of the agency with the authority over the Federal financial assistance award or Federal procurement under consideration.

(c)  To the extent permitted by law, before granting a public interest waiver, the relevant agency shall take appropriate account of whether a significant portion of the cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufactured goods, and it shall integrate any findings into its waiver determination as appropriate.

Sec. 5.  Ensuring the Integrity of the Immigration System in Order to “Hire American.”  (a)  In order to advance the policy outlined in section 2(b) of this order, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse.

(b)  In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.

Sec. 6.  General Provisions.  (a)  Nothing in this order shall be construed to impair or otherwise affect:

(i)    the authority granted by law to an executive department or agency, or the head thereof;

(ii)   the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals; or

(iii)  existing rights or obligations under international agreements.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

DONALD J. TRUMP

THE WHITE HOUSE,
April 18, 2017.

Written by

Elizabeth is the Marketing Manager at PROTECH. Comments and feedback can be directed to her at elizabethb@protechfl.com.